Accord Signed for $80-Million L.A. Community : Silvercrest Says Housing Development Back on Track

Silvercrest Industries in Santa Ana said Wednesday that its development of an $80-million manufactured housing development in Los Angeles is back on track.

Silvercrest has signed a joint venture agreement with Watt Industries to develop a 385-acre, 800-unit community in the San Fernando Valley that will be the largest manufactured housing development in the city, Silvercrest President Richard Simonian said.

In February, 1987, Silvercrest signed with Los Angeles home builder Kaufman & Broad to jointly develop the subdivision.

Suit Filed

That partnership came to a contentious close in January when Kaufman & Broad filed suit against Silvercrest in Superior Court in Los Angeles, alleging that Silvercrest had defrauded Kaufman & Broad to obtain its participation in the project.

Simonian said the court denied Kaufman & Broad’s request to bar Silvercrest from selling property in the subdivision until Kaufman & Broad receives what it says it is owed.

“They’re continuing with the suit, but we have permission to proceed with development, and we’re selling homes,” Simonian said. Kaufman & Broad declined to discuss the case or the new joint venture.

Watt, a privately held real estate development firm in Santa Monica, is to provide $4 million in financing, plus marketing assistance for the project, Simonian said.

Silvercrest will manufacture all the homes for the subdivision, and a Silvercrest subsidiary will be managing partner for the project.

Units Sold

So far, several units have been sold, including five last weekend, Simonian said. He said he expects 42 units to be sold for $100,000 each during his company’s fiscal 1988, which ends June 30. Simonian said the entire development is expected to be sold within three years.

Watt and Silvercrest also teamed up last fall to develop what the companies said will be the largest manufactured housing development in Orange County on what is currently a 100-acre sand and gravel pit in Orange.

The companies said that they paid $12 million for the property and that the land is being developed to hold 600 homes.

For the Los Angeles development, Watt Industries will not be as significant a player as Kaufman & Broad was expected to be.

Kaufman & Broad was expected to manufacture half the homes for the development, and the firm also was to be the managing partner, in addition to providing financial assistance.

In its suit, Kaufman & Broad asked for repayment of $2.9 million it said it had loaned Silvercrest or spent on improving and promoting the subdivision.

Silvercrest said it had already offered to reimburse Kaufman & Broad for any expenses it could document, but Simonian said the rest of the complaint “is completely without merit.”