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Lenders pull plug on Prescott Valley developer

By Patrick Schutte, Certified Foreclosure Specialist, on October 27th, 2008
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By Jason Soifer

The Daily Courier
Monday, October 27, 2008

PRESCOTT VALLEY – A prominent Tempe-based homebuilder has closed his doors.  Dave Brown, chief executive officer of Brown Family Communities, said Monday afternoon that his lenders called on his outstanding loans, forcing him to close his doors after more than three decades building homes in Arizona.

pronghorn

Brown built homes throughout southern Arizona including Laveen, Mesa, Surprise, Chandler, Glendale, Goodyear, Queen Creek and Phoenix. This pulls the plug on everything, according to Brown.

“We thought we had agreements with them (lenders), we signed them and they reneged,” he said. “Our family’s devastated.” The builder’s website is offline and people calling
Brown’s offices get a short explanation citing economic conditions as the reason behind the closing.

Brown said he began negotiating with lenders earlier this year.  “They sucked me dry and delayed me,” he said. “Six to nine months and I was so damn stupid, I didn’t recognize it. They got me, boy.”

Residents in the Pronghorn Ranch subdivision are just as surprised as Brown is. Someone posted a small sign in the Pronghorn Ranch sales office window Friday. The brief message informs people that the builder is no longer able to receive financing for the community.

The note left residents in the dark wondering what was going on with the builder.
Subdivision resident Barry Lane said he was unaware of the notice.
“Evidently, they did not let anybody else know about it,” he said.

Brown said he already cut about 50 employees and believes he has about 20 employees left. And Brown expects to slash that number to six by the end of next week.  “I’ve been here 33 years and I’ve built over 18,000 homes,” he said. “I have never been screwed so badly.”

For now, Brown is smarting over the recent turn of events after negotiating with a couple of lenders for months. “It’s been an ongoing thing,” he said. “They took all of our proceeds from all of our (home) closings for the last six to nine months and I’ve been pouring money into building the houses with the company money and
my money, and they all reneged on the deals and I ran out of money,” he said.

The subdivision has room for 1,440 units, according to Prescott Valley’s Community Development Department.  Brown said he sold about 650 homes in his Reunion, Reserve and Renaissance portions of the development.   About 790 single and multi-family home sites remain, according to Brown, who added that about 125 of those have utilities and services and are ready for construction.

In a bit of an ironic twist, Brown says sales were going well because he sold 17 homes in the past several weeks. “We’ve been selling very well, but the banks wouldn’t give us a nickel to build the houses,” he said. “The damn lenders won’t back us.” At this point, Brown said he decided simply to close the doors.   “I have refunded all the money to all the buyers that had deposits down, and I paid all the benefits and everything to our employees that I’m laying off,” he said. “I’m just galloping out into the horizon here. I’m gone.”

Reporter Ken Hedler assisted with this article

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