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Boom in home elevations is resulting in some shoddy work, experienced firms say

Published: Sunday, July 24, 2011, 7:00 AM

The state’s Hazard Mitigation Grant Program languished for three long years, failing to help many Hurricane Katrina victims elevate and storm-proof their rebuilt homes.

Foundation Elevation
Enlarge SUSAN POAG / THE TIMES-PICAYUNE Bret Crochet, co-owner of Clesi Foundations, a shoring company that started out doing industrial foundations and has branched out into residential work, at a house in Harvey that they are currently raising. Clesi will start a residential job by laying a three foot by 16 inch deep continuous footing below the ground around the entire house and then uses 16 inch blocks that are mortered together to support the structure. Crochet said much of the shoddy work currently being done by inexperienced contractors involves the use of stacking eight inch blocks without morter to support the structure. Home elevations booming gallery (6 photos)
Then this year, Gov. Bobby Jindal’s administration finally found the key to unlock some of the federally financed program’s riches. It has paid more than $289 million to cover more than 6,300 mitigation jobs. That’s a far cry from the nearly 50,000 applicants cleared by FEMA, but a significant boost for an effort that a year ago had paid out only about $10 million to fewer than 500 homeowners and was cited for poor management in 2010 by a recent legislative auditor’s report.

Much of the program’s recent relative success stems from the state working more closely with elevation companies. Having already started the ball rolling by offering advances, it began issuing two-party grant checks to home elevation companies and homeowners, to make sure homeowners didn’t sit on the money. It increased advance payments from 50 percent to 80 percent to give the contractors more cash upfront. It let the companies accept promissory notes from homeowners as a stand-in for Road Home grant money long since spent.

The result has been a home elevation boom that’s making a lot of aggressive, entrepreneurial contractors rich. But not without opening a whole new Pandora’s box of problems for the state and for homeowners.

Owing in great part to the state’s 2008 announcement that it would use most of the program’s $750 million for elevation work, a local industry that numbered around 20 elevation and shoring companies before Katrina suddenly has more than 665 companies accepting Hazard Mitigation payments for this specialized work, even though fewer than 30 of them even own the expensive jacking equipment necessary to do the job.

State spokeswoman Christina Stephens declined to provide any data about how many jobs specific companies are working and how much federal money they’ve been paid, saying that the state’s relationship is with the homeowners, not the contractors.

But the state’s Disaster Recovery Unit’s relationship with contractors is undeniable. The agency just started an online contractor registry, and a policy change this month requires homeowners who want to change elevation companies to get their current contractor’s signature on a state form.

Inexperience is cited

Meanwhile, with no limits on which contractors can participate, more experienced companies say shoddy elevation work is becoming a major concern.

Bret Crochet, an owner of Clesi Foundations, a 31-year-old company, calls the work by newer contractors “Katrina foundations.” Instead of using thick piers and deep concrete foundations like most houses raised before the storm, these jobs are “designed to be built as fast and cheap as possible and presented to homeowners and inspectors as meeting industry standards,” Crochet said.

The state should have protected homeowners better, said David Torkanowsky of JCON, whose principal subcontractor, Davie Shoring, has been operating for 20 years and, along with Orleans Shoring, has the most contracts for Hazard Mitigation elevation jobs.

“The program should have assessed contractor capabilities in advance,” Torkanowsky said. “That was a huge, huge mistake in this program.”

Although there has been no official finding of fault in the case, one house being raised in eastern New Orleans as a part of the program collapsed on April 18 and killed one of the workers. The contract for the work was with Fusion Shoring, a division of a company called Fusion Construction that has been registered with the state for three years. Fusion had hired a more experienced contractor, Coastal Shoring, to do at least some of the job.

house-collapse.jpgView full sizeA house being raised in eastern New Orleans as a part of the Hazard Mitigation Grant Program collapsed on April 18, killing one of the workers.

A foreman on the job, David Burnett, told WDSU-TV in April that no one would listen when he warned about structural problems with the job hours before the house shifted and fell, killing Alexander Cardona Figueroa, 33, of Metairie. Fusion Construction owner Judith Weatherly told the station at the time that Fusion and its subcontractor “followed proper and established safety procedures at all times in the shoring of this home.”

Weatherly told The Times-Picayune that she has been involved in construction for more than 30 years and employs the “highest standards of quality control” at Fusion.

“No agency has advised us of any fault found with our engineering plan or in our safety procedures for this contract,” she said.

