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A developer’s downfall

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Work underway in 2014 at the Stemilt Growers administration building in Olds Station. The original contractor on the 45,000-square-foot project, Blodgett Construction Associates of Malaga, was sued by Stemilt and declared bankruptcy after owner Ken Blodgett could not afford to pay his subcontractors.

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WENATCHEE — When Ken Blodgett told Stemilt Growers his once-prosperous construction firm could no longer pay its bills, his own project manager walked out of the room in shock.

What followed was a lawsuit by Stemilt, which alleged fraud in the nearly $10 million deal with Blodgett to build the tree-fruit giant’s new Olds Station administrative complex.

Stemilt was ultimately forced to pay $1.5 million to subcontractors hired but never paid by Blodgett — and Blodgett, an early developer of the Town Toyota Center who positioned himself as a player in Wenatchee’s riverfront real estate market, declared Chapter 7 bankruptcy in November, with combined personal and corporate debts exceeding $6 million.

Blodgett, 75, declined a request for an interview made through his Seattle bankruptcy attorney. Stemilt marketing director Roger Pepperl said the fruit company would not comment on the matter.

We’ll defer to the public record,” Pepperl said.

That public record, laid out in U.S. Bankruptcy Court in Spokane, is voluminous. Blodgett’s declared debt includes the $2.5 million legal claim by Stemilt, overdue personal income tax of $163,000 and another $800,000 in loans and credit.

The builder’s financial collapse apparently marks the end of Construction Service Associates, Blodgett Construction Associates, Blodgett Properties LLC and other firms he owns. Phones have been disconnected, website URLs vacated, business licenses allowed to lapse. About $240,000 worth of company equipment was auctioned in January. Blodgett and his wife Sharon, 76, contracted to sell a winter home in Phoenix.

Under a settlement with Stemilt reached in mediation last October, Blodgett would also surrender one of his Wenatchee-area homes to be sold by a trustee. A bankruptcy court judge has yet to finalize that agreement.

Blodgett Construction Associates undertook work on the Stemilt administrative complex in 2012. Over the next two years, the fruit company paid about $9.9 million for work performed under the contract.

But 40 subcontractors went unpaid, according to court records, and in May 2014 Blodgett told Stemilt project manager Jay Fulbright that he couldn’t raise the $1.2 million he owed them.

Blodgett “further stated that he did not know if BCA would meet its own payroll or even stay in business,” Fulbright said in a court declaration.

John Berry, the project manager who’d steered the massive undertaking on Blodgett’s behalf, “was shocked and excused himself from the meeting,” according to Stemilt’s court filings. Berry did not return a call seeking comment Thursday.

Stemilt first sued in Chelan County Superior Court in 2015, accusing Blodgett and his companies of fraud, breach of contract and other wrongdoing. When Blodgett’s web of companies filed for corporate bankruptcy last June, Stemilt pursued its claim in bankruptcy court.

Blodgett, an Oregon native, entered the construction business in 1959 and moved to Wenatchee in 1993. He launched Blodgett Construction two years later, specializing in commercial space, and set up headquarters in Malaga.

Blodgett was the original owner of the land where the Town Toyota Center now sits, and in 2006 was slated to construct the $53 million publicly-funded sports and entertainment arena. But the following year he told the city of Wenatchee he couldn’t secure needed financing, and left the project.

Blodgett transferred the arena land in a deal with developer Global Entertainment, but planned to build complementary mixed-use developments on Piere Street property he owned nearby. That never came to fruition, and in 2008 Blodgett put his 4.7 acres on Piere Street up for sale, saying he was looking toward retirement.

The economic crisis struck that year, freezing up investment in the Wenatchee waterfront. Blodgett’s firms were subsequently involved in projects including the East Wenatchee Walgreens store and the renovation of Morse Steel into Pybus Public Market.

Last year, the Blodgetts sold 2-1/2 acres of Piere Street property for $2.1 million. A trustee in the bankruptcy case sought an injunction, saying the Blodgetts had contrived to keep $300,000 in sale proceeds rather than use them to discharge debts.

Reach Jefferson Robbins at 509-664-7123 or . Follow him on Twitter at @JRobbinsWW. Contact him securely by PGP key.