Ghost of Metropolis Past
Latham "was chronically in trouble with the city," said Austin attorney Don Taylor, who represented the plaintiff tenants on both occasions. "He just didn't seem able to perform even up to minimal standards. That kind of goes beyond bad luck if you ask me."
With the threat of his bank foreclosing on Plantation Oaks, Latham sought out the help of Hilton, a young real estate broker in Austin, who loaned him $200,000 to make the first round of construction improvements on the property. In exchange, Hilton would have 25% ownership of the project. When Hilton inquired about Latham's previous business experiences, Latham gave a gleaming story about the success of the Park Place renovation projects, which Hilton said he later found to be false. In December 1996, Latham defaulted on his loan, and Hilton eventually took full control of Latham's newly formed business, Renue Construction Corp.
The deal still left Latham as the general contractor of Renue, but any construction done on the complex first had to be approved by Hilton, Latham's bank, and his architect. Latham then hired Synergy Technology Corp., owned by Joe Anthony, as the project's subcontractor. As a subcontractor, Anthony was responsible for hiring all workers for the project, one of whom was Perez.
With Anthony hired, Latham immediately violated his contract agreement when, in April 1997, he ordered crews to begin work on the apartment, without prior approval from Hilton, the bank, or the architect. Hilton says that while he was out of town, a bank official called to tell him that crews had been performing unauthorized work for three weeks on the apartments. When Hilton arrived back in Austin, he discovered that the crews, under Anthony's direction, had essentially gutted entire buildings from floor to ceiling and caused over $1 million in damage. Enraged, Hilton set up a meeting the next morning with Latham, Anthony, and Plantation Oaks architect Tom Lea to discuss what had happened.
"We never accepted him as a contractor," recalled Lea, referring to Anthony. "It was obvious he was tearing the place up."
The next morning, Hilton and others waited at the job site to talk to Anthony. But Anthony never showed up. They were informed later that Anthony had suffered a fatal heart attack earlier that morning. That left Hilton stuck with over $1 million in damages that had been ordered by a dead contractor. What's more, Hilton later learned, Anthony had not paid a single worker since the project began. Following Anthony's death, construction on the project came to a halt and workers were told to return in two weeks to be paid. Hilton said he contacted Anthony's lawyers to see if there were any avenues within his estate to pay the workers, but there were none.
When crews returned two weeks later and discovered they weren't getting paid, a riot nearly broke out and the police were called. Frustrated with the situation, Hilton ceased all relations with Latham, who reportedly disappeared and hasn't been seen since. The Chronicle made several attempts to contact Latham, to no avail.
For almost a year thereafter, Perez joined forces with David Murphy, a business associate of Anthony's, who had initially loaned the contractor $75,000 to jump start Synergy. When Anthony died, Synergy was declared defunct, leaving Murphy trying to recover the money he had loaned his now-deceased partner. For months, Murphy and Perez insisted that Hilton should pay the two of them, and they in turn promised to pay the workers once they were located. Hilton said he repeatedly refused the offer because no one could produce time cards, or even a list of the workers' names. Finally, says Perez, when Murphy realized no legal recourse could be taken against Hilton, he disappeared as well.
During September and October of this year, LULAC and IWW were contacted to act as third parties in the labor dispute, since distrust between Hilton and Perez still remains high. Although Synergy is legally responsible for paying the workers under the terms of the contract, Hilton has agreed to compensate them.
"We're committed to getting everyone paid," said Perez. "We have faith and won't give up until that's done. This kind of thing happens all the time. We want to let all the workers know that in situations like these they aren't powerless."
Hilton also is glad that the end is in sight. "I'm just so happy that this mess is finally worked out," he said. "There's more than enough money in the fund to pay all the workers." Hilton also said that whatever money is left over willgo toward various nonprofit workers' rights organizations.
Marcelo Tafoya, Texas immigration affairs chairman for LULAC, said that each of the workers is owed an average of about $300 to $500. He, along with John Hitzfelder of the IWW, wonders why this problem dragged on for more than a year. "I think it's terrible that people work hard for their money and can't get paid," Tafoya said. "If you know how the system works, you should correct these problems when they happen. But this is going to be a real payoff for them. We're fighting real hard to get this money out before Christmas."