How did Garofalo’s home price jump $60,000 in a day?

Theresa Moreau

HUNTINGTON BEACH -- A Christopher Homes executive said this week that

any upgrades made on new homes in the exclusive St. Augustine

neighborhood would have been reflected in the initial purchase price,

raising questions as to how Mayor David Garofalo could have sold the

property for an additional $60,000 after owning the house for just one

day.

Garofalo said he made only $1 when he sold the Poppy Hill Circle home

for $625,000. Garofalo claims the $60,000 increase from his original

purchase price of $565,000 was due to upgrades to the ocean-view home.

“I have told you and everyone else the exact price of the house

charged me by the builder, plus the exact amount charged me by the

upgrades company, plus the closing cost charged everyone else was the

price of the house paid by Pearson, plus $1,” Garofalo stated in a memo

he faxed to the Independent in June.

Several St. Augustine homeowners confirmed their upgrades were

included in the initial sales price.

Phil Yasskin, vice president of sales and marketing for Christopher

Homes Development Co., said while his employment for the company only

began in the summer of 1998 -- just after Garofalo bought the home -- the

procedure on buying upgrades has not changed.

“When your house is finished, you pay for it,” Yasskin said.

Yasskin said homeowners can’t do any upgrades on their own until the

escrow closes because of potential problems that could lead to

litigation.

“You can’t go in and do work on the house until you have title to that

property because they’d have to take a lot of risks,” Yasskin said. “We

don’t get the money till it closes, and they don’t get the deed till it

closes.”

Garofalo, who said he originally planned to live in the gated

community, has explained that he bought the home on behalf of George

Pearson, a friend from church who he says gave him cash for the deal.

According to county records, Garofalo was given the deed on the

property from OC Ventures II LLC -- the developer’s investment and

finance company -- on July 27, 1998. The house was quitclaimed to Pearson

the next day, although the deal was not officially recorded for another

two days.

Although Pearson said he gave cash to Garofalo to complete the real

estate transaction, he later took out a loan to finance the purchase.

After Monday night’s council meeting, Garofalo reiterated that he made

only $1 on the home.

In an earlier interview, Pearson said the house included marble, tile

and carpet upgrades.

One homeowner, a building manufacturer who bought a house in the St.

Augustine tract, said it would have been farfetched for Garofalo to have

any upgrades installed in the Poppy Hill Circle house.

“He closed the very next day, and a contractor wouldn’t be able to do

the work in the time that he needs to get it done,” the homeowner said.

The homeowner said he had wanted to hire some of his own tradesmen to

put in a hardwood floor but was told by employees of Christopher Homes

that he could not until he had the deed to the house.

Another St. Augustine homeowner, who was charged $5,000 for upgrades,

said the improvements offered by the developer were modest and couldn’t

have added up to $60,000.