Group in Default on Loan for Laguna Niguel Project
Less than 2 1/2 years after consummating one of the largest-ever real estate deals in Orange County, a development firm is in default on a $49-million loan, according to the leading lender on the firm’s huge Laguna Niguel coastal development.
Notices of default were recorded April 17 by San Diego-based Avco Community Developers against the Stein-Brief Group, a development partnership of David Stein, the flamboyant Democratic activist, and Orange County builder Barry Brief.
Avco President Paul Zimmer said Tuesday that the Stein-Brief Group failed to make a $4.3-million payment due on the note in December. He said the partnership still owes $49 million on the loan.
Zimmer said that Avco, after waiting several months for Stein-Brief to come up with the $4.3-million delinquent payment, decided to take the first legal step last week toward foreclosing on the approximately 400 acres of property remaining from the 1983 transaction that has not yet been developed or sold off to other builders.
Neither Stein nor Brief could be reached for comment Tuesday. But Chris Downey, Stein-Brief’s executive administrator, said he knew of the default notices. He said Stein-Brief is trying to restructure its loan agreements with its lenders, which, in addition to Avco, include Mission Viejo-based Beverly Hills Savings & Loan Assn. and Western Savings & Loan Assn. of Salt Lake City.
“It is our understanding that it (the notice of default) will not impact Stein-Brief’s day-to-day operations,” Downey said.
Avco sold 550 prime acres in September, 1983, to Stein-Brief for about $80 million, paid in part by a $58-million note taken back by Avco.
The following January, Stein-Brief unveiled its plans for a $1-billion “Monarch Beach” development by hosting a party on a 100-foot yacht anchored offshore Laguna Niguel. The plans called for a Mediterranean-style, guarded gate community of 3,400 homes where lots alone would sell for $200,000 to $1.8 million.
Center stage for the resort-like community is the 2-year-old Ritz Carlton hotel, near which the developer has built an 18-hole golf course and plans to put another hotel, conference center and health spa.
