New England Developer Center of Controversy

By Jack Rodolico

New Hampshire Public Radio

Published: 12-11-2016 12:43 AM

Laconia, n.h. — In the Marines, Dan Crim learned how to strap an air-tight respirator over his mouth and nose to protect himself from a biological threat. He was glad to never have to use one in a combat zone during his five deployments overseas.

Now a retired Marine, Crim wears a respirator whenever he sets foot in the house he bought, but no longer lives in.

In the garage of the one-story, pre-fab house, a wall calendar is stuck on June 2014, when Crim says the family finally had to abandon the home. Inside, Crim points to the white, green and black film that coats his children’s toys, family Christmas decorations and his old military equipment.

“It infuriates me,” Crim says from inside his hazmat suit. “Why am I back here? Why do I have to go through all this? They should have fixed it in the beginning.”

Dan and Dawn Crim bought their home in Paugus Woods, a Laconia subdivision, in 2010 from Brady Sullivan Properties, a Manchester-based developer. They paid $175,000 for the home, according to property records. Within weeks of moving in, they say they noticed drastic temperature shifts from room to room. Rainwater poured through cracks in the foundation.

Over time, mold and yeast grew so extensively in the house that spores traveled through the HVAC system, according to a report from a mold expert. The Crims say the mold made them sick with chronic colds and memory loss. They sued Brady Sullivan, moved out and never returned.

The Crims and five other homeowners also complained to the Consumer Protection Bureau of the New Hampshire Department of Justice. The state hired a civil engineer to inspect 40 brand-new homes. The engineer found 450 building code violations, including walls that were not properly attached to floors and houses that had not been securely fastened to their foundations.

The Attorney General’s Office sued Brady Sullivan, alleging shoddy construction at Paugus Woods in 2011. The safety problems were so pervasive, according to the state’s complaint, they “may indicate a pattern or practice by the subdivider to ignore applicable building and house codes, in violation of the law.”

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The state and Brady Sullivan ultimately agreed to a settlement. But the case is just one in a list of complaints and regulatory actions in recent years against one of New Hampshire’s largest developers.

Homeowners and tenants have accused the company of poor construction that created structural and safety hazards that put them at risk. Court records describe allegations of breach of contract, intentional misrepresentation and violation of consumer protection laws.

In 2012 — less than a year after the state filed its lawsuit against the developer — the Evergreen Condominium Association in Laconia sued on behalf of approximately 70 homeowners, claiming Brady Sullivan left them with $1.2 million in fire, safety and structural defects.

Later that same year, more than 80 plaintiffs from Brindlewood Preserve Condominium Association in Rochester alleged Brady Sullivan sold them homes without disclosing the existence of asbestos, leaving them with $2.7 million in abatement and moving expenses.

When they spoke out about the problems, some homeowners allege Brady Sullivan’s lawyers bullied them by filing counter lawsuits.

Not all complaints make it to court. In recent interviews and emails to the Lebanon Planning Board, homeowners at a Brady Sullivan subdivision called Prospect Hills say their 5-year-old homes are deteriorating from water infiltration while sinkholes are eating chunks of driveways. They also claim Brady Sullivan took more than $10,000 in management fees the developer was not entitled to.

The Planning Board approved a 117-unit expansion at the Lebanon site and also ordered a new traffic report to gauge road conditions once 90 of the new units are filled, the Valley News reported last month.

Meanwhile, state and federal regulators have accused the company of repeatedly mishandling toxic materials.

The Environmental Protection Agency recently found Brady Sullivan responsible for creating the largest lead paint hazard in recent New England history and dumping a likely carcinogen in a suburban community.

Meanwhile in Vermont, the Agency of Natural Resources says it found a Brady Sullivan employee and contractor burning construction debris in a bonfire at Snow Vidda, a condo complex at the foot of Mount Snow.

In 2015, the Massachusetts Department of Environmental Protection and the EPA were considering a criminal investigation after regulators fielded a tip that a Brady Sullivan contractor had moved 10 truckloads of asbestos and lead from New Hampshire and buried it in the basement of a Lawrence, Mass., mill owned by Brady Sullivan. MassDEP and EPA both acknowledge an ongoing investigation regarding Brady Sullivan, but both said they are not at liberty to discuss the nature of those investigations.

Attorney General Joe Foster said his office has never initiated a more thorough investigation of the company since the 2011 case in Laconia. Foster said his office has received no further complaints about the developer, adding that oversight of developers like Brady Sullivan is largely the responsibility of local building inspectors, planning boards and code enforcers.

Aiming for Affordability

On the northern end of Manchester’s skyline, there’s an office building with huge gold letters at the top that read “Brady Sullivan Tower.”

Shane Brady and Arthur Sullivan started Brady Sullivan Properties in 1992, during a nationwide real estate slump. The company stayed nimble by buying and refurbishing financially distressed properties, expanding over the years by converting apartments into condominiums and half-developed lots into subdivisions.

Today, Brady Sullivan Properties is busy across New England, converting abandoned industrial mills into offices and apartments, including three mills in Massachusetts and seven in Rhode Island. In New Hampshire, the developer has proposed 90 apartments in a mill in Keene, and, in Concord, the company recently purchased two historic office buildings just steps away from the Statehouse.

Neither Shane Brady nor Arthur Sullivan agreed to be interviewed for this story. The company’s general counsel, Marc Pinard, did respond to questions via email. He said Brady Sullivan denies all complaints raised by consumers in court, “and there has never been a judicial finding that homes sold or rented were unsafe due to construction flaws.”

