Police Followed Up Arson Story 1 Month Before Project Fire
The developer of a downtown Santa Ana apartment project that was destroyed by fire earlier this week said Thursday that his company had stepped in and paid workers’ back wages after a framing subcontractor could not make his payroll.
Michael V. Reyes, president of Urban Ventures Inc., said his company paid about $80,000 in back wages and dismissed Santa Ana-based framer Builders Unlimited from the job May 6, after the subcontractor failed to pay its workers for three weeks.
Rumors that angry workers had threatened arson against the 200-unit apartment project prompted an investigation last month by Santa Ana police and fire officials. But the threats were never verified, police said Thursday.
Most of the workers, who left the job April 29, were then retained by the project’s general contractor, Mercantile Builders Inc., a subsidiary of Urban Ventures. Mercantile took over the rest of the framing work, Reyes said.
Failed to Advance Money
But James Ray Hill, president of Builders Unlimited, placed blame for his payroll troubles on Urban Ventures and the National Collateral Corp. for failing to advance him money on a timely basis. He said he filed a mechanic’s lien for $250,000 against Urban Ventures on Thursday and is considering legal action against National Collateral, which was to have loaned him money to be used during construction in return for a share of his profit on the project.
The last payment forwarded to Builders Unlimited, for about $137,000, was made payable to both the framing contractor and National Collateral, said Michael J. Bartlett, Hill’s attorney.
When National Collateral failed to deposit the money in Builders Unlimited’s account, the company’s payroll checks bounced, Bartlett said.
Representatives of National Collateral could not be reached for comment Thursday.
But Reyes disputed Hill’s account: “We paid him $898,000 up to the time we dismissed him, and the total contract was for $1,059,000. They were paid 85% of the contract but had not completed two-thirds of the work.”
The project’s concrete parking garage was scorched and three levels of wood framing were destroyed in a spectacular fire Tuesday evening that caused about $6 million in damage.
Nearby Structures Damaged
A house on 3rd Street and several businesses on 4th Street, along with a vacant Salvation Army building at the corner of 4th and French streets, were also damaged or destroyed.
Arson investigators said Thursday that they have not determined the cause of the blaze or whether it was intentionally set.
But Santa Ana Fire Department Division Chief James Montgomery said that about a month ago, his department investigated rumored arson threats made against the building by disgruntled construction workers.
Investigators were unable to substantiate the rumors, which had been circulating on the street, and never verified that a threat had actually been made, said Sgt. Chuck Hindman, a police officer attached to the Fire Department’s arson unit.
“Our investigation went nowhere,” he said. “There was apparently no substance to the rumors.”
2 Reports of Arson
Hindman said investigators “will not discount anything” at this point, including reports by a 19-year-old man and a 7-year-old girl who told The Times at the fire scene Tuesday evening that they saw the fire set by boys dropping a match or cigarette.
“We would like to talk to the kids,” he said. “We would like to talk to anybody that wants to talk to us.”
Reyes, Urban Ventures president, said that while “it’s very seductive to think that it was a disgruntled framer who set the fire,” the company has not received a single threat against the project.
“Sure it’s possible, but I just can’t speculate,” he said.
Reyes said the company has full insurance and is confident that it will recover its losses.
“This is obviously a setback from a timing standpoint. But we feel certain we will be able to rebuild the project to its original scope,” Reyes said.
