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A developer who for years has left a trail of complaints that have resulted in multiple suspensions and fines by the state contractor’s registration board, continues to do business in Rhode Island - even though he owes the state more than a quarter of a million dollars in personal income taxes.

Sathuan K. Sa, whose name is listed on a dozen corporations filed with the Rhode Island Secretary of State’s office, is 30th on the Division of Taxation’s list of 100 top delinquents. And he’s being accused of shoddy and substandard work by owners at two condominium projects he developed in Providence, four years apart.

 

Sa is appealing  an arbitration award of more than $800,000 in expenses and remedial work for his company’s 2019 renovation of a former parochial school into upscale condominiums on the East Side.

 

More recently, Sa’s conversion of an old factory into condos last year is under investigation by Providence’s Department of Inspections and Standards. The city signed off on the building in January but has received a barrage of complaints about inferior work, some of it done without permits.

 

A four-month investigation by The Hummel Report found those who have purchased units from Sa in both locations asking: where are the government agencies that are supposed to regulate his work? Especially when Sa has been on the radar screen of both city and state officials for years.

 

“There’s got to be some way to protect the consumer,” said Ara Millette, who bought one of two dozen units available last year at 50 Ashburton Street on the city’s north side. “Folks are making large investments, relying on the integrity of the city’s inspection and oversight process to ensure that we have a safe place to live.”

 

The majority of condos, in the former century-old National Casket Company building, are priced at more than $300,000.

 

Last year, a geyser of water bubbled up through a first floor pipe during heavy rains there, forcing residents to pay $12,000 in cleanup costs (the residents say Sa blames the city); one unit and most of the common areas had no heat much of the winter and multiple windows throughout the building are either cracked or don’t open. Rats ran freely through ground floor openings until they were closed off.

 

Judith Glynn, one of the first to buy a condo in 2019 at Chapel Hill East Condominiums  - the former Holy Name parochial school off Camp Street - wants to know why the city of Providence signed off on certificates of occupancy, when her building had to have a total rehabilitation of its HVAC system at a cost of $306,000 and $227,000 in roof damage. “The city approved our certificate of occupancy and the city said everything was built to code,” Glynn said. “And it’s not.”

 

Stephanie Isenberg,  another buyer who  has been pushing the city to take responsibility,  says the response from the mayor’s office has been: file a lawsuit against the developer.

 

“That’s all there is to say, file a lawsuit?” said Isenberg, who moved to Providence from New York City 17 years ago.  “We can’t afford another attorney. We didn’t expect to spend thousands of dollars once we moved in to redo what we thought we were buying: a newly rehabbed building that the city signed off on. We received a fraudulent certificate of occupancy.”

 

And they want to know how Sa is able to work as a developer with hefty back taxes.  While the Division of Taxation publicly names its 100 highest tax delinquents every year,  a spokesman said he is not allowed to talk about individual cases or what specifically the state is doing to recoup back taxes from an individual. And while the Rhode Island Contractors Registration and Licensing Board has 19 reasons spelled out in state law allowing it to suspend a registration, tax delinquency is not one of them.

 

Glynn, a native Rhode Islander who also owns property in New York City, was looking for an investment property five years ago after selling her three-family home in Fox Point that she had owned for 20 years, renting out two floors.

 

In early 2019, she was driving through the neighborhood where she grew up on Camp Street and noticed that the Catholic school  where she went to first grade  was being renovated into condominiums. Glynn contacted the real estate agent, Debbie Gold and got the process rolling.

 

But there were repeated construction delays, and Glynn became concerned because she was looking at a hard deadline from the IRS for a closing date - or face significant capital gains tax penalties.  A lawsuit she later filed against Gold and Sa spelled out her increasing exasperation as the original closing date of May 31 was pushed to Nov. 15, costing her $67,000 in taxes.

 

It’s a familiar story from the residents we spoke with at both Chapel Hill East and 50 Ashburton Street: Sa and Gold kept pushing back the date their units would be ready, costing them money or forcing them to find temporary housing. Many owners have never met Sa, their only contact has been with Gold.

 

After moving in toward the end of 2019, Glynn began to hear complaints from other unit owners. “It’s brand new construction, what could possibly be wrong?” she recalled thinking. “The apartment is beautiful.

 

“Somebody could smell somebody else’s bacon. Somebody turned their lights off and the fireplace went on. They couldn’t have possibly inspected anything.  It’s a lipstick-on-a-pig apartment,” Glynn said, adding that she didn’t have enough hot water to fill her bathtub.

 

Owners at both properties said Gold, when showing the condos, promised amenities that were never completed: at Chapel Hill East a training room and outdoor patio; at Ashburton, a training and a conference room.

 

The director of the city’s Department of Inspections and Standards under Mayor Jorge Elorza, Jeffrey Lykins, was fired in early 2020 after more than a decade in his position. The city announced it was launching an investigation into the process for issuing building permits.

 

Chapel Hill East hired experts to examine the HVAC system. Isenberg recalled speaking with the owner of one company who wouldn’t take the job.  “’We’re not going to touch your building,” she recalled him saying. ‘I’ve been in business for 45 years, this is one of the worst jobs I’ve ever seen. How did that developer get a permit from the city?’”

 

The HVAC expert cautioned against turning on the heat because of potential for carbon monoxide poisoning.

