Monarch Beach Buyer to Take Developer Role : Real estate: The firm’s plans for its Dana Point land puts it in a new league of Japanese companies doing more than merely buying U.S. property.

With the acquisition of the 232-acre Monarch Beach here, Nippon Shinpan Co. finds itself on the leading edge of what some real estate experts say is a new trend: Japanese companies developing--rather than merely buying--U.S. real estate projects.

Japan’s largest credit card company didn’t set out to be on the cutting edge. Building a resort here was originally the job of Qintex, an Australian company which got itself overextended last year and wound up tumbling into receivership and bankruptcy.

That left Nippon Shinpan, one of Qintex’s bigger creditors, with the choice of finding a buyer or taking over the property itself. Given the high price Qintex paid--and the slump in real estate markets worldwide--finding a new buyer would be tough.

“In the current distressed market, I don’t think a purchaser could be found at this moment who was willing to pay the debt on the property,” said Masao (Mike) Soto, Nippon Shinpan’s general manager for overseas projects, in an interview Tuesday.

So the company wound up buying the property last week. While Nippon Shinpan insists that it hasn’t been left holding the bag, it could have picked an easier project with which to get its feet wet.

Its first job will be to convince the city of Dana Point that the city should scrap the old plans for a resort development and OK a much different and smaller plan. And Nippon Shinpan is racing the clock. The city wants to lock in a plan for the land--one of the last large undeveloped parcels on the Southern California coast--by spring.

Nippon Shinpan has about $150 million invested in the Monarch Beach property, counting what the company had already sunk into the deal and what is still owed the other lenders.

The company said Friday that it was acquiring the land by repaying more than $60 million that Chicago real estate investor Balcor Co. had loaned Qintex to buy the land. Balcor had a first mortgage on the property.

Nippon Shinpan and a group of Australian and Japanese banks lent Qintex the rest of the $132-million purchase price and held a second mortgage on the property. It was understood that Nippon Shinpan would eventually convert its loan to a share of the ownership.

The buyout by Nippon Shinpan took five months to negotiate, said a participant, and nearly came unglued last week when some of the creditors nearly forced a foreclosure sale on the property.

The upshot is that now Nippon Shinpan is in the development business in the United States directly rather than just as an investor. The company will, however, use the 100 or so Qintex employees working on the project to help get the resort built.

“Japanese companies have funded lots of development outside their own country, but actually developing their own projects is unusual,” said Stephen J. Duffy, a real estate consultant at the accounting firm Kenneth Leventhal & Co.

“However, it’s not surprising. I think the 1990s will see these companies take a much more active role in development,” he said.

Japanese real estate investors like buying resorts because they can count on a large clientele from their own country, Duffy said, adding that demand for leisure time activity in Japan is growing.

While Japanese investment in U.S. real estate is cooling off, some companies are trying their hands at building their own project. Mitsui Fudosan U.S.A. Inc., for instance, decided to build its own skyscraper in Los Angeles a few years ago. More recently Japanese home builders have been taking another look at the U.S. market.

Nippon Shinpan, in fact, has been building condominiums in Japan for at least 30 years. It once tried its hand at building units in Hawaii, though the project coincided with the economic downturn of 1973. Nippon Shinpan retreated back to Japan and hasn’t attempted to develop real estate outside that country until now.

The resort business isn’t entirely new to the company, either. It has built several resorts in Japan.

Nippon Shinpan has been known mostly in the United States as a part owner--with the giant Japanese trading concern Mitsui & Co.--of Qintex’s other resorts. Each bought a quarter interest in Qintex’s Mirage Princeville resort in Hawaii and two Mirage resorts in Australia for a total of $350 million after Qintex hit a cash crunch last year.

This year, with much of Qintex in receivership, Nippon Shinpan bought out Qintex’s remaining 50% in the Hawaiian resort and resold part of it to Japanese whiskey and restaurant company Suntory.

Nippon Shinpan said it is also negotiating with Qintex’s Australian receivers to buy Qintex’s half-interest in its two Australian resorts.

But in the United States, building may turn out to be tougher than investing. Dana Point wants a maximum return on this project in terms of sales tax receipts. It would also like a minimum of fuss and bother from the new traffic a resort would generate.

The old owners had won permission to build more than 1,100 rooms after several years of negotiating with the county, the city and the state Coastal Commission. Eight hundred or so of those rooms were in one behemoth hotel designed to look like the Hearst Castle in San Simeon.

But when Qintex bought--some say overpaid for--the property last year, it began sending signals that it wanted to change the plan.

For one thing, said Robert Rockefeller, who worked for Qintex and now is a vice president in charge of development for Nippon Shinpan, an 800-room hotel is just too big and expensive to make much money on. It might be a different question in Hawaii, where tourist season doesn’t end once winter rolls around, or even in Newport Beach, where business travelers keep the hotels moderately busy.

But in Dana Point it would be tougher to make it work. Qintex, in fact, couldn’t get anybody to lend it the money to build the project. Rockefeller said Nippon Shinpan would rather build a smaller hotel with rooms expensive enough to generate as much revenue as the bigger hotel. It also wants to add expensive homes and townhouses to the property.

That, however, raises the traffic question. The city believes that hotels generate less traffic than a good-size subdivision. But that’s not true, Rockefeller said.

Soto said the company is thinking about building in the range of 240 new homes and, like Rockefeller, said they would generate less traffic than the big hotel.

How that argument goes over with the well-organized, affluent residents of the million-dollar beachfront houses in Monarch Beach across Coast Highway from the resort remains to be seen.

“We’re keeping an open mind,” said Eileen Krause, a City Council member and former mayor. “But when somebody tells you they’re going to decrease density, increase tax revenues and reduce traffic, you tend to approach them a little skeptically.”

Yet that’s just what Nippon Shinpan intends to do, Rockefeller said.

“We’re talking about something of the quality of a Pebble Beach,” he said. “We just need to convince the city of that.”