Home Solutions of America's (HSOA) stock has surged lately as investors cheer two big construction-contract announcements. But an inspection by TheStreet.com shows progress has been slow on one set of projects.
In mid-May, Dallas-based Home Solutions issued a press release saying it had landed more than $100 million worth of work on three buildings in New York City. It described the contracts together as the "largest in the company's history" and said it expects its Fireline Restoration unit to complete $12 million in work under the contract this year.
"We are excited to provide construction services on these high profile mixed-use residential and commercial projects," management said in the release.
But two of the three New York City projects don't even have building permits,
has learned. The other had been tagged with a stop work order, preventing construction for several months.
It isn't clear whether the permit issues or stop-work order could keep Fireline from doing its expected work on the contract this year. Home Solutions Chief Financial Officer Jeff Mattich did not return repeated calls for comment. But a delay surely wouldn't be appreciated by investors who have sent the stock up 30% in a month.
The work is set to be performed by Home Solution's Fireline division in a joint venture with Blue Diamond Construction, a New York-based construction management firm that itself is clouded in mystery.
Blue Diamond has no Web site or listed phone number. Through a search of New York City building records,
finally located Rick Holowchak, president of Blue Diamond, via telephone Thursday.
Holowchak declined to give the locations of two of the three projects Home Solutions will work on because doing so "would be more of a headache until the permits are done," he said. Holowchak also explained that he is partial owner in some of the projects but declined to explain further.
The two projects are located somewhere on the Upper East Side of Manhattan and in the Whitestone section of Queens, he confirmed
The other project, which is the first that both firms will work on, is located at 142 North 6th St. in Brooklyn, Holowchak said. Building records from the city show that the site suffered from a stop work order for several months until late April, when the order was rescinded. The currently empty lot is the future home of Urban Green Condos, a 44-unit condo project in the Williamsburg section of Brooklyn.
In its press releases, Home Solutions talks about eventually doing work on 339 condos and 160,000 square foot of mixed-use retail space with Blue Diamond. That means that aside from Urban Green Condos, investors remain in the dark about the locations of the remaining 295 condos and the entire retail site.
Besides the murky nature of the future sites, Blue Diamond itself remains a puzzle to investors.
Press releases from Home Solutions say Blue Diamond and Holowchak have worked on several New York City projects, including 60 Spring St. in Manhattan and 700 Pacific St. in Brooklyn.
Both of these condo projects were built by Leviev Boymelgreen, one of the largest development firms in New York City. Shannon Lynch, a representative for Leviev Boymelgreen, says Holowchak was a director of construction on both projects as an employee of the firm's internal construction division from 2002 to 2004. According to Home Solutions' press release, Blue Diamond was founded in 2000.
Lynch says Leviev Boymelgreen has never heard of Blue Diamond or SD Contracting. Holowchak, for his part, claims he was never an actual employee of Boymelgreen, but a hired consultant working under the Blue Diamond name.
Curiously, another project that Holowchak and Blue Diamond worked on of late, according to the Home Solutions press releases, is 142 North 6th Street. For some odd reason, Home Solutions didn't mention in its press release that this is a project that it also will be working on under its big contract win, as Holowchak confirmed.
It sure will be interesting to see what the two other future sites Blue Diamond and Home Solutions will look like -- once the building permits are filed, of course. And if the permits aren't filed, investors will be wondering just how rigid those contracts with Blue Diamond are. For now, Home Solutions' management isn't saying.
Be sure to watch Nick Yulico's video take on this story for TheStreet.com TV.