“What you won’t find in a Mountain Gate home is the ordinary or the typical,” is what Empire Companies’ Web site advertising tells readers.
But today, another thing not found at the large master-planned community on 11th Street in Clarkdale is Empire Company employees or construction workers.
The company stopped construction of the development and notified the town of Clarkdale that its projects here, and in other developments in Arizona and California, have been frozen.
In a letter to Empire’s Los Angeles-based legal counsel dated Feb. 4, Clarkdale town attorney Robert Pecharich said he was notified by the company’s Arizona president that the company would be filing for Chapter 11 bankruptcy in early February.
However, as of Monday, Feb. 18, neither Pecharich’s firm or the town had been notified that Empire had actually filed for bankruptcy in Arizona or California.
Attempts at finding someone at Empire to confirm the company’s status failed.
Clarkdale Community Development Director Shelly Bailey said Empire’s Arizona President Matt Clark resigned.
“We’re not sure they have filed,” Bailey said.
“We’re working to find somebody to talk to,” Mayor Doug Von Gausing said.
Calls to local Empire phone numbers were answered by messages indicating they were open from 10 a.m. to 6 p.m. daily.
“This hasn’t happened in Clarkdale before but the town isn’t hurting because they pulled out,” Clarkdale Town Councilwoman Pat Williams said. “We have $2 million in assurances. In general, we can safeguard the project.
“I just feel bad for the homeowners. We can’t cover all the bases. We can’t finish the house or deal with warranty issues.”
“If they file for Chapter 11 [bankruptcy], it means they’ll get relief from creditors and start the project again or sell it and have someone else do it,” Von Gausing said.
Safety issues arising from the suspended building concerns town officials and prompted the letter from Pecharich.
Town officials inspected numerous safety hazards in the abandoned Mountain Gate construction and listed them in the letter to Empire counsel.
In his letter to Empire counsel, Pecharich wrote, “Although the town of Clarkdale has not yet completed a comprehensive financial evaluation of the infrastructure that remains incomplete in the subdivision, it is readily apparent that the $2,300,086 that remains on the performance bonds posted for this subdivision will not be sufficient to cover the costs of the completion.
“Notice of default and demand for payment of these bonds will be made to the sureties of each bond for the obligations of Empire Companies owed to the town of Clarkdale,” he wrote.
Williams said she and Von Gausing were opposed to the development but it was approved by the previous Town Council.
“It was a safe, old, village atmosphere, then Mountain Gate found us,” Williams recalled.
Williams said the Mountain Gate experience was the first the council had with a planned area development.
“Change is the hardest thing to get used to but we’ve learned a lot,” Williams said.
Now the town is waiting to learn if Empire is even in business and what it plans to do about the project it started.
The project is approximately one-third completed.
In the meantime, the town offered to lend facilities such as the Clarkdale Memorial Clubhouse to concerned homeowners for meetings.
In his letter, the town attorney told Empire counsel they can expect to hear from Mountain Gate residents regarding the completion of the company’s obligation to them and the town supports the residents in that regard.
Todd Etshman can be reached at 634-8551 or e-mail to
tetshman@larsonnewspapers.com
