Construction on this SLO County housing development has been delayed for years. Why?

A ghost town of half-built homes has sat in a residential area of Atascadero for years, marking what should be a bustling construction zone.

Several unfinished houses line the lot, but most neighbors said that in the five years the development has been in progress, they haven’t seen more than a few workers at a time.

The housing project is meant to add 70 units at 10850 El Camino Real. Construction began in 2020 and was initially expected to be completed by 2022.

Two years after that predicted end date, neighbors say construction still seems to be moving at a snail’s pace — with no end in sight.

So what’s going on?

According to the developer’s legal representation, weather and the lasting impacts of the COVID-19 pandemic are to blame.

“It’s been slower than we wanted, but a lot of it is these damn storms,” Kate Neiswender told The Tribune.

The project meanwhile has also racked up multiple lawsuits from frustrated neighbors whose homes were damaged during winter storms.

Paula Ramsum sued the developer, Western U.S. Contractors, and the city for flood damage to her neighboring La Costa Court property, which she rents out.

“This has been an absolute nightmare for me,” Ramsum told The Tribune.

Though Western U.S. Contractors still faces legal issues with Ramsum, Neiswender said the lawsuit has not contributed to the delay in construction.

“That lawsuit is completely unrelated to why it’s taken longer than we wanted it to,” Neiswender said. “Honestly, the worst problems have been storm-related, because it rains so bloody much. That’s the primary reason.”

The Tribune spoke to the parties and examined the dispute as part of its Reality Check series.

Atascadero housing project hit with COVID, weather delays

Still, neighbors in the area said they were concerned that the project is not further along.

Ramsum drives by the development multiple times a week when she goes to check on her rental unit, but said she never sees much happening.

“I go by the property often, and I don’t see much activity at all,” Ramsum said. “Usually when I go by, it’s locked up or there’s one car. I’ll see one or two guys there, but this is a huge project. It should have crews.”

Another neighbor, Brian Booza, who used to work in construction, described it as “the slowest project” he’d ever seen, calling the work “inconsistent.”

“Some weeks there are five or six trucks there working. Other weeks it’s totally locked up,” he said. “Some houses got left out for years without wrapping on it, so it makes you wonder how good is the wood?”

The original plans for the project were approved in 2017 under previous owner Hartberg Properties, to build 48 senior living apartments, 20 townhouses and seven single-family residential cottages, but the tract map for that design expired in 2019.

Western U.S. Contractors bought the property as entitled in 2019. Western U.S. Contractors also owns 140 units at the Oaks Apartments across the street at 9401 Jornada Lane.

Nothing happened at the property for the first year as the developer applied for grading permits, which were issued in 2020, Neiswender said.

Then that same year, the COVID-19 pandemic hit. Due to social distancing restrictions, only one or two construction workers were allowed on site at a time for nearly two years, Neiswender said.

Meanwhile, the developer reapplied with a revised tract map that converted the senior apartments into 43 condominiums.

Frustrated with the project that she said had already flooded her home, Ramsum appealed the design, but the new map was approved in 2023.

The new map expires in 2025 unless a time extension is requested and granted.

“At this point, construction has taken years to build, still is not complete, and now they want to build more,” Ramsum wrote in a 2023 letter of complaint to the Atascadero Planning Commission prior to a meeting to consider the project’s new tract map.

Since then, the developer has also had some slowdowns having to do with trouble finding and keeping subcontractors on schedule, Neiswender said — but she asserted the project hasn’t gone slower than industry standards.

Construction site floods neighboring homes

As the project’s construction stretched on, it racked up at least two lawsuits from frustrated neighbors.

On Jan. 27, 2021, rainwater drained from the El Camino Real project site into Ramsum’s property at 930 La Costa Court and flooded her home.

The incident occurred during an atmospheric river that brought heavier than usual rain to the area, according to Neiswender.

Neiswender said that Western U.S. Contractors placed straw wattles — long tubes filled with natural materials used by construction workers to control stormwater runoff — on the project site, but they were overwhelmed by the heavy overnight rain and washed away.

Water poured over into Ramsum’s yard next door as a result, Neiswender said.

“There’s a drain there, but the drain was blocked, so water overflowed and about an inch of water went into the Ramsum property,” Neiswender said.

Ramsum said it was probably closer to a foot of water.

“It was a big gush of water that came through,” she said.

Ramsum also claimed the pipe was clogged because the wattles washed into the outlet.

“They flooded my property and did an extensive amount of damage,” she said.

That included having to replace her flooring, kitchen cabinets and drywall in all but one of her bedrooms due to mold in the year following the flooding, she said.

Neiswender said the developer brought in professionals to dry Ramsum’s home the night it flooded, moved furniture out into a portable storage unit in the driveway and put her tenants up in a hotel. They also offered to fix her home, Neiswender said.

