Lyon’s Dealing With HUD on Ranch Project
I can understand the difficulties your reporters must have encountered in investigating the complexities involved in dealing with HUD transactions. However, it seems to me that the recent articles on General William Lyon are replete with unjustified and unfair conclusions, innuendoes and an overall bias against General Lyon and his companies.
After carefully reading the articles, I can find no compelling evidence that the William Lyon Co. was given a special deal by HUD at all.
The very fact that HUD gave a previous developer a $35-million loan guarantee (which was never paid by the developer, resulting in HUD having to foreclose) does not mean the property was worth $35 million. In fact, the act of foreclosure is a good indication that the property was not worth that much; if it were, the original developer probably could have obtained refinancing or sold the property to someone else. Further, new bidders could have bought the property at the foreclosure sale; one of those bidders could have been Times Mirror.
HUD claims that the government lost $10 million to $12 million on the foreclosure and subsequent sale to the Lyon Co. It is not explained exactly how the money was lost, but in any event, I don’t see how William Lyon can be blamed for any loss, real or imagined. If the property was worth $35 million, it seems reasonable that someone would have stepped up and paid that much. If, as the facts seem to suggest, it was not worth $35 million, then the $10 million to $12 million loss is purely fictitious, along with the $35-million valuation.
From the evidence presented in your articles, it appears to me that the Lyon Co.’s $16-million cash offer may have been the best deal that HUD could have obtained. As promised by the Lyon Co., the $16 million was paid, the homes were built and 1,054 families now have homes that did not previously exist and would not have been built if HUD had not accepted the offer from the Lyon Co.
If General Lyon’s company was the only one that came up with the idea of increasing the value of the property by increasing the density of its use, then I see nothing improper in awarding him the sale. If the other competitive bidders did not have the foresight, or were not willing to take a chance on getting an increase in zoning, then for them to complain at a later date merely smacks of sour grapes.
And what’s wrong with Mr. Lyon’s friends addressing him as “General Lyon”? It is not an honorary title; he earned it honestly and served on active duty in the U.S. Air Force, retiring with the rank of major general (two stars), not a brigadier general, as your article indicated. And one thing more: Is it possible that The Times is a bit resentful because the press was not invited to President Reagan’s Presidential Library fund-raiser held at General Lyon’s home in April of 1988? It is possible that you could have attended had you paid the $100,000 Presidential Library contribution that other attendees paid.
EARL F. RIPPEE
Newport Beach