Michael Tusa, a lawyer for Coastal Shoring, declined comment.

One thing that worries Crochet is that many of the companies that formed recently to take advantage of all the federal aid are subsidiaries or divisions of other companies and can simply dissolve in a year or two. That way, if the foundations are poorly constructed, the homeowners won’t have any recourse if the effects of settling earth and cracking piers and walls come to light. Most of the firms are offering lifetime or 30-year warranties on their work, but the guarantees aren’t good if the entity offering it soon disbands, Crochet said.

A rash of unscrupulous behavior

And the quality of the work aside, state officials have also had to crack down on a rash of unscrupulous behavior by contractors.

Gregg Huskey, the owner of Celebrity Contractors, was arrested earlier this month in Jefferson Parish for taking payment for an elevation job and never doing the work, and the Sheriff’s Office has been inundated with complaints by other homeowners who hired Celebrity under the Hazard Mitigation program.

Huskey and a consultant, Ricky Davis, who cannot be a contractor because he’s a convicted felon, are out on bond. Huskey said delays are part of the program and state officials are targeting his company because he’s black, while letting larger, white-owned companies sit on advance payments just as long.

New rules for grant advances

The state’s Disaster Recovery Unit also just unveiled a new policy telling contractors that they won’t get any more advance payments if they fail to finish more than half of their elevation projects within six months of the homeowner receiving an advance. Stephens said the state is about to freeze advances for 139 of the 809 contractors handling elevation and other Hazard Mitigation projects because they have completed fewer than 25 percent of their jobs on time. Another 74 firms will be getting letters warning them that they are not meeting the deadlines.

It also took until this month for the state to change the grant covenants to state that the financed work must be in compliance with international building code standards.

Another change to the covenants seeks to address what Stephens said are potentially fraudulent acts by contractors: Improperly promising to forgive a homeowner’s obligation to use their previous Road Home elevation funds to pay for the work; offering to tack on freebies like cash back, decks, porches, flat-screen televisions and vacations; and seeking business via ads that make erroneous or misleading statements about the Hazard Mitigation program.

The first issue stems from Road Home elevation grants of up to $30,000 that all of the Hazard Mitigation applicants received years ago. That money wasn’t nearly enough to lift a typical slab home. The Hazard Mitigation program was designed to fix all that. It’s only for Road Home grant recipients, intended specifically as a supplement. But because it took so long for the current program to pay, few homeowners saved their original $30,000 for what it was intended. A 2010 audit by the inspector general of the U.S. Department of Housing and Urban Development, the source of the Road Home funds, found that less than 20 percent of a sample of Road Home elevation grantees had even begun to elevate.

By rule, the Hazard Mitigation program will cover only the elevation costs that exceed Road Home grant funds. To help address that issue, the state allowed contractors to bill clients for that $30,000 portion separately using promissory notes. That has helped lower-income homeowners ink deals they wouldn’t otherwise have been able to afford. But it also raises big questions about whether the promissory notes are enforceable and if they’ll ever be paid.

Promissory notes and promises

Stephens said the state is concerned about reports that some contractors are roping in clients with upfront offers to forgive the promissory notes, essentially giving homeowners a free pass to misuse federal funds. The state has warned contractors not to give any more “inducements” or freebies that could jeopardize the homeowner’s grant. Cajun Elevation and Shoring, a Metairie firm that registered with the state just two months ago , has had to stop offering free cruises. It was running a television ad showing a cruise ship and three cruise tickets marked “free” as the voiceover blared, “Sign up now and Cajun Elevation and Shoring can send you on a crusie while we elevate your home for free. Aiyeeee!”

Cajun Elevation owner Praveen Kailas said he’d removed the ad from the company’s Internet page. But he said he never meant the perk to run afoul of grant rules.

“We had offered the cruise to homeowners utilizing the relocation expenses allowed under the HMGP,” he said. “Homeowners must vacate their homes for a few days as per standard safety procedures during the home elevation process. By working with the cruise company, we thought we could offer the cruise as a comparable expense to a hotel stay. However, we stopped the cruise relocation as to eliminate any confusion regarding this issue. We have not sent any homeowners on a cruise and cannot plan to do so.”

