The homebuilder for an upscale Jack Nicklaus-designed golf course community near Sandpoint is dissolving its business after failing to sell any speculative or custom-built homes in the past year.
The resulting cash crunch left the company $13 million in debt to several regional banks.
Sullivan Homes Idaho owners Todd and Lori Sullivan announced the end of business operations to staff Wednesday. They plan to sell off company assets, including a few speculative homes and others in various stages of construction.
The Sullivans were unavailable for an interview Wednesday. Their attorney, Michael Paukert, said the sales will be orderly and done in consultation with lenders.
Banks with outstanding loans to Sullivan include AmericanWest Bank, Coastal Community Bank, Inland Northwest Bank, Mountain West Bank and River Bank. Each has been advised that Sullivan Homes Idaho lacks the cash to meet the loan terms.
The business’s failure is a troubling sign of the reach and longevity of the national housing crisis, Paukert said.
“There’s no question that they were caught in this cycle,” he said. “It’s really unfortunate for everyone and every business involved.”
Paukert will attempt to guide the business through an asset liquidation and corporate dissolution without turning to the courts for the appointment of a receiver or bankruptcy trustee.
Sullivan Homes Idaho built and sold expensive homes in several exclusive developments in the Sandpoint area. Prices range from about $800,000 to $1.9 million – a market many had considered immune to eroding housing prices and sales.
The company is the “preferred builder” of homes at the Idaho Club, the golf community under development on the Pack River delta between Sandpoint and Hope, Idaho. The course was designed by legendary golfer Nicklaus.
Sullivan Homes also has built homes at Bottle Bay and Willow Bay.
In 2005, the company teamed with ABC Television’s “Extreme Makeover: Home Edition” to rebuild a family home in Sandpoint.
Paukert said the Sullivans made personal guarantees to lenders that will cause them personal financial problems as well. He said the company will work with lenders, suppliers, vendors, subcontractors and other creditors to try to pay bills.
Earlier this summer, Sullivan Homes Inc., of Spokane, was forced into a court-supervised receivership. While the two companies share family ties and some professional services, their business operations are independent.
At the time, Todd Sullivan indicated that business in the high-end housing market was becoming difficult but that building was continuing.
Nancy Isserlis, the court-appointed receiver handling the Washington-based Sullivan Homes, said she is beginning to conduct a court-ordered routine investigation to ensure that any transactions between the two companies were appropriate.