Two former Pool & Spa News Top 50 builders – one considered an institution in days past – have faced license suspensions and a flurry of local media coverage after the companies allegedly abandoned pools in various stages of construction.
Paddock Pools and Cameo Pools, both based in the Phoenix area, are being investigated for a combined 35 open complaints against them – 22 for Paddock, 13 for Cameo. Of these, at least 12 have been deemed substantiated enough for the Arizona Registrar of Contractors to file citations calling for administrative hearings.
The hearings are scheduled for June 19 and will involve projects contracted between March 2014 and March 2015. Depending on the outcome, the builders could face revocation of their licenses or increased bond requirements.
Both contractors are owned by NexGen Holdings Corp. Paddock in Phoenix is not affiliated with other companies holding the Paddock moniker in different regions.
Local subcontractors said the longtime builders have left several subcontractors unpaid and likely owe hundreds of thousands of dollars. “None of the subcontractors have been paid,” one said. “Everybody’s owed money. Everybody.”
While there have been no reports of the companies closing, and Paddock’s outgoing voicemail remained the same as before the suspension, local builder Tim Murphy of Presidential Pools said employees of the firms were looking elsewhere for work. He and others said they are working with homeowners to get their installations finished.
Press accounts began surfacing earlier in the spring, after consumers contacted local outlets to complain. Once the ROC stepped in, the situation garnered almost daily press, Murphy said, as well as consumer trepidation.
“A couple of our customers who’ve been building pools called us and said, ‘Hey, can we hold our final payment because we’re afraid,’ ” he said. “So it’s bad for the industry. … With social media and all that, it’s putting a bad rap on all us builders.”
Paddock, a former Pool & Spa News Top 50 company, once was something of an icon in the industry. It started as a franchise of the historic national builder founded in 1924 by Pascal Paddock, considered the father of the modern pool industry. A small family dynasty began in 1958, when George Ghiz purchased the franchise from Paddock Pools of California. He opened one of the nation’s first design centers containing full-sized pools to show homeowners what they could have in their backyards. In the late 1980s, Ghiz’s sons took over operation of the business. Under the watch of Buzz, David and Edward Ghiz, the firm always vied for the No. 1 construction spot in the Phoenix market, while its stores were considered a paragon for pool and spa retailers across the country.
In 2004, Paddock reported its market share at 22 percent – and this in one of the industry's most competitive urban centers. In that year, it had eight locations in Phoenix and two in Las Vegas, and built approximately 2,500 pools. The company held spots on the Pool & Spa News Top 50 Builders list for nine years until 2012. It always occupied the top 10, and ranked as high as No. 3 in 2003 and 2004.
But Paddock changed hands a few times since 2005, when the Ghizzes sold to the national private-equity firm Lincolnshire Management. The company took a turn in the years after the recession. Rumors circulated that it was in trouble, while permit reports showed a decline in market share. In 2013, after all but two of its stores had closed, the company was sold to its former general manager, Craig Maggi, and an investment banker, Tom McKee. Last year, it was sold to NexGen Holdings.
Cameo Pools also held spots on the Pool & Spa News Top 50 list. It was purchased by NexGen before Paddock – in April 2013.
Carol Meyers, NexGen's chief operating officer, told the local East Valley Tribune that Paddock and Cameo carried over a lot of debt when her company made the purchase.
Murphy was surprised by the timing of NexGen’s license suspension. “The economy [here] is doing great, and the market’s up,” he said. “You can [understand] when there’s a downturn, but when there’s an uptick, it doesn’t make sense.”
Calls to Paddock Pools and Cameo Pools were not returned.