Stephens said the state has referred three other advertisements to the attorney general for investigation. One was a glossy Internet video by Elevation Masters, a New Orleans firm that has has been registered as a corporation with the state for six months. It opens with this tantalizing voiceover: “If you spent the 30, don’t worry ... call the Masters.” The ad appears on the company’s Web and Facebook pages. Messages left with Elevation Masters and owner Terrence Mitchell were not returned.

Another ad referred to the attorney general appeared twice in The Times-Picayune this month. It says that people who have been denied for elevation grants or who have never applied are “still eligible to fill out this form” to something called the “HMGP Home Elevation Call Center.” Stephens said those people are not actually eligible for grants and said the name of the call center suggests falsely that it’s part of the state program. Messages left at the call center last week were not returned. The newspaper’s advertising department would not provide further information about who purchased the ad.

•••••••

Allen Powell contributed to this report.

David Hammer can be reached at dhammer@timespicayune.com or 504.826.3322.



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rhettswife July 24, 2011 at 7:26AM

You would have thought that the state and federal governments would have learned after the numerous shoddy and unlicensed contractors bilked so many out of their ROAD HOME monies with shoddy construction or simply walking off with the bucks. Time for inspections on a regular basis even on the site of reputable and experienced contractors. A LITTLE COMMON SENSE, DEARS.

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GrisGrisMama July 24, 2011 at 7:37AM

My complaint about these shoring companies, from a certain one that has been around since the 1840s, on up to start-ups within the last few years, is this: They do not provide port-a-potties for their workers (who it appears are predominately from out-of-the-country). In 2007, when I returned home from exile in a FEMA trailer park in Baton Rouge, I discovered that a shoring company's workers had been using my fenced-in back yard as their "necessary room". It took a strongly-worded letter to the supervisor on the job to force the company to bring in a port-a-potty for the workers. And that's what I have to say about these companies -- although not all are guilty of this breach of manners, of course.

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UIdjit July 24, 2011 at 8:22AM

Unfortunately, everyone wants to save a buck, but, in the long run "cheap can be expensive" - you get what you pay for, right?!

Utilizing the company that offers the lowest price often means that you are getting a crew that may not understand what you're saying or have the skills to do the correct job. sure, you got to keep a chunk of that RH money because you got a great deal, but . . . . don't go out and buy that new SUV yet . . . . you'll probably have to have the job redone.


~ c.n.c. ~

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DarkQuark July 24, 2011 at 7:40AM

Throw down a pile of money and the vultures will circle. Usually those vultures are in suits and have been elected to an office or belong to some "organization" that no one knows of or needs and only shows up when it smells cash.

I disagree with spending money federally on this. The rest of the country should not have to pay for people to live in places they maybe should not.

I think the money would have been better served to have them move someplace else if the government was that intent on butting in.

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johnbgood July 24, 2011 at 8:10AM

Too bad these types of jobs are not regulated more. First of all, like any construction job, it should require a permit and seal of an engineer registered in the State of Louisiana. With all due respect to the firms that are doing this tyoe of work, there are several considerations that appear to be overlooked.

First of all, the so-called pilings that are being constructed. When a new home is built with piles the pile has a load capacity usually 2 times the design load. Are these piles developing that same capacity?

Second, the updated building code requires a continuous load path fron the top of the roof down to the footing. That means the top of these piers need to provide a connection between the pier and the strucutre and at the bottom of the pier between the pier and the footing. Many grade beams in slab on grade foundations have uneven bottoms making it difficult to provide a solid connection with a pier beneath it.

Third, unreinforced masonry piers will reach a height limit based on the bending capacity of the pier caused by wind loads that will place lateral loads on the structure. The only thing in these unreinforced peirs to resist that loading will be the tensile strength of the mortar. In my opinion they should use fully grouted steel reinforced piers.

Fourth, the slabs are being elevated. A condition which they were not designed for. Many homes have only wire mesh in the slabs for reinforcing and oftern times the mesh is not properly placed in the slab (sometimes it is underneath the slab and not even embedded in the concrete). If the slab is not properly designed to span between supports, the newly elevated slab can fail. If the reinforcing is not properly designed and placed, the only thing resisiting the forces of gravity is the tensile strength of the concrete.

