Sarasota-based Jade Homes was all over the news in August 2006, when it shut down operations. The real estate market had collapsed overnight, and the company still had 75 homes to finish. The owners of those unfinished homes were shocked, furious and frightened, and media coverage was harsh, holding Jade up as one of the big, bad builders who had taken advantage of innocent homebuyers.

But even while the company’s reputation was taking a severe beating, Jade’s president, Andrew Coles, was working behind the scenes to remedy the situation. During the late summer and early fall of 2006, he filled endless days with difficult meetings and painful phone calls to customers, subcontractors and other home builders, all in an effort to give Jade’s customers what they paid for. Unlike many other builders affected by the region’s—and nation’s—real estate slump, Coles didn’t walk away. He picked himself up and joined forces with another home builder, Sarasota-based Vision Homes, and today, the majority of those 75 homes have been completed.

Jade Homes was founded in 1997 by the British-based Coles family, which has a long history in the building business. “I was born and bred in the industry,” says Andrew Coles, who speaks thoughtfully and calmly, although he seems a little gun-shy as well. His father, grandfather and great-grandfather were all builders, and Coles “grew up in the business and worked my way up the ranks.”

Over the years Jade Homes enjoyed steady growth and, like many other home builders, saw a dramatic increase in business during the real estate boom of 2004 and 2005. In 1998, its first year of business, Jade sold 18 homes. In 2001 it sold 42, and in 2005 it sold 125, gaining a reputation for quality and garnering such acclaim as The Greater Sarasota Chamber of Commerce’s 2003 Young Business of the Year Award. The company eventually built an organization to handle sales of up to 150 homes a year. It had model centers in North Port, Port Charlotte and Rotonda, and at Rye Wilderness Estates in Manatee County; and it was one of three exclusive builders at Oak Vistas, a mixed-use development with single-family homes, townhomes and office space off Cattlemen Road in Sarasota County.

Then the market did a 180-degree turn. “The market came to a stop in the fall of 2005 very abruptly,” says Michael Padgett, vice president and owner of Vision Homes, who came to Coles’ rescue and helped him reorganize the company. Coles and Padgett have been friends for years, having first met through the Home Builders Association of Sarasota County. Their wives are friends, their children play together, and the families have gone on several ski vacations together. “It wasn’t a slowdown,” says Padgett. “It just stopped, and it caught a lot of builders off guard.”

In the first six months of 2006, Jade Homes sold only four houses, nowhere near what the company needed to pay its 30-some employees and cover its other expenses. By the time August rolled around, Coles had basically determined that he had no choice but to shut down. That’s when he went to Padgett for advice.

At that time, Jade had 75 homes it needed to complete—with sale prices ranging from $250,000 to $750,000. Most were in North Port and ranged from $250,000 to $325,000. Coles says the total cost to complete them all was around $7 million, and Jade Homes owed its subcontractors about $1 million. “The ceiling was coming down, and the walls were closing in,” he recalls.

Jade had sold so many homes and had so much overhead that when the cash flow from new sales dried up, there was nowhere to go. It just ate Coles up. “We relied on profit to handle the overhead,” he says.

The easiest thing for him to do at that point would have been to file Chapter 11 bankruptcy. He could have just walked away from it all and left others to clean up the mess. “But the right thing to do was to sit down and work it out,” he says. “We had contracts with homeowners, we owed subcontractors. I wanted to do the right thing for the industry.”

When Jade’s shutdown made it into the press, Coles might have wished he had just walked away. “When everything hit, customers were calling and Andrew didn’t have the answers at that point,” says Tina Burks-Riva, who has worked for Jade Homes since August 2005 and serves as the company’s office administrator. “People came to the office and were kicking at the doors. I knew what they had to be going through, but at that time the answers weren’t there.”

Coles considered selling Jade’s uncompleted homes to another builder but couldn’t reach an agreement with anyone. So Coles and his friend Padgett came up with a plan for Jade to finish what it had started. Jade trimmed its staff to four: Coles, Burks-Riva, a field superintendent and another office-based employee. Staff salaries also got a trim—by about 20 percent—and employees lost their benefits. “It hasn’t been easy, but it’s been worth it,” says Burks-Riva. “I wanted to see this through. I knew [the company] hadn’t done anything wrong.”

Vision Homes let Jade move into its office on Blaikie Court, east of I-75 off Fruitville Road, at no charge (the two companies share expenses for equipment and supplies) and agreed to serve as a consultant to help get Jade’s homes finished. “You have to lead by example,” says Padgett. “It’s all about doing the right thing. I wanted to do it for the industry. The homeowners deserve to be in their houses.” Padgett held an employee meeting to make sure everybody in his company was on board. The move created additional work for a few Vision employees, but that wasn’t seen as a bad thing by anyone involved.

Coles and Padgett sat down face-to-face with Jade’s subcontractors to explain the situation. They negotiated payments of between 50 and 80 percent of what the company owed at that time, with assurances that the subs would be paid in full for all future work.

“The only way to execute [the plan] was to have the industry come on board,” says Padgett. “Most everyone did except for a few subs. They understood and made it work. That takes a lot. The subcontractors were the real heroes. Jade Homes had a tremendous reputation and had always treated its subs well, and now they were doing the same for Jade.”

Sarasota-based Lonnie Miller Aluminum was one of the subcontractors. “At that time, some people said, ‘Why negotiate down?’” says Miller, who’s worked with Jade Homes from the beginning. “But I thought, ‘Why not get a little something rather than nothing?’ It was a bummer to have to take the blow, but that’s part of being in business. Jade Homes has been good to work with. They always paid the bills on my end until this last problem they had.”

