Australia’s Qintex to Sell 232 Acres in Dana Point Planned for a Resort : Real estate: Developers are said to be interested in the Monarch Beach property, bought for $131 million, and in the Headlands, another oceanfront parcel.
After insisting for months that it intended to build a plush resort in the Orange County beach town of Dana Point, an Australian company said Wednesday it will instead sell its 232 prime acres overlooking the ocean.
Qintex’s lenders have been trying to unload its Australian television stations and resorts to recover more than $1 billion in loans.
Stock analysts suggest the Dana Point land is so loaded with debt that the company won’t realize much--if any--profit from the sale. So selling it has been a low priority.
In fact, the land still isn’t officially on the market, said Kevin Wallace, a Qintex executive in Beverly Hills.
Other developers, including some Japanese interests, are said by brokers to be very interested in the Quintex property and a second oceanfront parcel in Dana Point that Qintex once had an option to buy.
But some experts say the market is weaker than it was last year, when Qintex bought the property.
Here’s why:
* Competition gets tougher as hotels proliferate along the Orange County coast, a trend fueled by the proximity of millions of customers in the Los Angeles metro area and a glut of resorts in Hawaii.
* Dana Point, which incorporated only last year, will likely be tougher on development than county government.
* It’s harder to borrow money given the turmoil in the lending industry and the junk bond market, so there aren’t as many buyers bidding up land prices.
* A developer might have to own both parcels to make the most money from them, since only one has access to a golf course, a necessity for a resort.
On the other hand, the parcels are among only a handful of prime oceanfront sites left so close to Los Angeles.
Qintex raised eyebrows when it bought the 232 acres at Monarch Beach for $131 million.
Stock analysts suggest Qintex borrowed at least that much. With accrued interest the company may need to get as much as $150 million to break even on land that sold for only $32 million two years earlier. Monarch Beach has a golf course.
The sellers, local developers Stein-Brief Group and Hawaiian mega-developer Christopher B. Hemmeter, had government approval to build a huge hotel patterned after Hearst Castle at San Simeon. Qintex contemplated a smaller, plusher hotel along the lines of the nearby Ritz-Carlton, an exclusive, luxury hotel.
Meanwhile, Qintex took an option to buy the other, 115-acre parcel in Dana Point called the Headlands for a stiff $120 million. It planned to build homes and perhaps another hotel there, which would have had access to the Qintex-owned golf course just up the coast at Monarch Beach. (There’s no room to build a course on the Headlands.)
But Qintex couldn’t make the payments and the option lapsed after Qintex spent $12 million. In fact, Qintex was beginning to unravel late last year when its bankers wouldn’t lend it the money for its biggest deal, the purchase of the MGM/UA film studios. Qintex went into receivership shortly afterward.
A spokesman for the Headlands’ owner, the Chandler family, said earlier that the family took the property off the market while it completes a market study.
Among the suitors for the Headlands are Stein-Brief, now flush with cash from selling the Monarch Beach property to Qintex for a spectacular profit. Stein-Brief is “interested,” said principal David Stein, though “not pursuing it aggressively.”
And Dana Point City Manager William O. Talley said executives of a Japanese company recently visited City Hall to ask about the zoning on the property.
The city of 28,000 is watching both parcels anxiously, since it has few industries other than tourism and hotels mean tax revenue.
But the Headlands is also the city’s most prominent geographical feature and developing it is likely to stir a fairly strong slow-growth sentiment.
Unlike Monarch Beach, the Headlands has no government approvals to build. Getting them could mean a yearslong, costly fight--possibly against stiff opposition--at City Hall and the Coastal Commission.
Qintex is one of several high-flying Australian companies shot down by heavy debt, ambitious expansions and high interest rates in Australia that are being broken up and sold.
“It’s a buyer’s market now,” said Edward Falkiner of the Australian stock brokerage Ord Minnett.
“There are cheap television stations, cheap breweries, cheap shopping centers.”
QINTEX IN DANA POINT
Qintex is planning to sell 232 acres in the Monarch Beach area of Dana Point, where the company had planned to build a resort hotel. Qintex also held an option to purchase the nearby Headlands, but the option lapsed late last year.
