Levitt Bankruptcy Leaves Homeowners in the Cold Last fall, the storied developer Levitt and Sons halted construction on dozens of projects from South Carolina to Florida. Now many customers are stuck with devalued homes in half-built neighborhoods.
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Levitt Bankruptcy Leaves Homeowners in the Cold

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Levitt Bankruptcy Leaves Homeowners in the Cold

Levitt Bankruptcy Leaves Homeowners in the Cold

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Among the many casualties in the distressed homebuilding industry, one recent bankruptcy stands out: developer Levitt and Sons.

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Unidentified Man: This is no mere collection of homes but a carefully planned community complete with modern schools...

MONTAGNE: Back in the 1940s, Levitt helped pioneer the notion of suburbia when it built Levittown on 100 acres of farmland in Long Island. When it filed for Chapter 11 bankruptcy last November, Levitt did the reverse: it turned a part of suburbia into empty land.

Levitt stopped construction on dozens of projects from South Carolina to Florida and many of those who bought homes are now stuck. From Miami, NPR's Greg Allen reports.

GREG ALLEN: There's really only one way to tour one of Florida's many adult active communities. Those are developments marketed at people aged 55 and over, and that's by golf cart.

Mr. BILL QUATROCCI(ph): This was supposed to lead to the clubhouse. It leads to nowhere. They never completed this road to the other section.

ALLEN: Bill Quatrocci is at the wheel. His neighbor Bob Wilson is in the rumble seat of Quatrocci's golf cart as we drive through their park of a brand new community. It's called Tradition and it's a big development in Port St. Lucie along Florida's Atlantic coast.

While other builders are still selling houses at Tradition, Quatrocci and Wilson have the misfortune of living in a section developed by Levitt and Sons. It's a neighborhood where all construction stopped after Levitt declared bankruptcy, and it's a place where out of 1,200 planned homes only 90 are currently occupied. Quatrocchi wheels his golf cart to an area where residents live across the street from half-finished houses.

Mr. QUATROCCHI: Notice they removed the signs. They had available signs on these homes. People just walked away. Either they didn't get the settlement or they decided to leave and leave the money on the table.

ALLEN: The people who opted for foreclosure, Wilson says, may be smart. Even if they could sell their houses now, Quatrocchi and Wilson figured they'd be facing losses of at least $150,000, probably more. They're disappointed in Levitt. Both men owned Levitt homes before and moved here largely on the strength of the Levitt reputation. That and promises that this would be a community with unsurpassed amenities, a golf course, a 38,000 square foot club house, a dozen tennis courts, two pools. Now that it's in receivership, Wilson says the new management is doing what it can.

Mr. WILSON: So they're trying to make the people happy, that's what they're trying to do. But we didn't get what you paid for. People say they bought a dream; they got a nightmare.

ALLEN: Despite all this, Wilson and Quatrocchi say they're happy with their houses. If they wait long enough, they believe another builder will take over Levitt's development and eventually Tradition will be a great place to live. But there's another group of Levitt customers who also are bitter at how they've been treated. They're the people who put $40,000 and $50,000 deposits down on a Levitt house.

Mr. JERRY GREENFIELD(ph): I felt that, geez, I don't have a problem here.

ALLEN: Jerry Greenfield put down $45,000 on a Levitt home in Tradition and included another $25,000 for upgrades. When he heard about the bankruptcy, he figured his deposit was protected.

Mr. GREENFIELD: I put my money in escrow, worst thing is going to happen is I'll get a call and somebody will say, Mr. Greenfield, we owe you X amount of dollars for your deposit, we want to send it back to you.

ALLEN: But he soon found out that it's not quite that easy. Even though Greenfield had put the deposit in escrow, Florida law allows a builder access to the money if it provides a bond. Greenfield had to hire lawyer and is now working to recover his money form the bonding company. And that's just the deposit. He doubts he'll ever see the $25,000 he paid Levitt for upgrades. Greenfield says he's learned that among the dozens of people who had deposits with Levitt, he's one of the fortunate ones. Most didn't put their deposits in escrow.

The heartaches here in Port St. Lucie are similar to problems playing out in Levitt communities under construction elsewhere in Florida, also Georgia and South Carolina.

Back at the wheel of his gold cart, Bill Quatrocchi says it's been a sorry end for a company that once banked on it's reputation.

Mr. QUATROCCHI: The oldest and most trusted builder. That's their slogan.

ALLEN: How do you feel about that now?

Mr. QUATROCCHI: Don't trust anybody anymore. Like it says on a dollar bill, in God we trust.

ALLEN: A bankruptcy judge in Fort Lauderdale is currently sifting through the claims competing for Levitt's assets. The good news for Quatrocchi, Wilson and other residents in Port St. Lucie: Levitt's lender here, KeyBank, recently foreclosed on the property and hope soon to find a builder who will resume construction at Tradition.

Greg Allen, NPR News.

MONTAGNE: Levitt and Sons, of course, developed the archetypal postwar American suburb. And you can see pictures of Levittown then and now at npr.org.

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