Homeowners in Lake Las Vegas claim builder bailed on obligations

Art Nadler

Saturday, May 2, 1998 | 6:16 a.m.

Some 17 miles southeast of Las Vegas, on the outskirts of downtown Henderson, lies a virtual oasis in the desert.

Lake Las Vegas, a planned $4 billion resort community, is being built around a 320-acre artificial lake. Ten miles of shoreline has been designed into 360 lots for custom homes along the South Shore. Starting prices for home sites hover between $200,000 and $2 million.

Jack Nicklaus designed a championship 18-hole golf course interspersed among the homes, which cost from $500,000 to several million dollars. Across the lake -- on the North Shore -- luxury hotels are in the works that will include such heavyweight chains as Hyatt Hotels.

But for some homeowners in Lake Las Vegas, their oasis has turned into a mirage.

One builder, Clint Poteet, president of the Clint Poteet Development Group Inc., set out to build 14 custom homes along the South Shore in 1994.

Now many of the homeowners he contracted with are facing liens from subcontractors who say Poteet never paid them. Altogether, the liens total $350,000.

Many of the same homeowners, most of whom requested anonymity, said their homes were never finished and have major construction defects.

The state Contractors Board revoked Poteet's contracting license in March after investigating 21 complaints that, in part, uncovered poor workmanship, nonpayment to subcontractors, conspiracy with an unlicensed person to perform an unauthorized act, failure to complete any construction contract and failure to establish financial responsibility.

According to the minutes of the March 25 meeting of the Contractors Board, Poteet's attorney, Eric Dobberstein, acknowledged that each of the $500,000 homes were about 80 percent complete.

Some homeowners, who filed complaints with the Contractors Board two years ago, wonder why it took so long for action.

Other homeowners said they relied on the recommendations of a salesman at Lake Las Vegas for a reliable home builder. They say he suggested Poteet, and wonder why the Lake Las Vegas development company, Transcontinental Corp., didn't do something to protect them.

"For a large developer like this, we can't believe they ignored us," one angry homeowner said. "Being from out of town, we relied on the builder."

The homeowner, who has children, said Poteet gave him a not-to-exceed price on their home and a firm completion date. When that date arrived and the home wasn't finished, the homeowner claims Poteet said he'd need another 10 days.

"We were living in five different hotels," the homeowner said. "I had spent nearly 80 percent on the home, and there was much more than 20 percent left."

That's when the homeowner said Poteet asked for another $50,000 before he would continue working on the home.

Tom Knapp, director of investigations with the Contractors Board, said that was illegal. Poteet, he explained, never had homeowners sign change-orders for the cost overruns. These are amendments to the original contracts, where both the builder and homeowner authorize price increases or changes in building materials.

"He (Poteet) didn't keep accurate records on his projects," Knapp said. "When you have a builder basically intimidating the homeowner to give more money -- that is not appropriate."

Poteet says not having change-orders was his own poor judgment because he had "an open-door policy" with his clients.

"I didn't do the formalities of change-orders," Poteet said. "When the goods were in their house, then it was time to pay."

Poteet claims the homeowners, who wanted the more expensive revisions, refused to pay upon completion.

Jeffrey and Marie Schepps, who bought a $1.2 million Mediterranean-style mansion from Poteet, take exception with this view and say Poteet never came through on his promises.

The Schepps said Poteet built their patio deck poorly, with inadequate drain pipes that leak water into the garage when it rains. They also say he installed indoor surveillance cameras outside, reneged on a $40,000 founders membership to the golf course and didn't install a $25,000 chandelier in the foyer as promised.

"Clint has not finished a house up here," Jeffrey Schepps said. "He'll make you believe he's doing something, and then he'll do a half a job. We have 15 drains (on the deck) that drain into one 3-inch indoor (style) drain. He used a shower drain instead of an outdoor drain."

In testimony before the Contractors Board, Dobberstein said of his client:

"We have resolved every dispute... No matter what we do, we don't believe we can satisfy... the Schepps."

Homeowners said that after repeated requests for a meeting with Lake Las Vegas developers, they finally met with company officials and were informed that their disputes were with the builder, and the corporation could do nothing.

