AUSTIN, Texas — Some people have the eye to see a space and its potential.
“We re-floored the entire place, repainted, removed the malls,” Tony Gage said as he showed the KVUE Defenders the renovations to his family’s home.
It's no doubt that renovation skills led Tony Gage and his wife, Pam, to open their own construction business, Pinnacle Hill Country, LLC.
“Just kind of made it ours,” Tony Gage said.
In 2022, the Gages agreed to work on a renovation project to help house the homeless. The couple owns their own construction business, Pinnacle Hill Country, LLC. The City of Austin teamed up with Foundation Communities to turn a north Austin hotel into a 123-unit affordable housing complex.
Balcones Terrace is set to open in June 2023 as a place for unhoused people to call home and get services to build a better life. On-site services will include adult education classes, workforce development and counseling.
“The company [Foundation Communities] does a great job in Austin working with the homeless. And we were excited to be able to be a part of the project. It was kind of an honor,” Tony Gage said.
But the work didn’t go as planned.
The general contractor, a Louisiana-based company called MAPP, subcontracted their carpentry work to Pinnacle Hill Country. The Gages said on-site changes led to more costs. They needed to pay workers and cover materials.
“Change orders are very common in a project of this size,” Tony Gage said.
The couple said the business’s receipts didn’t get fully reimbursed. Tony Gage showed the Defenders invoices, some with partial payments made and others still pending. His attorney sent MAPP a demand letter showing nearly $54,000 owed for changes made to the Balcones Terrace project and $20,000 in retainage.
“We've made phone calls, emails. We've tried everything just to try to figure out how and when we're going to get paid,” Tony Gage said.
The Defenders dug through property records and reviewed Austin’s funding application and resolutions.
City documents show more than $22 million taxpayer dollars committed to renovating Balcones Terrace. More than $16 million of that was spent to buy the property. Most of the taxpayer money came from the 2018 voter-approved affordable housing bond.
“We are very focused at Balcones on finishing the construction, getting the quality of work done,” said Walter Moreau, executive director for Foundation Communities.
MAPP is no longer on the job.
“Unfortunately, we've had lots of construction challenges. We ended up deciding to end our contract with Mapp and bring in a new contractor, BEC, to help get the job done,” Moreau said.
Moreau wouldn’t give details about those construction challenges citing legal reasons.
“In our history at Foundation Communities, we've never had to let a general contractor go. It is a very big decision. And there are just a lot of issues that were going on. And we, for cause, decided to make a change in general contractors,” Moreau said.
Travis County records show that MAPP filed an affidavit for the mechanic’s lien. It reads in part, “ONE MILLION SIX HUNDRED AND TWELVE THOUSAND AND FIFTY SIX DOLLARS AND 35/100 ($1,612,056.35) remains unpaid, which includes retainage and is due…”
“The delay and the cost overruns it's going to be expensive, but we are committed at Foundation Communities to pick up those costs. I don't really foresee this being an impact to taxpayers. I think the thing that's really disappointing the most is that we wanted to be open. We are always having a wait list and there's just a huge need in Austin. So we are focused on picking up the construction pieces and getting the job done,” Moreau said.
Moreau wouldn’t comment on Tony Gage’s subcontracting work with MAPP, nor would the City of Austin.
“Foundation Communities oversees the general contractor, so they’ll be the primary contact for any specifics,” wrote a spokesperson for Austin’s housing department.
MAPP denied the Defenders' request for an interview and refused to answer our questions, but the vice president of MAPP Austin stated in an email, “We are currently in discussions with the Owner on the project and feel it is premature to comment.”
The Gages said they paid all of their workers, but they’re running out of time.
“It's tough on our personal lives because we try to make sure that the contractors that we work with are taken care of. And so we get the brunt of the financial issues personally,” Pam Gage said.
The couple said they will need to sell the home they remodeled if the money doesn’t get paid soon. They will rent and start over.
“This was going to be our final home. But the next one will be, maybe,” Tony Gage said.
The Gages said they may end up in arbitration and hope to be fully refunded.
“Smile and pray and just keep moving forward,” Tony Gage said.
The City of Austin expects the project to be finished and ready for renters in Spring 2024.