When a Mega-Mansion Runs Over Budget

The 35,500-square-foot home of Ziad Ghandour was supposed to cost $13 million and take two years to complete. Instead, the bill came to $20 million and the project took five years.

When Ziad Ghandour was planning to build a dream house for his family in Los Angeles he decided to go big — really big. At 35,500 square feet, the home would be one of the largest in a city filled with large homes.

Now, nearly a decade and $20 million later, Mr. Ghandour said his dream house has turned out to be a nightmare.

Construction began in 2012 and was supposed to take two years to complete. Mr. Ghandour said it ended up taking nearly five, and the original cost of $13 million grew by an additional $7 million. Fixing the remaining structural and cosmetic problems, he said, could run in the millions on top of that. “The meter is still running.”

The tale of Mr. Ghandour’s home illustrates how typical problems with contractors — missed deadlines and cost overruns — are not limited to those with small projects or tight budgets. Finding a contractor with appropriate expertise is a universal problem for home projects of all sizes, although Mr. Ghandour admits that he may have erred when he decided to use a commercial builder without experience in high-end custom homebuilding.

Around 2016, as the home was nearing completion, Mr. Ghandour said he started to realize that in addition to numerous delays and a blown budget, “you could tell this would be a botched job.” He said problems ranged from the home’s appearance to water leaks and basic structural concerns. Still, he and his family moved into the home in early 2017.

And that’s when even more problems became apparent, Mr. Ghandour said. During the Bel Air fires last fall, he said soot seeped through various cracks, making the indoor air quality so bad that he, his wife and three children had to decamp to a hotel for several days, even though the house wasn’t in a mandatory evacuation zone.

Mr. Ghandour said he had paid a premium to have a near hospital-grade HEPA air-filtration system installed since his 13-year-old daughter was born with special needs that include respiratory problems. The system was supposed to keep unfiltered outside air from entering the home.

More frequently, whenever it rains, Mr. Ghandour said there are several rooms that have water leaks, including an HVAC room with sensitive electronic equipment. The house, which is divided into three separate structures, includes a building that was designed to hold a sauna, steam room and showers. Mr. Ghandour said the leaking is so bad in that building that it sits unfinished and entirely empty.

Back in 2009, when planning for the project began, Mr. Ghandour, the founder of a Los Angeles-based venture capital firm, said he interviewed four contractors and ultimately decided to take the unusual step of hiring a commercial builder after being approached by a well-known company. He said they sold him on the idea that they would be perfect for the job because a home as large as his wouldn’t be like building a typical single-family house. So why hire a typical homebuilder? Plus, the exterior his architect designed would have more in common with an office building or commercial space.

The company he hired was Lendlease, best known for its construction work on high-profile projects like the National September 11 Memorial & Museum at the World Trade Center, the Sydney Opera House in Australia and the Petronas Twin Towers skyscrapers in Malaysia. “Lendlease sold me on that they’d be able to translate that experience into high-end homes,” Mr. Ghandour said.

Though representatives of Lendlease told him they hadn’t yet built any comparable luxury homes, Mr. Ghandour said he was assured that his project would get special attention because it would be their first. “They said, ‘We’ll start a new line of business and this will be the showcase, the showpiece,’” he said.

Lendlease declined to comment on Mr. Ghandour’s characterization of its proposal or confirm whether the company had previously built any luxury homes of that scale. A spokeswoman said the company has built more than 400 residential projects, mostly in military master-planned sustainable communities for the Department of Defense.

Mr. Ghandour said he pleaded with Lendlease to get its subcontractors to fix various problems along the way. At one point, he said, Lendlease stopped responding, so he hired a high-profile construction lawyer, Robert Mann, to pursue a legal claim against Lendlease in 2016. He wants the company to pay for the necessary repairs he has made, plus other damage he still needs to fix. “What I was hoping for them from the beginning was that they’d just do a good job,” Mr. Ghandour said. “And if they didn’t do that, then they’d fix whatever wasn’t done right.”

Representatives from Lendlease said they were unable to comment on any of Mr. Ghandour’s claims because the case is now in binding arbitration. “We disagree with Mr. Ghandour’s claims and regret that the matter has gone this far without resolution,” the company said in a statement.

Mr. Ghandour said the company did attempt to fix some issues, to no avail. An exterior stucco wall, for example, was meant to look smooth but instead has the look of crumpled paper that has been somewhat flattened. Mr. Ghandour said Lendlease’s subcontractor unsuccessfully attempted to fix it four times.

Other areas of the house could be even harder to repair. A large room at the top of the stairs was framed crookedly, six inches out of square, said Mr. Mann, the lawyer. Mr. Ghandour said he didn’t notice the error until the room’s hardwood floors had been laid down and there was a gap that required an awkward triangular piece to fill.

Now “it basically can’t be fixed” without reframing the building, Mr. Mann said. He also said the home’s drywall was of a low-quality finish more commonly found in tract homes or lower-end commercial buildings. Replacing it would be extremely costly and would likely require Mr. Ghandour and his family to move out for several months.

Mr. Ghandour said the toll on his family life has been “devastating.” During construction, he moved his family four times, signing short-term leases after receiving assurances that he would be able to move into his home soon. By the time the property was cleared for occupancy, his oldest daughter had gone away to college. He said the stress of the project also took a toll on his marriage. “We’re still patching it back together,” he said.

Jason Kellogg, a South Florida-based construction litigation lawyer who isn’t involved in Mr. Ghandour’s case, said the recent boom in mega-mansion building has prompted a growing number of inexperienced builders to try to get into the business.

Though very large homes are in some ways similar to commercial structures, he said, mega-mansions are still best handled by contractors who have experience building large residences. Because “once problems start,” he said, “they become immensely costly.”

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