NEWS

Revoked Paddock Pools faces consumer complaints, tax penalties

Paul Giblin
The Republic | azcentral.com
Blue ripped water in swimming pool
  • Scottsdale revoked Paddock Pools’ business license and cited owners for operating without a license
  • Paddock once ranked as nation’s third largest pool builder by industry publication
  • Former president Lewis “Buzz” Ghiz says the pool-construction sector is rebounding after recession

The public collapse of Scottsdale-based Paddock Pools in recent weeks marks the downfall of one of the nation’s oldest and largest pool-construction companies.

The company’s business license has been revoked, three contracting licenses held by Paddock and its affiliated companies have been revoked and it has seen at least $1.4 million  in judgments and liens recorded against it since 2013, according to public records.

Yet the doors at Paddock’s Scottsdale showroom were unlocked Thursday and a sign inviting visitors read “Open.” A sales clerk who declined to provide her name said employees were providing goods and equipment to customers who previously made purchases, but were not conducting new business.

The clerk said chief financial officer Carole Myers was in the building, but was not granting interviews. Numerous phone messages left by The Arizona Republic have gone unanswered.

The Arizona Registrar of Contractors revoked three contracting licenses held by Paddock and related companies on July 16 after reviewing dozens of cases of abandoned pool-construction projects.

RELATED: State revokes contracting license of Paddock, Cameo pools

Paddock is the centerpiece of NexGen Pools & Spas, a pool company that also owns Camelback Pools, RIG Construction, Cameo Pools and other enterprises.

Consumers across the Valley complained that the companies abandoned partially built pools, leaving backyards with holes, exposed rebar and plumbing systems.

The state regulatory agency as of Monday had completed 12 investigations, spokesman Jim Knupp said. Sixty additional investigations are ongoing.

Scottsdale revoked the company’s municipal business license on June 1, city spokesman Mike Phillips said. Documents obtained through a public-records request showed that the company owed the city more than $12,000 in taxes and penalties as of April 13.

Since June, Scottsdale police have repeatedly warned Myers to stop conducting business without a license at the company’s showroom, 8718 E. Shea Blvd., police spokesman Sgt. Ben Hoster said.

An officer visited the business again July 9, Hoster said.

“(He) spoke to Carole in person, let her know that they were still in revocation and they were not to be working. He said the next time he comes, he’s going to be issuing her a citation,” Hoster said.

An employee told the officer that company executives were trying to open other businesses under different names to complete the outstanding work, Hoster said.

Police returned on July 15, found that business was still being conducted, and issued a citation, he said.

Court records and other public documents show judgments and leans piling up against Paddock and its affiliated companies since at least 2013, a year before NexGen purchased Camelback, which does business as Paddock.

For example, Phoenix filed for more than $120,000 in tax liens against NexGen, doing business as ABC Spas of AZ, in May. In addition, the city filed more than $1,000 in tax liens against Camelback, doing business as Blue Haven Pools, in March.

The state recorded more than $386,000 in tax liens against Camelback, and more than $92,000 in tax liens against RIG, doing business as Cameo, both in June.

Various judgments and liens also involve the cities of Chandler, Mesa, Tempe and several corporations.

Lewis “Buzz” Ghiz, a son of Paddock’s founder, said his family has not been affiliated with the company or its owners for a decade. He declined to comment about the current state of the company.

But Ghiz said the overall pool-construction sector is still rebounding after several slow years during the economic downturn.

“It’s finding its way back like a lot of industries are finding their way back. In Arizona, having a pool — I’m not going to say it’s a necessity — but it’s important to have,” said Ghiz, now owner and president of Paramount Pool & Spa Systems, a Chandler-based manufacturer and distributor of pool parts and equipment.

“It’s energized and people are out buying pools and remodeling them and investing in their backyards again, definitely. We’re excited about the future of the pool industry.”

Ghiz’s father, George, launched Paddock in Arizona in 1958. He built one of the industry’s first pool-display centers, a 10-acre spread with eight pools and five spas, where consumers could inspect and select styles and materials.

George Ghiz died in 1988, and the company continued under the leadership of his sons. Lewis served as president and David as senior vice president of retail, while Edward oversaw construction.

By 2004, the company aligned with homebuilders and dug approximately 2,500 pools a year in metro Phoenix and Las Vagas, according to the trade publication Pool & Spa News.

Pool & Spa News ranked Paddock among the top 10 builders in the country for nine years, peaking at No. 3 in 2003 and 2004. The publication dropped Paddock from its list in 2012.

The Ghiz family sold Paddock in 2005. The current owner, NexGen Pools & Spas, acquired Paddock in May 2014 and kept the name, according to a press release issued by NexGen.