"Lake Las Vegas could have stopped this guy," one angry homeowner said. "But they wouldn't take the warning in the beginning. For a large developer like this, with a $4 billion project, we can't believe they ignored us."

In a July 18, 1997, letter to lot owners, Lake Las Vegas Executive Vice President William Hunt acknowledged that several homeowners had contacted the company to express dissatisfaction with Poteet's performance.

"It is our policy not to recommend any contractors to our lot owners...," Hunt wrote. "We urge all lot owners to take care in the selection of general contractors for their homes... If possible, you should also obtain recommendations from other sources..."

This statement that Lake Las Vegas never recommended Poteet or any other builders contradicts what homeowners said they were told at a meeting with company executives. At that meeting, homeowners said a company representative stated that it "would no longer recommend builders."

"People from out of town relied on the salesman," another homeowner said. "You'd think you'd be able to trust someone you just invested a million dollars with. People who are out here have run major companies, and they can't believe Lake Las Vegas is so cavalier and did not respond to the investors."

The salesman who several of the homeowners said referred them to Clint Poteet is a long-term employee, said Sherri O'Boyle, vice president of marketing at Lake Las Vegas.

"We have found no basis that would justify action against (the salesman)," she said. "We hope that the issues that have come between Mr. Poteet and the homeowners will be resolved with the Contractors Board. We didn't have any formal program that would assist them (the homeowners).

"The homesite owners in most planned communities like this have to conduct their own diligence to find out if there is a builder and architect for them."

Poteet claims he too is a victim. He blames construction delays, and the fact that subcontractors went unpaid, on two interior designers he brought into the company in April 1997 as shareholders and officers. Poteet said subsequent disputes with the two put a strain on his finances, which led to problems in completing the homes.

But two homeowners said they were experiencing construction delays before April 1997. They said Poteet threatened to walk away from their partially completed home sites, unless they gave him more money for cost overruns.

And the interior designers deny that they were at the root of Poteet's problems. They claim Poteet failed to live up to their agreements.

Poteet and the interior designers are involved in litigation over the liens facing homeowners. Poteet also has a personal lien against him as a contractor and as a homeowner in the Lake Las Vegas lawsuit.

Other subcontractors said they are still waiting to be paid by Poteet.

"I work for Lasting Impressions," Debbie Taft, a Las Vegas subcontractor, said in testimony before the Contractors Board. "And currently, we have been owed from Clint Poteet, since 1996, $63,387.75. We're a very small concrete company, and we have been promised upon promise upon promise to be paid.

"And... Clint Poteet contacted my boss and offered him a promissory note to drop our complaint. And we said no. This has really put us into financial hardship because we had to pay our material suppliers out of our pockets, and we are severely in debt now."

Gene Auffert, controller for Metro Electric, said Poteet still owes his company $8,000.

"Poteet said he was under the impression that he would give me more work," Auffert said in reference to the nonpayment. "I think he is a crook. A general contractor's license is a license to steal in this state. I have submitted complaints before, and the Contractors Board said we don't get involved with lawsuits.

"The Contractors Board needs more authority faster. They are so much in favor of the general contractor. The state needs to pass laws that if homeowners pay the generals (contractors), and if they don't pay the sub-contractors, then the board should shut the contractor down."

According to the Contractors Board, Poteet still owns four properties currently under construction at Lake Las Vegas. The permits have been transferred from Clint Poteet Development Group to Zeller Enterprises because Poteet legally can't finish them without a contractor's license.

Poteet is allowed to oversee the projects, but Mark Zeller is now the general contractor. The properties are at 40 Grand Miramar, 42 Grand Miramar, 6 Grand Cornishe and 17 Grand Cornishe.

Ronald Thompson, a former partner of Poteet's in the early 1990s from the San Francisco Bay Area, said he has been following the problems homeowners are going through at Lake Las Vegas. He said he isn't surprised that things turned sour for his old associate.

"I predicted this would happen," Thompson said. "I decided our relationship wasn't a good business relationship. He (Poteet) didn't manage money well. I certainly felt he was someone I didn't want to stay associated with. I lost some money, but nothing like what people lost over there."