His company once cited, developer is now on board

Jeff German and Steve Kanigher

Friday, Nov. 2, 2007 | 7:38 a.m.

Reno developer Michael Efstratis has firsthand experience dealing with the kind of construction industry disciplinary proceedings he will oversee as the newest member of the Nevada Contractors Board.

That's because his former company, Double Diamond Ranch LLC, was once disciplined by the board.

Without issuing a news release , which customarily accompanies such appointments, Gov. Jim Gibbons late last month replaced Las Vegas developer David Clark on the board with Efstratis, who is well known within construction circles in Reno.

State records show that Double Diamond's past troubles also are well -known to the Contractors Board.

In May 2002, records show, the board placed a letter of reprimand in Double Diamond's public file for hiring an unlicensed contractor.

Months earlier, the company, which spearheaded the development of the massive Double Diamond Ranch residential community in Reno, filed for Chapter 11 debt reorganization in Bankruptcy Court after accumulating nearly $8 million in liabilities, records show.

Efstratis, whose name appeared for the first time Thursday on the letterhead of the Contractors Board, did not return phone calls.

Gibbons spokeswoman Melissa Subbotin said Double Diamond's reprimand and its past financial problems did not dissuade the governor from finding Efstratis qualified for the board.

"We have great confidence that he will serve the board well," Subbotin said. "He has proven leadership and he is well respected in the community."

Double Diamond's October 2001 bankruptcy court filing, according to newspaper reports, occurred a day before the company's largest creditor, Lowe Enterprises of San Diego, was planning to foreclose on a portion of the master-planned project, which was used as collateral for a $5.6 million loan.

A bankruptcy judge approved Double Diamond's reorganization plan, which included a schedule to repay its debts to Lowe Enterprises and other creditors, and the case was closed in 2005. The case was reopened to deal with administrative issues that lingered until early this year.

At the time of the May 2002 disciplinary proceedings before the Contractors Board, Efstratis was listed in state records as Double Diamond's "qualified employee," the executive with experience in the contracting business. The company's lead executive was Kreg Rowe of Reno.

After a hearing, the board concluded that Double Diamond had violated state law by hiring unlicensed marble subcontractor Tom Aleo for the Double Diamond Ranch project.

According to minutes of the meeting, Efstratis testified that Aleo had had a falling out with a business partner but told Double Diamond that he was in the process of obtaining a contractor's license.

A board investigator, however, testified that the state agency had issued three citations to Aleo for working without a contractor's license.

The board ended up voting to place a "permanent letter of reprimand" in Double Diamond's file, taking it to task for dealing with Aleo.

Weeks later, records show, the company voluntarily surrendered its contractor's license, and Rowe and Efstratis received a licence from the board for a new Reno company they formed, Tanamera Commercial Development LLC.

Tanamera Commercial is the general contractor for Tanamera Development LLC, which specializes in developing high-end commercial and residential projects in Northern Nevada. Efstratis is a partner in and construction manager for Tanamera Development.

When Tanamera Commercial obtained its license, one of the company's principals was Tom Hantges, then owner of Las Vegas-based lender USA Capital, which managed $962 million in assets for roughly 6,000 investors nationwide. USA Commercial Mortgage Co., the lending subsidiary of USA Capital, also was listed as a financial backer of Tanamera Commercial.

USA Capital and its subsidiary attracted their own unflattering publicity in April 2006 when the two companies also filed for Chapter 11 protection. Most of their operations were taken over by Compass Partners, a private equity firm in New York.