Denver-Based Richmond American Also Cuts Staff : Firm Acquires Ponderosa Homes

Richmond American Homes, one of the nation’s fastest-growing home-building companies, on Tuesday purchased Irvine-based Ponderosa Homes of Southern California for an undisclosed amount of cash and notes and immediately laid off 27 of Ponderosa’s 100 employees.

The layoffs--affecting management and clerical employees--were ordered to eliminate staffing duplications that arose in the takeover, according to Robert G. Reese, president of Richmond American’s Southern California division.

The Ponderosa acquisition represents Richmond’s first move into the Los Angeles and Orange County housing markets. The Denver-based company quietly entered Southern California last October when it bought a few tracts of land under development in the Moreno Valley area of Riverside County.

Nationally, Richmond American projects $600 million in home sales this year. The company is a wholly owned subsidiary of MDC Holdings Inc., a Denver real estate development and mortgage company that reported net income of $24 million last year.

Ponderosa, a major Southern California developer that built and sold 777 homes in 1985 and reported annual revenue of $123 million, was sold by Irvine-based James S. Dailey Associates, which had purchased it just 13 months ago from Aetna Life & Casualty Co.

On Tuesday morning, Richmond quickly established a divisional office at Ponderosa’s Irvine headquarters from which it will manage all of Richmond American’s developments statewide.

In addition, MDC plans to “immediately” open a Newport Beach office for its Home American Mortgage Co. subsidiary, said Michael Feiner, an MDC spokesman. He said the Ponderosa acquisition should bring additional business to the mortgage company, which will provide financing to Orange County buyers of Richmond American-built homes.

In the Ponderosa buyout, Reese said, Richmond American obtained four residential tracts already under development--two in San Dimas, one in the Chino Hills community of San Bernardino County and one in Buena Park.

Reese said the company also entered into an agreement with Dailey to complete the construction and sale of homes in five other tracts in Glendale, Hacienda Heights, Ontario and San Clemente.

Together, he said, the nine tracts represent 851 homes either built or under construction.

Reese said the Ponderosa acquisition will almost triple Richmond America’s business in Southern California.

The 41-year-old Reese previously was chief operating officer with Gfeller Development in Tustin. He said he joined Richmond American in April, when he engineered the company’s purchase of several tracts from builders in Ontario, Corona, Fontana and Rancho California.

Publicly held MDC Holdings has embarked on a plan to expand by acquiring other builders, Feiner said. The most significant purchase, he said, came last year when MDC bought Denver-based Wood Bros. Homes, a home builder with about $200 million in annual sales.

Feiner said MDC decided to buy Ponderosa as part of its targeted expansion into Southern California.