NEW UPDATE on Pulte-Centex landslide in Rivermist, a San Antonio development

UPDATE on Rivermist:
NEW material added 12 Mar 2010; More on buy backs, etc.

Rivermist homeowners to get buyback offer
By Jennifer Hiller
Centex Homes will offer to buy back 27 homes in a Northwest Side neighborhood and plans to spend $4 million to $5 million to rebuild a massive retaining wall that collapsed Jan. 24. ...

The buyback offers are being extended to owners of the homes in Rivermist and The Hills of Rivermist where certificates of occupancy were revoked after ground cracked and shifted. Those homeowners have been living in hotels, apartments and rental homes for more than six weeks with limited access to their property, and were facing the prospect of living away from home for an extended time.

Centex said it will take six months to build the new wall, and the city has said it would not allow people to live in the affected homes until all construction work was complete.

The buyback offers will cover the purchase price, closing costs, moving expenses, home improvements and incidental expenses. Centex will also pay for attorneys' fees, although it said it would not cover large contingency fees. It will offer to instead pay the costs of homeowners who have consulted with an attorney and want someone to review the buyback documents, said company spokeswoman Valerie Dolenga.

Centex said the first phase of slope stabilization work would start as soon as the city approves the company's plans.

The builder and developer of the Rivermist communities already has been talking with members of the city's Department of Planning and Development Services, but has a meeting to make a more formal presentation of its plans Friday.

Terracon, an engineering firm retained by Centex to investigate the wall collapse and soil movement, found that the “slope failure and damage to the retaining wall was the result of deep soil movement on the slope above and below the wall,” according to a Centex press release.

Rivermist homeowners are holding a press conference and protest at 5:15p.m. today. on Treewell Glen, the site of the collapse.

Dozens of homeowners have been asking Centex and parent company Pulte Homes to buy their homes back.

But the Centex buyback offer draws the line between the evacuated homeowners and others who want the company to buyback homes because of a loss of market value.

Letters sent to the company and copied to a variety of public officials - from President Barack Obama down to the District 8 City Council representative, Reed Williams - say the homes in The Hills of Rivermist have been “irrevocably stigmatized” by the slope failure, and that the incident represents a “financial setback to our family and our future.”

Dolenga said that Centex would address any construction problems with homes. “We stand behind the work that we do,” Dolenga said. “Some people haven't even reached out to us. Where do you draw that line? If you have issues with your home, call us.”

For displaced homeowners who want to return to their Rivermist homes, Centex will pay for housing until construction of the new wall is complete and a certificate of occupancy is reissued.

On Jan. 24, some residents at the top of a steep hillside in The Hills of Rivermist watched huge cracks open up in their backyards. A large retaining wall cracked and the quickly shifting soil damaged at least three homes at the top of the slope. Authorities evacuated 91 houses.

The city since later allowed most families to return, but declared 27 homes near the area unsafe to occupy for now.

In the wake of the collapse, San Antonio home builders have been scrambling to find engineering documents for retaining walls built in the past three years.

Home builders have until March 31 to apply for permits - retroactively - for retaining walls higher than 4 feet, and must show that the walls were both designed by an engineer and built correctly.

http://www.mysanantonio.com/business/87272832.html
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NEW: Added 12 Mar. 2010

Pulte To Buy Back Damaged Texas Homes: (at least some of them) http://online.wsj.com/article/BT-CO-20100311-712867.html?mod=WSJ_latesth...
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Rivermist buyback offers are being taken

Some homeowners already have accepted buyback offers made by Centex Homes to those who had to evacuate in the wake of a January retaining wall collapse.

Two homes have been sold back to the builder and developer of Rivermist and The Hills of Rivermist, while 11 more property owners either have verbally agreed to sell their homes to the company or are in the process of signing paperwork, Centex spokeswoman Valerie Dolenga said Thursday.

Centex this week announced it would offer to repurchase 27 homes where the city has suspended certificates of occupancy.

The ground shifted and a large retaining wall collapsed on a steep slope in the neighborhood Jan. 24. Since then, many of the homeowners have been living in hotels, apartments and rental homes with limited access to their property.

The buyback offers were made to 20 homeowners in the Hills of Rivermist who live along the top of the slope, as well as to the owners of the seven homes in the Rivermist neighborhood whose homes sit just below the spot where the wall split open and crumbled.

