Thursday, October 30, 2008

Gunstra Builders of Indianapolis Shuts Down Most Sales Offices


Gunstra Builders, a large Indianapolis area homebuilder, has shut most of its sales offices and stopped communicating with clients, leaving buyers at its projects wondering if Gunstra will stay in business or fall prey to the nation's housing downturn.

One of Gunstra's partially finished projects is a 77-townhouse development called Monon on Main in Carmel's new Arts & Design District. Residents there are exchanging e-mails to figure out what's going on with Gunstra, which hasn't staffed its sales office on the site for over a week.

At Blackthorne, a housing development in Plainfield zoned for 322 units, Gunstra has turned management over to another company and stopped new construction with only 23 homes sold.
Lafayette-based Gunstra hasn't commented publicly on its viability. Calls to its main office went unanswered Tuesday and Wednesday.

Phones are disconnected to at least seven Gunstra communities where the company is building homes in Indianapolis, Carmel, Fishers, Plainfield and Zionsville.

"They've retrenched. I am under the impression they are hunkering down . . . to weather the storm," said Jeff Watkins, owner of Environmental Services Associates in Carmel, who serves as a spokesman for residents of Gunstra's Monon on Main townhome project. He said he has talked to Gunstra officials recently.

About 38 units at Monon on Main have been sold, with others sitting unsold and some partially built, Watkins said. Construction has stopped. On Wednesday, townhomes sat partially built on a silent, weedy quarter-block that holds a trailer-sized trash bin and stacks of bricks.

Soori Ardalan, who runs Soori Gallery in a townhome at Monon on Main, said Gunstra recently told her by e-mail it no longer would respond to maintenance issues she has with the home she bought almost a year ago and she would have to turn to a warranty company.

"I don't know what's happening," Ardalan said, calling herself "very disappointed" with Gunstra's disappearance. Besides her concerns about getting repairs done on her unit, she said residents also wonder if they need to take control of their residents association from Gunstra.
The city of Carmel has pushed redevelopment of its old downtown, and Monon on Main occupies a key site on the north side of Main Street.

"Monon on Main is a pretty high-profile project. If this means it's going to end up . . . unfinished, that's not what we had in mind," said Mike Hollibaugh, Carmel director of community services. He said he is trying to find out the status of Gunstra.

The company, which specializes in condominiums and townhomes, was started in 1976 by Bruce Gunstra, a former construction manager for National Homes Corp. He expanded into the Indianapolis market in 1984, and the company has built hundreds of homes since.
In Plainfield, Gunstra has notified residents of its Blackthorne development that a new management company has taken over running the fledging homeowners association, a resident said. With the development far from done, a promised clubhouse and swimming pool haven't been built.

Earlier this year, a nursing home developer arranged with Gunstra to buy 9.3 acres in the Blackthorne subdivision for a 264-bed facility, but the rezoning request was denied by Plainfield.
Homebuilders in Indiana and elsewhere find themselves under financial stress as a result of their own overbuilding, a large inventory of unsold older homes on the market and the end of a period of easy-to-get mortgages requiring small down payments during the housing boom years of 2002-2006.

In the metro area, new home construction has plummeted to an estimated 5,000 units this year compared with a peak of more than 15,000 in 2001 and 7,331 last year.
Among the major builders who have disappeared from the Indianapolis market in the past 18 months are locally based Davis Homes, which shut its doors in July, and Los Angeles-based KB Homes, which pulled out last summer. Is Gunstra going Bankrupt?

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