Gregg Brown, president of Port Charlotte-based Gregg Electric Corporation, saw Jade’s plan as a way of “recouping a portion of some of the money I was going to lose if they did completely close up. I was going to incur some loss; it was just a matter of how much,” he says. He also realized that working with Jade to finish the homes would help keep his company’s name in good standing and would provide him with work at a time when the construction industry had slowed down considerably. “It was a good business decision from that standpoint, so I decided to see how things worked out,” he says.

With its overhead trimmed and its outstanding bills whittled down, Jade could focus on the work of actually completing its homes. The money to do so was already in the bank. As Coles explains it, when a customer chose to build a home with Jade, they obtained a construction loan from a lender. When they closed on the loan with the lender (which had to be done before construction commenced), Jade would receive a 10 percent deposit of the price of the home. Then during the course of construction it would receive six construction draws from the lender, with the lender ensuring that work was progressing as it should. The final draw would not be disbursed until the home was complete and a certificate of occupancy had been issued by the building department in the city or county in which the home was built. At that time, the owner’s construction loan would convert into a mortgage.

Of the 75 homes either under construction or under contract at the time of the shutdown, 57 have been finished as of this month. Of the remaining 18 homes, seven had not been started and the homeowners decided not to build, seven were being finished by the homeowners, and four were inventory homes that are now completed and for sale.

Sarasota resident Wayne Underwood, who contracted with Jade to build two homes in North Port as an investment, says he was alarmed when he first heard of the company’s troubles. “After I was able to contact Andrew, we had a pretty good conversation and then a face-to-face meeting where he told me his intent,” says Underwood. “I had enough confidence in the guy from that meeting that I said, ‘Hey, let’s go ahead and get these things finished.’”

Underwood says from that point on Coles gave him regular updates and completed the homes according to the contract. “I find the guy just incredible,” says Underwood. “The best thing for him to have done financially was to walk way from everything. I know that; I’ve been in business myself.”

Frank Giuffre and his wife had also contracted with Jade to build two homes in North Port. The New York City–based couple was moving to Florida, and planned on living in one of the homes and renting out the other. Though they weren’t in the area yet when the shutdown occurred and construction on their homes was halted, Giuffre says the Jade team did a good job of keeping him informed and in the end assured him they could get the job done.

“A lot of jack-of-all-trades–type guys were saying, ‘I could finish your home,’” says Giuffre. “Those aren’t exactly the guys you want building your house. Andrew personally called me with Mike and said, ‘This is what happened, here’s the plan, here’s what we’re looking to do.’ They said they would complete [the homes] to the same specifications they would have before, with the same extras. That was really something I was impressed with.”

The couple had paid for $40,000 worth of extras in their homes, and Giuffre says everything was completed exactly the way they wanted it with the quality they expected. “We went with Jade from the beginning because they were one of the best-quality builders and they had a very good reputation,” says Giuffre. “Unfortunately, they got caught up in what everybody got caught in. Although the homes took longer than expected and there were some expenses on my side that weren’t expected [the couple sold their New York residence before their North Port home was finished], I felt they really stepped up to the plate and did the right thing for homeowners.”

By now, customers should be in possession of the 57 homes, just about a year after Jade reorganized and resumed construction following its August 2006 shutdown. “I applaud what they did; they did a great job,” says Larry Anderson, executive vice president of the Home Builders Association of Sarasota County. “The right thing happened for all concerned.”

Of course, not all of Jade’s customers are happy, and some lawsuits against the company are still pending. Though she did not file any legal action against Jade, Joyce Castro was one of the seven buyers who did not have Jade finish her home. She says the company never offered to complete it for her; she had to find another builder and obtain money from her family to finish the job. (Coles says Jade tried contacting Castro via phone and mail with no success, and that she never contacted the company herself.)

“They were good, a first-class builder,” Castro says. “That’s why I hired them in the first place; they came highly recommended. To me, they should have seen this coming a year before, even six months before. They need to think of what can happen for the customer’s sake. If you don’t think of the customer your reputation doesn’t mean anything.”

Castro has also had to deal with a lien that was placed on her home. “I don’t think it was right for them to leave me holding the bag with the lien on house,” she says. “Andrew should have taken care of [the lien].”

“Any homeowner who chose not to have us complete their home would have to have dealt with any liens on their home themselves,” says Coles. “On homes we did not complete we had no future draws [cash flow] to satisfy them. Some homeowners thought that they would be financially better off to complete the home themselves. Some may have profited from that option. It may have cost others more money, but that was the choice they made.”

Looking back, Coles says, “If I had known that the market was taking a major dive instead of just a slowdown, I probably would have reacted a lot quicker and scaled down the size of the company to reduce our monthly overheads. But every month you think it is going to get better and sales will pick up. After the first six months of the year had passed, I knew the market was not going to get any better. Unfortunately, it was too late at that point. I was devastated by the whole experience, I have learned a lot from this whole process, and I believe it has made me a better person.”

Padgett says Coles was not the only homebuilder to overestimate the market’s staying power. “When the market’s like it was, it’s easy to get caught up in the hype,” says Padgett. “The market made the decisions for you.”

“It’s a supply and demand situation,” says Coles. “If you have people buying houses, you keep taking orders. It would have been nice to have had a crystal ball and seen what was coming.”

Coles says he isn’t thinking about the future right now, but is simply focused on getting his customers into their houses. Though he was all but convicted in the court of public opinion, he says the “people who know me know the truth.” And if he does decide to stay in the home building industry, the actions he’s taken over the last year will be remembered by many.

“I would work with Andrew in a heartbeat if I were to build another house,” says Underwood. “You get to know people through adversity and to me his integrity is just incredible. If you’re interested in building a home, you need to look that guy up and see if he’s in business and let him do it, because he’ll do it right.”