Chinese drywall a second battle for some in WCI’s Artesia community

By Laura Layden
NAPLES — Olga Palmer describes herself as the “double whammy.”
Palmer purchased a three-bedroom home in Artesia in East Naples in April 2008. Not only is her community unfinished, her home has Chinese drywall and she can’t live there.
“I’m in even worse shape,” she said. “There’s nothing I can do. It’s like a dead home.”
The developer, Bonita Springs-based WCI Communities Inc., has reorganized and resumed development in several communities. Artesia isn’t one of them.
The clubhouse, pool, tennis courts and biking trails haven’t been built at Artesia. There are fewer than 80 homes on 261 acres; WCI once planned 725.
“For everybody at Artesia, it’s like a ghost town,” Palmer said. “It is dark, dark.”
Palmer bought her home in Artesia before WCI filed Chapter 11 bankruptcy to reorganize. Four months later, she discovered tainted drywall after her air-conditioning broke down. The coils were frozen and corroded, a telltale sign of the toxic Chinese wallboard.
When exposed to moisture, the drywall can give off corrosive gases, causing electrical wiring and air conditioning to fail. Homeowners also complain of a “rotten-egg” smell and health problems.
Palmer hired an attorney in hopes of getting her home repaired.
“He has been able to get nowhere,” she said.
The WCI that emerged from Chapter 11 bankruptcy shed its liability for Chinese drywall claims. As part of its bankruptcy reorganization, WCI set up a trust fund to deal with those claims. The developer agreed to put up $900,000 in cash for the administration of the trust.
WCI’s homeoners have been left to “fend for themselves,” while other large builders, such as GL Homes and Lennar, have stepped up to make repairs, spending money out of their own pockets, said David Durkee, a Coral Gables attorney representing hundreds of homeowners with Chinese drywall in Florida, including Palmer.
“WCI instead hid behind the protection of bankruptcy,” he said.
Paul Erhardt, a vice president for community development and operations for WCI, said WCI “cannot actually go and repair the home. Their recovery will come from the trust.”
The trust has been working to reach settlements with WCI’s insurers, as well as the companies that manufactured and supplied the Chinese drywall.
Affected homeowners also got an ownership stake in the new WCI, which they may cash out, said Bruce Steckler, a member of the Chinese Drywall Trust Advisory Board.
“This new WCI that has been formed is a different entity than the old WCI. So you can’t sue the new company. The whole purpose of the bankruptcy is that they are able to absolve themselves from their liabilities,” he said.
He sees resolution on the horizon for WCI owners whose homes have the destructive drywall.
“In the litigation arena, two years is pretty much what it takes to get a case to trial or settled, or to have some significant effect,” he said.
He understands the frustration of owners like Palmer.
“I feel like there is a light at the end of the tunnel and it’s not a train,” he said. “We are closer to the end than we are to the beginning.”
He’s optimistic that homeowners will get enough money to fix their homes.
“I’m going to do the very best I can to get as much money as possible for these people to remediate,” he said.
He estimates there will be about 450 homes in all of WCI’s developments that could benefit from whatever the trust can recover.
Palmer, 52, said she would just be happy to get her home fixed.
After finding the tainted drywall, she moved back to Miami, where she’s a Realtor. She may stay there.
She hoped to start a new business in Naples with her friend, Maria Coords, who also bought a home in Artesia and ironically has Chinese drywall, too.
Their dream of going into business together has been dashed.
“I was just going to move and have a new life in Naples,” Palmer said. “I thought Naples was so sweet. I still think that.”
It’s frustrating that WCI has money to “make money” on projects, but there’s no money to clean up the Chinese drywall mess, she said.
Her friend, Maria Coords, 58, agrees. She moved out of her home in Artesia after discovering the Chinese drywall 2-1/2 years ago. It upsets her to see WCI building a new community, Manchester Square, in North Naples. She knows of at least two other homes in Artesia that have the corrosive drywall.
“They totally ignore us and yet they go and they start another community, less than 15 miles from Artesia,” she said. “I think that is just outrageous.”
As WCI looks to sell Artesia, Palmer questions whether the stigma of Chinese drywall might be a reason for putting the development on the market.
“It’s easier to go to another place and start fresh,” she said.