Finally, the homes that were exposed to the corrosive flood waters of Hurricane Katrina have caused damage to parts of the strucutres that are hidden. If the proper testing is not performed to identify these weaknesses a failure will likely occur in the future. Specifically, the nails and anchor bolts that hold the timber framing together have been exposed to corrosive elements they were not designed for. This decay in the steel components of the structure reduces the structural capacity of the building to resist lateral loads. Also included in this are the brick ties that are located behing brick veneer walls. Once they decay, the brick veneer is almost like a pile of stacked bricks. If you don't believe me about the deacy to the steel portions of the structure, look at the galvanized steel fences and posts in your neighborhood that were exposed to the floodwaters and how much they have deteriorated. Keeping in mind the protective coating on the gates and fences are better than the protective coating on the nails used to frame your house.

Too bad code enforcement officials on the local, state and federal levels are not providing more oversight and guidance to protect public safety.

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BreauxD July 24, 2011 at 10:47AM

John says, "Too bad code enforcement officials on the local, state and federal levels are not providing more oversight and guidance to protect public safety."

Yea, some immigration oversight is desparately needed. The large majority of these guys use illegal labor, but yet they're reaping the rewards of federal dollars.

Home owners should write in a clause on their contract stating the contractor will NOT use illegal labor. Do you really want your tax dollars going to illegals and then wired out the country?

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UIdjit July 24, 2011 at 11:36AM

I went out of my way to hire folks that were local - that's why it took longer than expected to finish. I'd rather have the money stay here in the community myself.


~ c.n.c. ~

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BreauxD July 24, 2011 at 12:06PM

Thnanks for doing that. A lot of people don't know that in 2006 over $300 million dollars was wired OUT of Louisiana to countries in Central America. That's $300 mil that could have been re-circulating in our state.

The sad parts is during that same time period $30 Billion was wired OUT of the US to Central American countries. And That's $30 Billion that could have been re-circulating in our country.

That's alot of jobs and money paw paw!

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UIdjit July 24, 2011 at 12:20PM

I thought of it more as:
1. I could actually find the workers afterwards if there was an issue
2. I could communicate with the workers if the "super" wasn't on site
3. I was helping locals get back to work and/or back home

I must admit, the crew that came to do some fence repairs was from the mid west but at least they were Americans and the money stayed here.

~ c.n.c. ~

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swampwiz July 25, 2011 at 2:49PM

Very good assessment on the engineering, johnbgood, you must be a civil engineer (or something similar like mechanical.) I am a mechanical engineer who has worked in structural analysis (of lightweight astronautic vehicles made of aluminum, not concrete) and have often wondered about the load margin on the span of a slab.

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treasureseeker51 July 24, 2011 at 8:32AM

hey darkquark, where do you live? does it have any weather related problems like tornadoes, earthquakes,mudslides or something. your statement is not very informative only self pleasing. would you move because you could not get insurance? we have been living here for centuries without having to move until the corp of engineers decided to save other states from flooding and caused us to flood. we didn't have any sayso on this. be careful what you ask for, you could be next to recieve your allotment of mother natures wrath.

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cobra7 July 24, 2011 at 8:49AM

WELL PUT JOHNBGOOD. IF ANOTHER KATRINA WAS TO HIT ALOT OF EM WILL BE ALL OVER THE NEIGHBORHOOD.

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Moondusterr July 24, 2011 at 9:09AM

Ugghhh..This article is making my stomach turn. I had a contractor that made me give him my 30k, than took 7 months to complete the job, than charged road home 60K, than went back & asked for more. He ended up getting about 120k total..His work was beyond horrible, I am already having some issues, I am embarrassed of my house now, it looks worse than before..I see one person here complaining about workers not having a port-of-potty, Lady that was the least of my worries, the Mexican immigrants my contractor hired were LIVING in my house, one day the stove was left on and my front door wide open when it was pouring down ran out. My contractor refused to do anything extra, saying as long as my house passed code that's all that mattered. I did the right thing by doing my elevation early and look where it got me. Every time I was real upset about something he would offer me a Gift Certificate for Ruth Chris..I was like NO! I just want you to finish & do it right!!
Oh right after hhe got his 30k the next time he showed up in a brand new Luxary Truck! Meanwhile he complained he was out of money and he could not finish until he got more from road home, hence why it took 7 months. I also saw pics of him on the internet and it looked like he was on a Hawaii Vacation, that was right after he got his final payment..If anyone wants the name of the company I will be glad to share, message me.

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nolamike July 24, 2011 at 4:22PM

who was that contractor? I hope you reported him to the Better Business Bureau

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Moondusterr July 24, 2011 at 9:12AM

I really want my 30k back! I new I should not have handed it over when nobody else seems to be! I either want it back or make everyone else pay it!

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