The residents paid for a 159-page report outlining all of the problems that needed remediation. It was the basis for an arbitration award last year by retired Supreme Court Chief Justice Frank J. Williams. Sa is appealing the award, saying in part that he was not properly notified of the proceedings.

 

At 50 Ashburton, Millette, whose mother has stage 4 cancer and also bought a unit there to be close to her daughter, wound up spending $12,000 for hotels because completion was delayed months. Millette says the city issued a temporary certificate of occupancy last fall because the elevator had not been installed. That, and other handicapped accessibility issues, made it impossible for her mother to move in.

Millette has since filed a complaint with the Civil Rights Division of the U.S Department of Justice because of the multiple handicapped accessibility problems.

 

In an interview with The Hummel Report, Gold, the real estate agent said: “What construction doesn’t have delays? Tell me any new construction that has been on time? Any new construction, anywhere, ever? You can’t make everybody happy 100 percent of the time.”

 

Gold has worked with Sa for 15 years. We asked her why, given the complaints about his work, legal issues, contractors registration suspensions and tax delinquency, she continues to partner with him. Gold responded, “I’m not aware of those things. It’s not my business.”

 

Sa, through his attorney, declined our request for an interview. One of his companies, Imperial Investments Inc., has a valid registration with the state, good until Aug. 1. But he’s had a string of violations dating back years.

 

Mark Bird and Shannon Scali both work in Boston - where housing is well out of their price range. They moved quickly when they saw the units at 50 Ashburton listed for sale last spring. Bird lives on the top floor, Scali on the ground floor.

Because of continued delays getting in, Bird had to pay twice to move (putting everything in storage) and paid extension fees to his mortgage companies. Neither knew at the time that the building was opened on a temporary certificate of occupancy. And only later did they find out that Sa did work after a permanent CO was issued without permits.

 

“My question for the city is: were things really inspected, because it looks like they weren’t,” said Bird, who leads Ashburton’s homeowners association board. “How can you open up a building when there is no handicapped access? It’s like they did no inspections at all.”

 

Scali said while the units present well, with crown molding, wainscoting and new appliances, problems began to crop up immediately. “Some units have had electrical problems. Washers and dryers shutting down automatically because they’re wired wrong.

 

Bird said 50 percent of the owners’ dishwashers are not working.

 

Millette said Sa has been somewhat responsive and is paying for remedial work - but so far not for the $11,700 in cleanup cost from the spewing pipe on the first floor.

 

So where is the city in all of this?

 

While Glynn, Isenberg, Bird and Millette have been vociferous in their complaints, they say other residents were hesitant to come forward, worried that the city would condemn their units because of the structural problems.

 

Last summer Glynn wrote a three-page letter to Mayor Brett Smiley, imploring him to give the residents of Chapel Hill East some financial relief - from a break in real estate taxes, to reimbursement of permitting fees paid for the remedial work done to the HVAC system. She asked for greater oversight and invited the mayor to come visit the project personally.

 

Isenberg hand-delivered the letter and a supporting packet of information to the mayor’s office. James Moore, who Smiley appointed director of the Division of Inspections and Standards,  met with Chapel Hill East residents and some contractors on the East Side last August.

 

He expressed sympathy and offered them his cell number. Then, Isenberg, said he went silent.

 

“My concern is whatever the deficiencies are and if you’re going to fix them we have to get a permit and get it done quickly,” Moore told The Hummel Report in an interview at City Hall earlier this month, adding that he needed to study what options he had available since he had moved here from the state of Washington.

 

“The owners need to use all of their resources, whatever avenue they choose, but the city was not in a position…they kept asking us to pay for (repairs) outright and  we don’t have a legal way of doing that,” Moore said.

 

Smiley, in a separate interview,  said that while he sympathizes with the owners, “The city does not have any sort of pre-allocated funds to provide relief for shoddy construction or abuse by developers or contractors. That’s not something that I have at my disposal.”

 

The Ashburton residents did not know about the trouble Chapel Hill East had with Sa until Millette in her online research came across a lawsuit Glynn had filed against Sa and Debbie Gold, the real estate agent, seeking damages for the delayed sale and tax penalty.

 

Millette said the city knew about Sa’s poor record and still approved certificates of occupancy at Ashburton last year.

 

Moore said the city sent multiple inspectors there last year: building, mechanical, fire and electrical, adding that all signed off on a certificate of occupancy. We asked him if Sa’s record of complaints and suspensions with the state factored into the scrutiny the city gave the Ashburton project. “I have a process, and it comes out of the book. And if I do more, is that government overreach?” Moore asked.

 

Moore said he has since learned that Sa did work after the certificate of occupancy was granted - and without permits - and the city is investigating.

 

Smiley added that residents also have the option of appealing their real estate assessments if they believe the property delivered was not what was advertised. Glynn said she believed the square footage sold by Sa and Gold may not be accurate.

 

As much as they would like monetary compensation, everyone we spoke with said they want a public hearing involving city officials to talk about how this happened and how to prevent it in the future.

 

Smiley said he was amenable to that, but with this cautionary note: “If there were to be pending legal action then it’s hard to have that conversation. I have to be careful not to impact what might be legal proceedings in a meeting where folks need to air their grievances, and I think rightfully would like to hear a response from the mayor.”

 

The Hummel Report is a 501(c)(3) nonprofit organization that relies, in part, on donations. For more information, go to HummelReport.org. Reach Jim at Jim@HummelReport.org.

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