Wolfe Estates consultant files liens against property owners
The consultant representing Wolfe Development, Inc., a company which has so far failed to meet the road and utility improvement terms of an expired contract, has filed $50,000 liens against the four property owners who cannot build homes because those improvements were never completed.
“This is almost like a comedy,” Wolfe Estates Phase IV property owner Tino Serrano told town council Thursday. “And this reinforces the fact we’re damned fools for continuing to deal with them.”
Jean Solberg, who worked as the Town of Truckee Associate Planner from late 1993 until June 21, 1994, filed liens March 24 against the property owners as the president of Jean S. Solberg, Inc., the land use development consulting firm hired by Wolfe Development to represent its president, Ron Stover. She also filed three $50,000 liens against the Wolfe Estates Property Owners Association which represents the property owners within Wolfe Estates Phases I, II, and III.
“I have a client – Wolfe Development – I have to adhere to what they want me to do,” Solberg said as she discussed the reasons for filing the lien.
“I don’t know the legalities,” she said. “It’s not the first time I’ve placed a lien. The purpose of the lien is to basically say ‘Yoohoo, I’m out here, I’m owed money.'”
Solberg said she is owed money for improvements she made to Wolfe Estates Phase IV while operating under the terms of a 1994 contract she had with Wolfe Development.
She said she was responsible for supervising snow removal this winter and for supervising fire clearance on the Phase IV properties. She said trees were removed from where road installation is planned, utility alignments were examined for proposed alternate sewer lines and she held a survey device which helped determine the slope of terrain in Phase IV. For these reasons, Solberg said, Jean S. Solberg, Inc. placed seven $50,000 liens against the property owners who purchased their land from Wolfe Development and the association representing other property owners who purchased property from Wolfe Development.
– On Nov. 14, 1994, Wolfe Development Inc. and the Town of Truckee entered into a development agreement which allowed Wolfe Development, Inc. to record the subdivision map for Wolfe Estates Phase IV.
Under the terms of the agreement and according to the subdivision map act, Wolfe Development posted a $267,558 performance bond, guaranteeing completion of road access to the four subdivided properties, as well as sewer, water, electric, cable television and telephone service installations to those properties.
The development agreement required Wolfe Development to complete all improvements within one year.
– In November, 1995, at the request of Wolfe Development, the original development agreement and the term of the performance bond were extended through July 1996. The town did not require Wolfe Development to post an additional security.
– On July 11, 1996, Jean Solberg, representing Wolfe Development, Inc., requested a five year extension of the contract between the town and Wolfe Development. Based upon the recommendation of Town Engineer Jon Lander, the town granted a three-year extension of the development agreement and the term of the performance bond. The town did not require Wolfe Development to post an additional security to guarantee performance of the contracted work.
– On June 22, 1999, current Town Engineer Dan Wilkins sent a letter to Wolfe Development President Ron Stover as a reminder that the twice-extended development agreement would expire 23 days later.
“To date,” Wilkins wrote, “the Town is unaware of any effort by Wolfe Development Inc. to abide by the current (twice-extended) agreement. We respectfully request that the current development agreement between the Town of Truckee and Wolfe Development Inc. be honored.”
Wilkins’ letter informed Wolfe Development that the town would pursue accepting the $267,558 performance bond posted in 1994 if Wolfe Development did not respond within two weeks.
– On July 14, 1999, one day before contract expiration, Wolfe Development requested an explanation for the town’s interest in acceptance of the performance bond, Wilkins said.
Shortly thereafter, Wilkins met with two contractors from whom bids for completion of contracted work had been solicited. The two bids received were about $80,000 higher than the amount of the posted performance bond.
– On Jan. 19, 2000, an attorney representing the Developers Insurance Company wrote to Wilkins that because the bids received greatly exceeded the $267,558 bond amount, the company would like to issue a $267,558 check to the town in exchange for exoneration of its bonds issued in connection with the Phase IV subdivision.