Despite their efforts, Ramsum was still unsatisfied, Neiswender said.

“She blames us for the damage. She blames us for it not being rented for two-and-a-half years,” Neiswender said. She added that Ramsum wouldn’t let the developer fully fix her home because “she didn’t trust us to do a good enough job.”

Ramsum, however, said that was “completely untrue.”

Ramsum said when the flooding first occurred, Western U.S. Contractors took responsibility and promised to repair her home and pay the rent she lost as a result of her tenants moving out, but they later refused to give her a contract detailing the scope of work they planned to do on her house when she asked for one.

In emails between Ramsum and the developer acquired by The Tribune, she said she had not received any insurance payments or evaluation of the needed repairs six months after the flooding occurred.

“They wouldn’t give (a contract) to me, and so now … they’re flipping it, saying that I wouldn’t let them in,” Ramsum said. “That’s not true at all. I was really expecting them to fix it.”

Ramsum said her insurance later denied her claim, and though Western U.S. Contractors’ insurance offered her a settlement, she claimed the developer contacted the insurance company and told them not to give her the settlement money.

That’s when she sued.

In 2022, Ramsum filed a lawsuit against Western U.S. Contractors for the damage incurred to her property. She also sued the city of Atascadero a year later for the same reasons.

A city representative told The Tribune it could not comment on ongoing litigation.

In June, Western U.S. Contractors filed a cross-claim against Ramsum on the grounds that the flooding would have been prevented if she had maintained her private drainage swale — a ditch for emergency stormwater runoff — as required by her property maintenance agreement.

It is suing for the sums paid on behalf of Ramsum and extra damages for delays to construction that caused it to default on its construction loans, Neiswender said.

Ramsum now faces over $1 million in damages, which she filed to dismiss. The hearing for the dismissal of the cross-complaint is set for Oct. 1.

“I can’t believe they’re suing me for something they did,” Ramsum said.

Winter storms left Atascadero family’s home uninhabitable. Now, they’re suing the city

Another neighbor also had flood damage following atmospheric river storm

Neiswender said another neighbor also experienced flooding at the same time as Ramsum, but Maribel Tejeda Oliver allowed the construction company to come into her home and fix the damage.

“We got in there and did a lot of the work right away so that they could get back in,” Neiswender said.

Oliver tells a different story: She said her home was not fully fixed for two years after flooding in January 2021.

“It was so, so scary,” Oliver said. “It was like a river in my house.”

She said the developer put her and her now-late husband, who was sick at the time and on dialysis, in a hotel while they cleaned and fixed their home.

But when they were told to move back into their home just two months later, Oliver said the house was “ruined” — and unlivable.

There were exposed electrical switches on the walls and no countertops, she said. The baseboard around her home was unfinished and her furniture had rotted, she said.

Oliver also said that movers put her moldy furniture outside, where they left it in her backyard for “at least a year or more.”

Neiswender denied these claims, saying workers later told her that the house “wasn’t like that when we were there.”

Neiswender, who was not yet involved as a lawyer on the case, said she also never heard about any mold damage to Oliver’s belongings.

“I don’t believe we were told about rotting furniture,” Neiswender said. “That’s news to me.”

Oliver said she tried to call and email Western U.S. Contractors many times throughout the repair process, but according to her it would consistently not respond. Oliver said she sent the developer a list of repairs that needed to be made, but it never followed up.

Neiswender said communication between the company and Oliver was disjointed, but they completed all the work that Oliver asked for.

“There was a punch list of things where she said, ‘This isn’t quite right.’ That lasted for several more months, where we kept going back and fixing something else,” Neiswender said. “I know she was frustrated with how long we took to do the punch list, I know that for a fact … but by the time we finished, as far as we knew, it was fine.”

Western U.S. Contractors declined to pay Oliver any additional settlement money, Neiswender said.

Oliver brought her case to small claims court, but was quickly dismissed.

Neiswender chalked Ramsum and the other complaints up to typical neighbor conflicts.

“It’s a pretty run-of-the-mill neighbor dispute, far as I can see,” she said.

What is next for Atascadero construction site?

At this point on the housing project itself, all the underground infrastructure is complete, including pipes, utilities and storm-water drainage, Neiswender said.

Frames for all 27 housing units are also standing.

She said the company is hoping to wrap up Phase 1 by the end of the year, which involves finishing the 20 townhouses and seven single-family residential cottages.

Then it will start on Phase 2 — building the 43 family and affordable living condominiums — but Neiswender said it doesn’t have to start on it right away.

“Because of the nature of the approvals, we could start it a year from now, if we wanted to,” she said. “The phasing allows us to take our time on Phase 1 before we even think about Phase 2.”

But some of the neighbors, including Ramsum, are still not happy with the indefinite timeline.

“I just want this to be over,” Ramsum said.