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Evergreen creditors, investors, homeowners have complaints
The builder didn't pay for some construction work, the letter said. Many neighbors on Joseph Street, living in Evergreen-built homes, received similar letters.Harmon is among the hundreds of investors, subcontractors, suppliers and homeowners with a stake in what happens to Akron's Evergreen, a fast-growing company that promised to make home-ownership dreams come true.
Builder's porch crowded
Evergreen creditors, investors, homeowners have complaints
In a new Barberton neighborhood, Jamie Harmon and her husband worry about the letter telling them a mechanic's lien was being placed on the new home they bought in March from Evergreen Homes LLC.
The builder didn't pay for some construction work, the letter said. Many neighbors on Joseph Street, living in Evergreen-built homes, received similar letters.
Harmon is among the hundreds of investors, subcontractors, suppliers and homeowners with a stake in what happens to Akron's Evergreen, a fast-growing company that promised to make home-ownership dreams come true.
But that promise ran afoul of the state in June, when a sister company, Evergreen Investment Corp., was found to be selling securities in violation of state regulations.
Now, concrete subcontractor Mark Parr of Perry Township said he hopes pressure from the homeowners will persuade Evergreen Builders, a sister company to Evergreen Homes, to pay him about $17,000 he's owed. His company, MD Concrete Inc., hasn't been paid for driveway and other work on a dozen properties, including the Harmon home.
Around the corner from the Harmons, Denis and Diana Wilson also said they had problems getting Evergreen to complete their home. Their garage is unfinished, they say. They've had trouble getting their steeply sloped yard seeded properly, Diana Wilson said.
The couple put up a sign in protest in the summer.
Adding to their complaints, the Wilsons have been named in a foreclosure lawsuit filed against Evergreen Homes.
Their lot is among 10 parcels that Evergreen mortgaged to Carter Lumber Co. of Akron to secure a $1.4 million debt.
Carter contends that Evergreen failed to pay off its debt before transferring the Harter Avenue lot to the Wilsons.
In Kent, retired teacher Donald Toth has sued sister company Evergreen Investment Corp. to get back the $100,000 he invested to help provide second mortgages to home buyers like the Harmons and Wilsons.
He's among the investors who put $6.1 million into Evergreen certificates in the first five months of the year. They are no longer receiving monthly interest checks or principal payments. Evergreen said this month it could no longer pay investors.
Activity halted
Evergreen founder David Willan converted a home rehabilitation company called Summit Redevelopment into Evergreen Homes when he decided to build homes.
The company catered to urban residents who might not be able to buy homes otherwise.
Evergreen often loaned a down payment in the form of a five-year second mortgage.
The company raised money for its operations by selling high-interest investment certificates through Evergreen Investment.
The company built its first home in 2003; a year later, the company sold 130 homes for a total of $11.5 million, Willan told the Beacon Journal in early 2005, shortly after buying a prime parcel near downtown for a new Evergreen office.
Evergreen Homes' Web site says the company helped more than 200 families and individuals buy homes last year. It touts Evergreen's placement in 2005 on the Weatherhead 100, a listing of the fastest-growing companies in Ohio. The site also links to Smart Business Magazine's interview with Willan about his home building.
All that activity ground to a halt in June, when the Ohio Department of Commerce's Division of Securities alleged that Evergreen Investment salesman Daniel Mohler wasn't properly licensed to sell certificates.
The state also alleged that Evergreen Investment was insolvent yet continued to sell.
Willan agreed in late June to stop selling the securities.
He said the company wouldn't build more homes, but would sell its inventory to repay investors.
Willan, 36, last week declined to be interviewed. ``There is no new news to report,'' Willan said in an e-mail. ``We are conducting our business in a scaled-back manner -- as we have previously stated -- and we intend to continue doing so.
``We are working to sell some of the houses and properties we have in our inventory, which is challenging in current economic conditions. We are communicating directly with investors.''
He said he has met or talked with more than 100 people in the past couple of weeks, ``and I will maintain that schedule in the weeks ahead.''
Initially skeptical
Newlyweds Jamie and Bradley Harmon heard about Evergreen Homes from commercials on late-night TV.
They went to Evergreen's main office on West Market Street in Akron, met with a salesperson and initially were skeptical. Evergreen would loan money for a down payment and build a home despite their lack of a solid credit history.
They questioned how Evergreen's financing would work, recalled Jamie Harmon, 30. Yet she and Bradley, 34, had married in July 2005, and they wanted a home for their four children from previous marriages.
In late March, they took title to the home on Joseph Avenue.
After they moved in, they had problems getting Evergreen to make minor repairs, Jamie Harmon said.
``We had a hard time getting ahold of Evergreen,'' she said. They either couldn't reach anyone or calls weren't returned, she said.
This month, they got the letter saying that Parr was filing the mechanic's lien.
``Everything was in the contract that we had signed'' with Evergreen, Harmon said. ``The driveway was supposed to be completed and done by Evergreen.''
After just six months of homeownership, the frustrations with Evergreen have put a dent in her dreams, she said. ``It just kind of makes me mad,'' she said.
They haven't been able to get answers from Evergreen about the mechanic's lien, Jamie Harmon said, and in protest they have stopped paying on the second mortgage held by Evergreen.
Creditor in jeopardy
When Parr, co-owner of MD Concrete, first heard of Evergreen Builders, he took some jobs on a trial basis.
After his first jobs, he was promptly paid, Parr said, so he took on more work.
Evergreen's prompt payments stopped in the summer, although Parr eventually received a partial payment.
Now he's owed $16,513, and Evergreen's payment is about 60 days overdue.
Parr put liens on 12 homes and notified the owners.
``I only felt that was fair because a lot of people do not want their homes with liens on them,'' he said. ``I really don't want them to pay me. I want to be paid by Evergreen.''
The debt puts his company in jeopardy, Parr said.
``My suppliers have been paid, and this is payroll money, and so I'm not able to either meet my current obligations with payroll or my current payables,'' he said.
Court records in Stark and Summit counties show at least three dozen mechanic's liens have been filed to collect on Evergreen's debts.
Investor owed
Among the retirees, widows and widowers, parents and others who bought certificates from Evergreen Investment, perhaps no one is more sympathetic to owner Willan's troubles than Donald Toth.
The Kent retiree says he has owned rental property and knows real estate cannot readily be converted to cash.
``You can come up short easily and quickly,'' Toth said.
You can hope to sell a house within three months, but it may sit for more than a year. ``That puts you short for a long time.''
Toth has invested $100,000 in Evergreen certificates. They're not due to mature until January, but he has sued now because he has plans to use the money in another venture.
Toth and about a dozen other investors have filed suits alleging fraud, breach of fiduciary duty and negligence.
Although Evergreen has stopped sending monthly interest checks, Toth said he still believes he will be repaid.
Willan ``has never led me to believe that he's not going to honor these certificates,'' Toth said. ``Only he knows everything. I only know what he tells me.''
http://www.ohio.com/mld/beaconjournal/15590553.htm
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