Mold in new condos prompts Aguirre to halt sale of bonds

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Mold in new condos prompts Aguirre to halt sale of bonds

http://www.signonsandiego.com/news/metro/20050625-9999-

7m25ntc.html

By W.

UNION-TRIBUNE STAFF WRITER

June 25, 2005

Home-builder Corky McMillin Construction is scrambling to remove

mold from 44 condominiums it built at the former Naval Training

Center during last winter's heavy rains.

The problem has prompted City Attorney Aguirre to halt a

bond sale of up to $16 million, some of which McMillin planned to

spend on the first phase of a 46-acre regional park at the property,

now called Liberty Station, west of Lindbergh Field. The City

Council approved the bond issue May 24.

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Repayment of the bonds is dependent on assessments paid by property

owners. The mold problem puts that payment at risk and could also be

a red flag for potential investors in the bonds, Aguirre said.

Occupants of 14 units have been moved out and are having their

lodging, meals and furniture storage costs paid by the company.

Residents in 18 other units are expected to be relocated beginning

today and will receive the same reimbursement package.

The remaining 12 units were unoccupied and repairs have already been

made, said Les Leininger, vice president of construction for

McMillin Homes. He said the problem was first detected about a month

ago during a final check of construction work on the unoccupied

units.

Leininger said he expects all units to be repaired and occupants

allowed to return in about seven weeks.

" In my 20 years of working at this company, I've never encountered a

problem like this, " Leininger said. " These buildings were built

during last winter's record-setting rains and that was followed by a

lot of humidity. It created the perfect scenario for mold. "

The damaged condominiums are among 349 condo units that McMillin

built as part of the 361-acre Naval Training Center redevelopment

project.

The training center closed in 1997 after nearly 75 years of

operating as a boot camp for sailors. The City Council selected

McMillin in 1999 to build out the plan.

Leininger said he is unsure what caused the problem, but he said it

has been most prevalent along common walls in the condominium

buildings. Some residents have theorized that the roofs had not been

built during the rains and damage occurred then, but Leininger said

he doubted that.

Aguirre said he was angry that the company did not notify the city

when the problem was discovered. He said he found out about it this

week in a Channel 10 news story.

" Obviously, this will retard the bond sale and affect the underlying

conditions of the bond offering, " Aguirre said. " I'm confident

McMillin didn't know about this at the time of the vote on the bonds

because it wouldn't have made the assurances it did to the mayor and

council that there were no construction defects. "

Kim Elliott, McMillin's vice president for land development, said

she did not know why the company did not alert the city of the mold.

She said the company agrees with Aguirre's decision to delay the

bond sale and that McMillin would work to have the problem quickly

corrected.

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W. : (619) 718-5070; ron.powell@...