The offer covers the purchase price, closing costs, moving expenses, home improvements and incidental expenses, as well as some attorney fees.

In addition to the 13 people who have accepted or appear to be close to accepting an offer from the company, Centex is negotiating with the attorneys of another five homeowners. Eight people have told Centex they are undecided. And the company expects to meet with one homeowner today, Dolenga said.

The offers, some of which were made within days of the wall collapse, appear to follow a section of the Texas Property Code that deals with buybacks.

San Antonio attorney Gary Javore said the code doesn't specify precisely what should be included in buyback agreements. But it does say that if the contractor pays the purchase price, closing costs, cost of transferring title, reimbursements for improvements, moving costs and reasonable attorney and expert fees, the deal is a valid one.

“If you have an agreement to buy back the property and you have these as your terms, it's deemed reasonable as a matter of law,” Javore said.

James Gaines, research economist with the Real Estate Center at Texas A&M University, said the offer appears to be an attempt to reimburse the owners without providing a windfall in damages.

“Obviously they're saying, ‘OK, we screwed up, and we're going to make you whole.' What else can they do?” Gaines asked. “The 27 houses out of however many Centex builds is not that many, but if you're one of those 27, it's a really big deal.”

Large buybacks aren't the norm in residential real estate, but they do happen, especially in situations of chemical or environmental contamination or near Superfund sites, Gaines said.

The builder plans to rebuild the retaining wall — a process likely to take six months and cost $4 million to $5 million. The city will not allow the homes closest to the retaining wall to be occupied during construction.

“This is the right thing to do for these homeowners who will be unable to occupy their homes for a lengthy time period while we construct the new retaining wall and restore the slope,” Laurin Darnell, a vice president of Centex Homes, said in a prepared statement Wednesday.

Centex says its engineering firm has determined that the “slope failure and damage to the retaining wall was the result of deep soil movement on the slope above and below the wall.”
http://www.mysanantonio.com/news/local_news/87406842.html
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State representative says city should toughen up on developers

A small group of homeowners from the Hills of Rivermist showed up at San Antonio City Council chambers Thursday. Those families were accompanied by State Representative David Leibowitz.

“I have been concerned about the construction practices at Rivermist going back to 2007.”

State Representative David Leibowitz, D-District 117, is going to bat for dozens of homeowners living in limbo in the Northwest Side subdivision. He is asking city council take action to protect the families living near a cracked retaining wall.

“Stop the building and the issuing of permits until this matter is thoroughly investigated,” Leibowitz suggested to the Council.

The representative told council members the saga in the subdivision could have been avoided had the city fully investigated concerns he and others raised three years ago about the quality of fill material used to develop the area.

Leibowitz is also suggesting the city toughen up on the developers.

“Have more transparency in the city’s dealings and decision with the developer,” Leibowitz added.

Wednesday, Pulte-Centex formally announced it is buying back 27 homes in the Hills of Rivermist. But Leibowitz says more needs to be done for the families. For example, the representative says homeowners who are in the military and have to deploy don’t have time to wait for the developers repairs.

“As Military City USA, have we given any thought to the dramatic devaluation this ongoing saga has caused their homes to undergo? This incident, and the incidents which has followed will irreparably damage their ability to sell their homes.”

There was no direct response from the city council. The members were just listening to citizen’s concerns Thursday night.

Representative Leibowitz did tell Council members he’d like some feedback soon.

http://www.woai.com/news/local/story/State-representative-says-city-shou...
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Pulte Home Slides on San Antonio Home Repurchase Offer

3/11/2010-Shares of Pulte Homes (NYSE: PHM) are trading 1.7% lower to $11.16 Thursday after Dow Jones reported the the homebuilder offered to purchase 27 San Antonio homes damaged by a January retaining-wall collapse.

In addition, Pulte will also construct a new wall, a six-month project with an estimated cost of between $4 million and $5 million.

Pulte's Centex division, which built the homes, offered to buy back the units that were deemed uninhabitable.

Pulte, the nation's largest builder, said it will also cover moving costs, costs of home improvements and reasonable legal fees.

The builder will provide or reimburse for alternative housing until the new wall is finished and certified for owners who want to keep their homes.

Pulte did not provide an estimated cost for the whole endeavor.

http://www.benzinga.com/press-releases/c169388/pulte-home-slides-on-san-...