– At the March 2, 2000 town council meeting, council was asked to consider adopting a resolution which would authorize acceptance of the Developers Insurance Company performance bond payment.
Hours before the meeting, Solberg contacted Wilkins and requested that the town not pass the resolution of bond acceptance. Solberg said Wolfe Development was prepared to complete the necessary improvements.
“To build we need $80,000 we don’t have and the homeowners don’t have,” Wilkins told council. “If Wolfe Development will do it, that would be best.”
Wilkins said that he had yet to speak with the president of Wolfe Development and he questioned the developer’s ability to perform the contracted improvements. Wilkins suggested however, with very strong provisions, that council not accept the bond payment and provide Wolfe Development the opportunity to perform.
Jean Solberg was informed by council that Wolfe Development President Ron Stover was required to meet with town staff and the affected property owners within two weeks. Wolfe Development must post an additional $80,000 security, council said, and additional permitting, contract agreement and ground-breaking milestones must be met by Wolfe Development to avoid the town’s acceptance of the bond.
– At the March 23, 2000 town council meeting, Wilkins told council that Ron Stover had not met with town staff, nor had his company posted an additional $80,000 security. However, Jean Solberg, Wilkins, the affected property owners, and representatives of two Wolfe Development subcontractors met to discuss options for proceeding with the contracted improvements.
The affected property owners convinced council to allow Wolfe Development to proceed upon the conditions that Wolfe contract with their subcontractor Cranmer Engineering to complete map revisions Solberg said were preferable. In the event Wolfe Development failed to perform necessary improvements, the work of Cranmer Engineering in Phase IV would revert to the town as town property.
Cranmer’s engineering plans were to be completed by May 5, 2000, council said.
– At the April 6 town council meeting, Solberg informed council that Wolfe Development no longer wished to work with Cranmer Engineering and the new, preferred engineering firm could not complete preliminary improvement plans by the May 4 deadline.
Property owner Tino Serrano said he did not appreciate the $50,000 mechanics lien placed against his property by Jean Solberg, stating that she had never performed work for him, but had operated under contract with Wolfe Development.
“I’m just trying to think of a worse word than reprehensible that I could say on television,” Town Councilmember Bob Drake said. “I hope this developer rots.”
Council chose consideration of performance bond acceptance for its April 13 agenda.
“How do we ensure that the message is here that we are going to pull this bond?” Councilmember Josh Susman said.
If Truckee Town Council accepts the $267,558 performance bond, the actual cost of completing the improvements will likely exceed the performance bond amount by about $80,000.
“I think the fundamental question the town needs to answer for itself is ‘What will our level of involvement be if we pull the performance bond?'” Wilkins said.
Reg King, president of King Engineering, Inc., the Grass Valley firm which originally engineered Phase IV, expressed concern about the town’s decisions in the Wolfe Estates Phase IV saga.
“The town was asked to extend the bond and did so without increasing the amount of the bond, which baffled me, frankly,” King said. “The property owners are guaranteed the design improvements.
“Your four lot owners were entitled to road and utility improvements two years ago,” he said. “It is the obligation of the town to see that it gets done. [The town is] not performing for the lot owners.”
The town attorney disagreed.
“The town required this performance bond in its regulatory role, rather than its public works role,” Crabb said.
Under the Wolfe Estates Phase IV conditions of approval, Crabb said, when constructed, the Phase IV roads will remain private roads and are not scheduled to fall under the jurisdiction of the town at any point in the future. The conditions of approval relieve the town of any obligation to pay for completion of the contracted improvements, Crabb said.
If council accepts the performance bond payment, Crabb said, an agreement between the property owners and the town will be necessary to determine financial responsibility for the improvement construction.
Crabb said he believes it is staff’s opinion that the best solution for everyone involved would be to have Wolfe Development build the improvements this year.
“We’re still going forward, full speed ahead,” Solberg said.
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