Japanese to Buy Big Coastal Tract Along Dana Point
A major Japanese financial concern said Friday that it has agreed to acquire a 231-acre swath of seaside land known as Monarch Beach for more than $100 million from Qintex, the troubled Australian entertainment and resort company.
Tokyo-based Nippon Shinpan Co. Ltd., which owns Japan’s largest credit card company, said it plans to invest more than $300 million to develop the property, which is one of the last large undeveloped coastal properties in Southern California, across Coast Highway from the Ritz-Carlton hotel.
The announcement here of the proposed sale came two days after the Monarch Beach property was scheduled for public auction. The forced sale was postponed, however, to allow further talks between Qintex and its creditors.
Nippon Shinpan plans to build a 300-room hotel and a 100-room hotel on the property. It also plans to enlarge and redesign the Links at Monarch Beach public golf course to turn it into a course of “world championship” caliber, said Robert Rockefeller, vice president of Monarch Bay Resort Inc., a Dana Point development subsidiary formed by the Japanese company.
Rockefeller said Qintex’s Laguna Niguel subsidiary, the former owner of the property, will be involved in the future development of the property.
Qintex, which bought the property in July, 1989, for $131 million, had planned to build a plush resort there. Some real estate observers have speculated that Qintex overpaid for the property.
By late 1989, Qintex was in serious financial trouble and was placed into receivership in Australia. Its lenders put its Australian TV stations and resorts up for sale in a bid to recover more than $1 billion in loans. In March, Qintex put the Monarch Beach property on the sales block.
The Monarch Beach sale marks the second major resort acquired by Japanese interests in Dana Point. In July, 1989, Tokyo Masuiwaya California Corp., a unit of a giant Japanese apparel company, bought the Dana Point Resort, a 12-acre property overlooking Dana Point Harbor, for $104 million.
Nippon Shinpan is part of a group of Qintex creditors that includes Japanese and Australian banks that lent Qintex money to buy the land.
Nippon Shinpan’s acquisition price of more than $100 million includes the payment of about $60 million of debt owed to the Balcor Co., the property’s first mortgage holder. The rest will be paid to “associated interests,” Rockefeller said. He declined to elaborate.
Nippon Shinpan also plans to develop “premium-quality” single-family homes and attached single-family homes, he said.
It will also construct a park, to be called Sea Terrace Park, next to the development, he said.
The Japanese company also plans to build a public beach house and restaurant fronting the Monarch Beach Resort, Rockefeller said, adding that it will also extend the public access system to connect the two hotels to the parking lots and trail systems at the county’s Salt Creek Beach Park.
“This development is far superior than previous proposals for the property,” Rockefeller said.
Designs for the project will be submitted in three months, so construction should start in late 1991, if the company gains city approval, he said.
Nippon Shinpan is Japan’s largest consumer finance concern. The company invented the first-generation credit card in Japan, which was actually a paper coupon.
Nippon Shinpan is no newcomer to resort development. It owns the Princeville Hotel on the island of Kauai, Hawaii, and two other hotels in Queensland, Australia.
Nippon Shinpan also jointly operates with Citicorp several financial concerns in Tokyo under the name First National-Nippon Shinpan, plus International Factoring with Bank of America.
Yasuda Trust & Banking Co. Ltd., a large Tokyo-based bank with offices in Los Angeles, will provide some financing for the deal, a source familiar with the transaction said.
Qintex bought the Monarch Beach land from developers Stein-Brief Group and Hemmeter Corp. and at the same time bought an option to buy a nearby bluff-top property, the Dana Point Headlands. Qintex never exercised that option.
Stein-Brief group was the first to propose a destination resort on the site, at an estimated cost of $275 million in 1987. The group had owned the Monarch Beach property since 1984, when the land was considered part of the Laguna Niguel planned community.
The land became part of Dana Point in October, 1988, when Orange County’s Local Agency Formation Commission, acting after a disputed preference vote in the area, assigned Monarch Beach within the proposed boundaries of what would become the city of Dana Point three months later. The Laguna Niguel Community Services District filed lawsuits, which are pending.
When Laguna Niguel became incorporated in November, 1990, city officials vowed again to fight for control of Monarch Beach. At the least, local organizations have pushed to require any developer of the land to finance $2.6 million in park improvements in Laguna Niguel, because the city lost public park space when Monarch Beach became part of Dana Point.
The Monarch Beach property had previously received government permits to build a hotel of up to 800 rooms, plus a smaller hotel.
Development of the property, which was worked out jointly between Nippon Shinpan and Qintex’s Laguna Niguel unit during the last five months, will be carried out by Australian and U.S. concerns, Rockefeller said.
Nippon Shinpan has offered jobs to all 120 employees of the Monarch Beach Resort Club and those managing the property, he said.
