A dispute between a major California developer and its builder has reportedly affected $100-million-plus worth of construction projects in at least three cities, including a large apartment complex adjacent to the Target/Lowe’s retail area on El Centro’s north side, sources said.
The El Centro project is identified as Town Center Villa on the website of developer YK America, which states it is “Coming Summer 2016.” The once-bustling building site now sits quiet, devoid of workers or residents, its entry gate locked and dusty winds whipping between the partially completed looming two-story structures. A lone security guard stands watch.
Patterson Builders of Torrance had been doing the construction work.
“The information we are provided by the developer is they are going to continue. They just needed to take time off. (They are) getting a new contractor to finish the project,” said Norma Villicãna, El Centro Director of Community Development.
She referred further inquiries to the developer.
A YK official who declined to be identified said he could only provide limited details due to “pending litigation.”
The official added, “We’ll start the project again. I can only tell you at this time we are not looking for cash,” explaining he wished to dispel any rumors the project is not financially solvent.
According to its website, “YK America Group (U.S.) is a Southern California-based real estate investment and development company.”
The Town Center Villa construction stoppage occurred in mid-March and is due to a difficulty between YK and Patterson, the official said. He also said a new builder had not been chosen and that he would have more information by mid-June.
The official expressed concern the work stoppage is “hurting” several local subcontractors that had been working on the project, including landscaping, electrical and air conditioning companies.
Patterson President Dru Patterson said he had ordered his firm to stop work at Town Center Villa due to a dispute with YK America. He added he also ordered work stopped on several other developments Patterson had been doing for YK in Delano and Pomona with a total value of $100-million plus.
“I do YK’s work up and down the state. I will no longer do YK’s work,” Patterson said. “I have been working with YK for 10 years and done (more than) $100 million in projects. It just went bad.”
Patterson said his decision came because of numerous “change orders” to the construction plans by YK at multiple projects that caused delays and cost overruns.
“The truth is going to come out in the legal matter,” he said.
Patterson also expressed concern the Town Center Villa stoppage is harming local subcontractors.
The Patterson website states the firm is based in Torrance, was established in 1988 and has successfully completed a variety of commercial building projects. Patterson said his firm has a strong reputation for the quality of its work, which he described as “single-source,” meaning it handles all aspects of a building job, including design, planning and construction.
The YK official said the current construction is phase one of the Town Center Villa housing project and includes 84 units. Two more phases with 156 more apartments are planned but there is not yet a building schedule for them.
Town Center Villa was the only multi-family housing project under construction in El Centro, Villicana added.
YK America’s website states Town Center Villa it is part of Town Center II, a 70-acre retail, industrial and housing development.
Its size and number of components means it plays a major role in the continued growth on El Centro’s northern edge that is anchored along North Imperial Avenue and extends to the boundary with the City of Imperial.
A sizable portion of the Town Center II retail area has been developed over the past several years and includes such high-profile occupants as The University of Phoenix, H & R Block, the Social Security Administration and Subway.
Town Center Villa is the first housing construction at Town Center II and the YK official said it has been under construction for about a year.
At the site seven two-story apartment buildings and a one-story community center are partially built, some appearing near completion. Some buildings have stucco exteriors and windows, others do not. Roof tiles awaiting instillation are stacked on some rooves. The roadways and parking areas are not paved and the only landscaping is along Cruickshank Drive.
Villicana said YK America had stated it hoped to begin marketing the availability of apartments by April and complete construction by summer. The YK America website provides a phone number those interested in leasing apartments may call.
A YK project in Delano has also been affected by the dispute with Patterson, though not as starkly as in El Centro, said Maribel Reyna, Delano city manager and economic development director. The project is listed as Delano Marketplace on the YK website and Reyna said the 77-acre site on that city’s southwest side would include a mix of retail/commercial buildings and apartments. The project is in the planning stages and physical work has not begun, she added.
Reyna said that after the city officials noticed project planning had slowed YK was contacted.
“YK said it’s (the Patterson-YK split) not going to affect the project heavily. They were already working on it. The residents would not notice. For us it’s just vacant land,” Reyna said.
Pomona city officials could not be reached for comment on Friday, April 29. A recording stated city offices are closed on Fridays.
Government and business officials in Imperial County, as well as the Imperial Valley Economic Development Corp., have worked extensively with YK America to market Town Center II, including several trade missions to Taiwan and China arranged and sponsored by the firm. Delano officials also went on the trade missions.
YK’s website states the firm was originally founded in Taiwan in 1968, opened a U.S. office in Los Angeles in 1994 and maintains an international presence.
The Town Center II development has steadily attracted occupants in recent years.
Part of the attraction of Town Center II and Delano Marketplace is that they are part of the federal “EB-5 Immigrant Investor Program.” It allows those who invest specified amounts in qualifying “commercial enterprises” that create specified numbers of U.S. jobs to obtain visas to remain in the U.S, the program’s website states. YK has been successful in linking Chinese and Taiwanese nationals to qualified EB-5 projects.
Information on whether the Patterson-YK dispute would have an impact on the EB-5 status of the projects involved was not immediately available.
Meanwhile, the Town Center II development is literally expanding El Centro’s physical layout. As activity grows in an area of El Centro that was once farm fields, streets are being added, most recently an extension of Bradshaw Avenue that links Imperial Ave. and North Eighth Street. It is along Town Center Villa’s southern boundary and follows the extension of Cruickshank linking Eighth and Imperial, which is along Town Center Villa’s northern edge.
A new section of North 12th Street has been added north of Cruickshank and the map on YK America’s website indicates a new section of North 10th Street will connect Bradshaw and Cruickshank. That segment of 10th Street runs along the east edge of the current building site and is already paved but remains fenced off.