Modular housing developer and manufacturer ZenniHome announced earlier this week it is closing operations at its LeChee site at the former Navajo Generating Station near Page.
The company had secured a 75-year lease slightly more than a year ago but opted to close the site after what it alleges was a year of “contractual breaches, delays and political interference” that resulted in more than $47M in losses the company says it cannot recover.
The Navajo Nation awarded ZenniHome a $50M contract to build at least 250 modular housing units across the area and then awarded another $24M in American Rescue Plan Act funds in 2024. The grants were announced last April.
However, a contract with the Navajo Nation was reduced by $22M earlier this month, prompting the closure. ZenniHome’s original plan was to build a factory on the site of the former power plant and build modular homes for use on the Navajo Nation, but operations proved rocky from the start.
More than 210 employees will be directly affected by the closure.
ZenniHome Founder and CEO Bob Worsley said the housing and construction plans were thwarted by “political infighting between the executive and legislative branches” of the Navajo Nation that led to the company being caught up in a back-and-forth set of different circumstances, as well as broken promises and “bureaucratic dysfunction that made it impossible to continue.”
The project would have netted ZenniHome more than $70M in grant money to build housing on the Navajo Nation, but the Navajo Nation Council‘s Budget and Finance Committee called for an investigation after rumors started that the company was going out of business.
The Committee had also gotten reports that contracts with ZenniHome and Indigenous Design Studio + Architects for procurement, payment and other issues might not have complied with Navajo Nation laws and policies. The Committee has scheduled a hearing for Aug. 21.
Navajo Nation Speaker Crystalyne Curley said the closure announcement adds to the questions and suspicions surrounding ZenniHome.
ZenniHome says it followed all required reviews for contracts and funding requests and complied with all regulations.
Challenges the company says it experienced included a delay of five months between the contract award and initial funding, which necessitated working without reimbursement; a worker turnover rate of more than 150%; inspection delays and competing vendor favoritism, and political interference that reduced the planned work order from 160 homes at $44M down to 80 homes for $22M.
That $22M lost and the cancellation of a $24M grant last year left the company no choice but to close LeChee operations, it said.
ZenniHome also said it offered to let the Navajo Nation take over operations, but that offer was refused.
Navajo President Buu Nygren, whose administration has been embroiled in internal strife with other leadership factions, said the Navajo Nation will evaluate the factory site and is working to identify a potential new tenant or other use for the facility that can bring back jobs. (Source)