J.M. Peters Resumes Building Homes, Thanks to $23.6-Million Investment : Finance: Design work starts on three South County projects after an unnamed pension fund puts up the money.
After nearly a year of virtual inactivity as the federal Resolution Trust Corp. choked off its financing while trying to sell it, the newly reorganized J.M. Peters Co. has obtained a $23.6-million investment that has put the home builder back to work.
The financing, provided by a major pension fund whose identity was not disclosed, lets Peters Co. begin work on 335 homes in four South County projects. Grubb & Ellis Co.’s Newport Beach office arranged the funding.
James Peters, president of the company that bears his name, said design work has started on new projects in Coto de Caza, Portola Hills and Rancho Santa Margarita. In addition, the company--which has been best known as a luxury home builder--has begun sales in the first phase of a 62-unit townhome complex in Rancho Santa Margarita, with prices ranging from $179,000 to $250,000.
Peters said the acquisition last month by Capital Pacific Corp. in Newport Beach of a controlling interest in J.M. Peters at a steeply discounted price has enabled the company to attract equity investment. He said the company intends to pass along the savings to buyers in its new projects but has not yet set prices.
Capital Pacific, headed by builders Hadi Makarechian and Dale Dowers, acquired 85.8% of Peters Co.’s stock. The deal was negotiated by the RTC as trustee for insolvent San Jacinto Savings. As a key part of it, the government in effect forgave nearly $98 million in debt.
The net result was that Capital Pacific gained control of Peters Co. at a price--$47.2 million--that amounted to a 40% discount from the value of the land in the company’s portfolio.
Peters Co., once one of the premier builders in Southern California, was crippled in 1990 when the federal government declared San Jacinto Savings insolvent, seized it and stopped providing money for Peters Co. projects.
For most of 1991, the company was unable to build houses.
“It’s good to be back in action,” Peters said Tuesday.
