Building Industry

Giant home builder Pulte Homes Inc. agreed Wednesday to buy rival Centex Corp. for $1.3 billion in a move that could spur more mergers in an industry decimated by the housing slump and the reeling overall economy. The stock transaction would make Pulte the biggest home builder in the country with a presence in more than half the states, including Dallas-based Centex's sizable land holdings in Texas and the Carolinas.

Pablo Nuñez, a carpenter by trade, says he is accustomed to working 10-hour shifts, sometimes six days a week, on home-building sites throughout Southern California. But legally mandated overtime pay was almost as unheard of at job sites, he says, as visits from labor inspectors. "The only person getting overtime might be the brother of the foreman," Nuñez said. The Corona resident is among 85 residential construction workers from California, Nevada and Arizona who will share $242,301 in unpaid wages after settling a federal lawsuit last month against a major home-builder, Boise, Idaho-based Building Materials Holding Corp.

The Los Angeles County district attorney's Public Integrity Unit is reviewing whether a high-level consultant for the Los Angeles Unified School District's building program engaged in a conflict of interest. David Demerjian, head of the unit, said Wednesday that his office has been looking at Bassam Raslan, a district regional director of construction and an owner of TBI Associates, which he co-founded to supply staff to the district's $20-billion school construction effort.

Confirming for many that the economy will get worse before it gets better, construction spending in January recorded its sharpest decline in 14 years while a closely watched indicator of manufacturing activity dropped last month to its lowest level in five years. The Commerce Department reported Monday that spending on residential and nonresidential construction projects declined 1.7% in January from December on a seasonally adjusted basis. Spending was down 3.3% from a year earlier.

As the housing slump worsened last fall, Don Dale struggled to find buyers for the $900,000 houses he was selling for Shea Homes in the hills of Aliso Viejo. Then in January, Shea slashed prices to about $750,000. Dale sold nine in one day. "If there is value, there are buyers," Dale said. Stuck with excess inventory, builders throughout California are beginning to offer steep discounts on new homes, sometimes at a loss. Centex Corp. is touting the "greatest prices in years" in its ads.

Home builder KB Home said Friday that it would stop building in Chicago, the mid-Atlantic region and Albuquerque, N.M., after finishing houses under construction in those regions. KB Home, based in Westwood, has five communities under development in Albuquerque, four in the Chicago area and five in the mid-Atlantic, which encompasses Virginia and Maryland, spokeswoman Lindsay Stephenson said. Homes under construction in those areas will be completed, she said.

Senate Democratic and Republican leaders reached agreement Wednesday on a multibillion-dollar package to address rampant foreclosures and other problems stemming from what may be the worst housing slump since the Great Depression. The compromise measure, placed on a fast track by the election-year desire to mollify voters, could be approved by the Senate as early as this week. It would be the first significant intervention by federal lawmakers to aid victims of the mortgage crisis.

Perini Corp.'s deal this week to acquire affiliated construction outfit Tutor-Saliba Corp. for $862 million in stock is winning kudos on Wall Street even as controversy continues to swirl around a high-profile Tutor project: the new Los Angeles police headquarters. Shares of Perini have climbed almost 5% since the construction company said Wednesday that it would acquire Sylmar-based Tutor. The stock rose 20 cents Friday to close at $40.06.

The "Stairway to Heaven" generation may soon have to make room for elevators. Builders are. And eventually, so too will baby boomers who decide to stay put in their homes. Retirees who choose new retirement and resort-style communities will increasingly find elevators (and walk-in showers) in the homes, as builders give buyers the square footage they want but with an eye toward long-term needs, said Dave Kosco of Bassenian Lagoni Architects.

In Beverly Hills, a 32,000-square-foot beaux-arts mansion that will be sheathed in Portuguese limestone and adorned with gold-plated doorknobs fashioned in France is rising on Sunset Boulevard. A few miles away in Bel-Air, businessman Eri Kroh has requested permits to lop off the top of a hill, fill in a canyon and then, after moving some 68,000 cubic yards of dirt, replace the chaparral-covered lot with a 30,000-plus square-foot single family home with Pacific Ocean views.