SAN BERNARDINO - The city's oldest and perhaps largest real estate firm has laid off two-thirds of its employees and closed its sales division.

The elimination of 10 of 15 employees - already down from 26 a year ago - is a sign of a sluggish real estate market, but not of financial problems or decreased sales for the firm, according to owner Darryl Spellacy.

"We're still selling as many properties as we were before we downsized, which is more than anyone else in San Bernardino," Spellacy said. "It sounds like a lot of people, but these were individual contractors who didn't get paid unless they made a sale."

Title companies contacted to confirm those sales figures said reports would be inconclusive since a real estate firm could process its sales through any number of companies, but also said Spellacy & Associates remained a major player in December.

Although the laid-off workers were paid on commission, Spellacy said he's saving a significant amount of money on overhead - office costs, insurance and management time, for instance.

Spellacy declined to give specific sales or financial information.

A more aggressive approach is needed than when the market was stronger and most of his workers were hired, Spellacy said.

"They're used to the old market where they can sit by the phone and wait for a transaction," he said, adding that he didn't mean to criticize any of his former employees.

The firm opened 35 years ago. The sales division, which now is consolidated with the rest of the company, had been headed for the past three years by Nancy Petrone, Spellacy said.

Petrone stopped returning phone calls after a brief conversation in December, in which she disputed Spellacy's description of the restructuring as respectful.

"We're still in negotiation with the attorneys," she said. "It hasn't been very amicable at all."

The closure of "Real Estate by Spellacy and Associates" - the firm jointly owned by Spellacy and Petrone - was announced to "the Spellacy family" by letter in November.

It was based on sales figures for the third quarter, Spellacy said.


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