Trouble With Contractors

Realtor, developer and landlord, Brady Sullivan Properties also is effectively a general contractor, overseeing massive construction projects in multiple states at the same time. The company relies on smaller companies — independent contractors — to do much of the on-the-ground work: digging ditches, removing asbestos and building houses.

Some of those contractors have repeatedly violated laws, which regulators have blamed on Brady Sullivan.

For example, the Crims’ prefab home was built in a factory by one company, and then erected in Laconia by another contractor. But the Attorney General’s Office said Brady Sullivan violated consumer protection laws because the developer oversaw the on-site construction and sold the home.

Similarly, in 2014 a contractor called McKibben Environmental LLC dumped more than 8,000 tons of soil contaminated with PCE at a Londonderry gravel pit owned by Shane Brady, according to the New Hampshire Department of Environmental Services. Ultimately, DES notified Shane Brady and Arthur Sullivan that their company had violated five state laws by storing a likely carcinogen in an unregulated location.

In internal memos and emails, New Hampshire environmental officials called this incident a “major ethical dilemma,” describing Brady Sullivan’s response as “schizophrenic.”

In another case, regulators have gone after both the developer and a frequent Brady Sullivan contractor called Environmental Compliance Specialists Inc.

Between 2013 and 2015, ECSI was cited 16 times by the U.S. Department of Labor’s Occupational Safety and Health Administration for breaking federal rules meant to protect workers from accidents and toxins. After those incidents, ECSI broke city, state and federal laws while doing demolition work for Brady Sullivan in May 2015 at Mill West, a Manchester apartment development, safety officials have asserted.

Lacking the proper permits and training to sandblast lead paint, ECSI sent toxic lead dust into Mill West apartments, according to the EPA, while simultaneously exposing its own workers to arsenic and cadmium, according to OSHA.

A few months later, according to a tip received by the Massachusetts Department of Environmental Protection, ECSI allegedly drove 10 truckloads of the toxic debris to Massachusetts and buried it in basement cement at Pacific Mills in Lawrence.

While public health regulators have been trying to track down ECSI, laborers have filed complaints against contractors who worked on Brady Sullivan sites, alleging they were not paid for work they did there. The complaints have reached labor regulators in Rhode Island, Massachusetts, New Hampshire and Connecticut.

One of those contractors, Connecticut-based Interior Partition Specialists, has repeatedly been accused of wage theft on Brady Sullivan job sites.

One family of undocumented immigrants from El Salvador recently told the New Hampshire Department of Labor that IPS and another drywall contractor hired to work at Brady Sullivan’s Mill West site in Manchester refused to pay the family $20,000 in wages.

Brady Sullivan’s attorney says the wage theft claims “do not relate in any way to the conduct or actions of Brady Sullivan.” An attorney with the Department of Labor says if the contractor does not pay the family from El Salvador, then the state will seek the money from Brady Sullivan.

Pushing Back

In 2015, New Hampshire Public Radio published a story about lead dust contamination at Mill West. When Dawn Crim saw the story, she wrote several lengthy comments, describing her experience at Paugus Woods in Laconia.

A few weeks later, Brady Sullivan sued Dawn Crim for defamation. In court records, Brady Sullivan argued some of Crim’s statements were not true.

Other Brady Sullivan customers say they were subjected to similar approaches.

In another class-action suit from 2006, homeowners in Manchester accused the company of advertising homes with hardwood floors that were actually plywood. Brady Sullivan countersued on a malicious prosecution claim — a move the plaintiffs’ attorney described in a court filing as “a transparent attempt to intimidate the five named plaintiffs into dropping their claims.” Pinard, Brady Sullivan’s attorney, disagrees. “Brady Sullivan has never filed a frivolous action and no court has ever made any such determination,” Pinard said.

Some Settlements

In 2014, the Attorney General announced the state had settled the Paugus Woods lawsuit against Brady Sullivan. According to the attorney who worked on the case for the state, Brady Sullivan agreed to fix the 450 code violations and to buy back five homes, including the Crims’.

“A home is the most significant purchase many of us will make in our lifetimes,” Foster, the attorney general, said at the time.

“We are pleased that the matter was brought to our attention and that we are able to protect these homeowners.”

Although the Attorney General’s Office was pleased with the settlement, the five homeowners rejected the buyback, instead pursuing their own lawsuits.

The Crims say the state’s settlement with Brady Sullivan would have provided them with little relief.

They say they would have still been on the hook for their closing costs, property taxes and possessions destroyed by mold and rot.

Foster and others say it is difficult to hold developers accountable for the problems homeowners encounter after the sale. The attorney general points out that, unlike doctors and plumbers, general contractors in New Hampshire do not need a license to operate, so the state cannot threaten to pull a license for negligent behavior.

“If they failed to follow building codes you could pull their license, and that could be helpful,” he says.

Across New England, a range of often isolated state and federal agencies oversee individual aspects of the real estate business: land development, consumer complaints, public health, workers’ rights and the environment.

Foster said it “may well be wise” to take a look at the complaints filed against Brady Sullivan over the years.

As with other consumer lawsuits against Brady Sullivan reviewed by New Hampshire Public Radio, the Crims eventually agreed to a settlement before the case went to trial. According to the family’s attorney, that settlement happened this fall, shortly after the Crims sat down for an interview for this story.

The terms of the settlement are undisclosed, but property records indicate one of Brady Sullivan’s affiliated limited liability corporations purchased the Crims’ home for the same price the family paid for it. The Crims’ attorney also says the couple agreed to a nondisclosure agreement, meaning they cannot talk about the case without the threat of being sued.

As part of the agreement, Brady Sullivan dropped the defamation suit against Dawn Crim.