Builder Faces Friday Deadline on Land Plan : Construction: An Encino developer’s partnership has filed for bankruptcy protection. The project involves 7,200 acres near Temecula.
An Encino home builder on Friday must present to a federal bankruptcy court in San Bernardino its plan for a large tract of land in southern Riverside County that is in Chapter 11 proceedings.
The builder, DeVere Anderson Enterprises, is the general partner of Vail Lake/D.A.E. Partners, which purchased the 7,200 acres near Temecula in 1989 with the intention of building an 8,000-home development on the raw land surrounding a 700-acre natural lake about 10 miles east of Interstate 15. But the land remains undeveloped, and DeVere Anderson placed the partnership in Chapter 11 bankruptcy in October after its partner and the holder of the second trust deed on the property, Shea Homes of Walnut, moved to foreclose on the property.
(In Chapter 11, a debtor is given protection by the court from its creditors while it formulates a plan to pay its bills.)
The Vail Lake bankruptcy lists total debts of $42.5 million and property with a total market value of $70 million. DeVere Anderson is the largest unsecured creditor, with $2.5 million in general partner contributions, the bankruptcy papers say.
Officials of DeVere Anderson and Shea Homes did not return phone calls seeking comment.
According to state records, DeVere Anderson Enterprises was incorporated in 1985. The company’s founder, DeVere Anderson, was named the Los Angeles region Builder of the Year in 1984 by the Building Industry Assn. of Southern California, a trade group.
DeVere Anderson’s other developments include the 1,900-unit Butterfield Ranch in Chino Hills, a master-planned community with single-family houses, condominiums and apartments.
Shea Homes is listed in the Vail Lake bankruptcy papers as one of two secured creditors, with a debt owed of $13.1 million. The other secured creditor is the former owner of the Vail Lake land, Bedford Properties of Lafayette, which is owed $26.8 million.
The documents also state that the partnership paid Shea Homes about $1.9 million last June to reimburse Shea for “advances made.”
Bedford sold the Vail Lake property to the partnership in September, 1989, and the $26.8 million is the amount that it is owed on a note. Dennis Klimmek, Bedford’s general counsel, said a $1.5-million payment is now delinquent on the note.
Klimmek said DeVere Anderson has exclusive rights to file a plan for the property with the bankruptcy court. But the builder has filed a motion with the court to extend the rights beyond the Friday deadline, he said.
The court could decide that the property must be sold to pay the debt. But the housing market in southern Riverside County, a fast growing area for the past several years, has slowed recently, and the area has a large supply of new homes that remain unsold, said Buck Panchal, a consultant with the Meyers Group in Corona, a real estate consulting firm that did market research on the Vail Lake property.
A sale of the land might also be difficult, Klimmek said, because “it’s a big property and expensive property, which makes it harder to sell.”
The rugged, hilly Vail Lake area includes about 500 acres of environmentally sensitive wetlands and is the home to several endangered plants and animals. Under state and federal environmental laws, a developer who builds on the land would have to provide for the wetlands habitat to be recreated elsewhere--a very expensive proposition, said Dennis Majors, manager of reservoir planning for the Metropolitan Water District of Southern California.
The MWD has targeted the Vail Lake land as one of three properties under consideration for use as a water storage area. The final proposed site is expected to be announced in July. If Vail Lake is chosen after a period for public comment, Majors said, the MWD would purchase the land from the partnership for a value determined by an independent appraiser. If necessary, he said, the agency could use its power of eminent domain to condemn the property and force a sale.
The lake is owned by the Rancho California Water District.
