VALDOSTA — Work on the privatized Magnolia Grove housing project for Moody Air Force Base families has come to a screeching halt amidst allegations of non-payment of subcontractors.

Less than a month after the much-touted grand opening of the first two completed houses, the keys handed to the two lucky families have been taken away, the housing area is locked down and no one is being allowed access while the issue is resolved.

Dozens of area contractors have been affected by the non-payment for their work by American Eagle Communities, LLC, of Meriden, Conn. American Eagle was awarded the contract for the project more than three years ago, and according to the original timeline, more than 150 houses were supposed to be standing on the property located adjacent to Moody AFB off Bemiss Highway. Construction delays have been commonplace throughout the project, but on Jan. 31, 2007, a grand opening and ribbon cutting for the first two completed homes renewed hope that the community was finally on its way. Less than a month later, subcontractors began filing liens and lawsuits in an effort to receive payment for their services, and work is now at a complete standstill.

Preferred Builders and Renovators, LLC., the Home Builders Association of South Georgia and CMS/ Dumpster Co. are among those affected. Subcontractors are alleging that SRC Construction, a division of Carabetta Corporate Office located in Meriden, Conn., withheld funding, defrauded, and has now successfully damaged as many as 40 industry contractors and vendors in the area. Sources reveal that eight of these 40 industry contractors are now bankrupt, several have filed liens, and two have pending fraud charges.

CMS/Dumpster Co. estimates “a big loss” in revenue; the Preferred Builders and Renovators (PBR) have estimated their debt at $100,000.

“Our entire community is feeling this burden, from the building supply centers to the smallest subcontractor, and Moody AFB itself are all being punished and local businesses are in fear of folding,” said Melissa Bayman of PBR. “Many subcontractors face the possibility of losing their personal homes, credit, and jobs as well as their standing in the community as many have tied every aspect of their livelihood to overcoming the setbacks they now face.”

The Home Builders Association of South Georgia is also being affected by the non-payment of subcontractors, and Scott Orenstein, president of HBA of South Georgia, is concerned for the membership.

“As an association, we are extremely concerned with how this situation has affected many of our members. We want not only the construction community, but all of the citizens of Valdosta and Lowndes County to understand that subcontractors are not being paid for work that has been completed on this project; work that is undisputedly complete and satisfactory,” said Orenstein.

“Our office received word that this project has come to a complete halt due to non-payment from the general contractor, who is based out of town. I have personally heard several accounts of local businesses that have been forced to file bankruptcy and others who have begun to sell personal property in an effort to pay their suppliers. This situation is extremely serious and we are praying for an immediate resolution,” Orenstein said.

Southeastern Stud (SES) has worked on additional projects in association with American Eagle prior to the Moody AFB Family Housing project. Kennon Whaley of SES has pulled out of the project due to non-payment and breech of contract.

“AEDBS (American Eagle) owes SES over $2.5 million. We’ve done the work at the Magnolia Grove site and they’ve accepted it. Moody AFB was very pleased with the quality and outcome of our work,” said Whaley.

“After the first framers were fired, we also came in and corrected the existing frames and began framing six houses per week starting in October. Since the first part of November, we have not received a payment,” Whaley said.

Naomi Hendricks spoke on behalf of Moody Family Housing in association with the American Eagle Communities entity. “We have a delay with our senior leadership. We are working on non-payment issues of sub-contractors with our corporate office,” said Hendricks.

After learning that Kathryn Thompson, the managing director of American Eagle Communities, was no longer involved with the project, Hendricks offered a statement as to the reason. “Kathryn Thompson has been redirected to working on another project. We are still doing our best to provide best quality for family housing. When our military is deployed, we want them to feel comfort in knowing that their families are being taken care of,” added Hendricks.

Subcontractors have been formally instructed that there is no access being allowed to the Moody Family Housing project site, and no work is being performed. Community subcontractors and all involved are seeking resolution for non-payment issues as well as methods to maintain their companies and prevent further losses.

The Moody AFB Family housing project was initiated on Oct. 13, 2005, with a groundbreaking ceremony at Magnolia Grove to begin development of 383 single family homes in connection with a 50-year agreement with American Eagle Communities.

“While the Moody housing project will serve this installation, the project is owned, managed and developed by American Eagle Communities, LLC. The Air Force and Moody Air Force Base are monitoring the situation and its affect on the current projected deadlines because the end goal is to provide quality housing to military families. While we will continue to encourage the developer to meet its financial obligations to its subcontractors, in general, the issue is a contractual and financial arrangement that must be resolved by the companies involved,” according to Capt. Gary E. Arasin, Jr. of Moody’s public affairs office.



• Editor Kay Harris contributed to this story.