A Wichita builder of upscale homes said this week that he may face bankruptcy reorganization, his business flattened by the economic downturn.
Ron Peake, owner of Ron Peake Design Build, a three-decade builder of some of the Wichita market's most expensive homes, said he's trying to stay open after the housing market bottomed out. U.S. Bankruptcy Court records show that Peake's company has not yet filed.
Peake said he faces a foreclosure suit on two homes from Equity Bank and has returned homes to three other Wichita banks as he deals with an inventory of unsold homes.
"We're still in business," said Peake, who has built Wichita homes since 1976. "I mean, who hasn't this thing hit?"
Peake said he owes Equity "a little more than a million dollars," which the bank is seeking to recover through a foreclosure action filed last week. Peake, an architect and builder, said his company lost $500,000 last year.
Equity Bank president Brad Elliott confirmed the amount of the outstanding loan.
"The reality is we're building homes still, but they're all customs," Peake said. "You can't get a spec loan, and when I started my spec homes the economy was good, and then the stock market crashed."
Peake said he had five of seven home deals in Wilson Estates fall through when the stock market crashed in September 2008.
"And then one of the two people who did buy lost his job selling airplanes, and that house went back to the bank," he said.
Peake said he hopes to keep a new development, Elk Creek at 45th and Rock Road, in any reorganization proceeding.
That development has 20 homes built in a two-phase plan with about 125 homes planned, he said.
There are plenty of custom home projects on the drawing board, Peake said, but they, too, are suffering from a slow home sales market.
"I've got between 20 and 25 customs to build, but the people involved have got to sell their house," he said. "People aren't moving up like they were, so it's tough to sell their house."
Elliott said he couldn't comment specifically on Equity's relationship with Peake.
But Elliott said he expects other local residential developers to land in the same money crunch as Peake.
"We ran into some of these issues in Kansas City a couple of years ago, but we haven't run into them locally," he said.
Peake said he intends to get his business back on its feet.
"I'm still good friends with most of the banks," he said. "Nothing on my financial record is negative with them — they essentially bought the houses.
"We've been doing this for 35 years, and I think we build as nice a home as anyone in the community."