Loan Default Jeopardizes Proposed Hotel : Development: James Monaghan had won city approval for a 450-room resort on the Long Point land. Now, the former Marineland site will likely go up for auction with a second property on Oct. 15.

Phoenix developer James A. Monaghan has defaulted on $28 million in real estate loans, forcing the foreclosure sale of his Long Point property where he had proposed building a 450-room resort hotel, records show.

The 105-acre Long Point parcel, located at the old Marineland aquatic park in Rancho Palos Verdes, and a second, 315-acre site will go on the auction block Oct. 15 unless Monaghan can refinance the loans before then, city officials said.

The 315-acre parcel is located in the Portuguese Bend landslide area of Rancho Palos Verdes, where a city-imposed moratorium on building has prevented any development.

Monaghan and his lawyers declined to comment on the default or the pending foreclosures. The developer earlier had acknowledged having difficulty raising money for the $200-million resort project, blaming a faltering economy and tight money.

Monaghan’s purchase of the old Marineland site in 1987 was financed by a New Orleans savings and loan, Oak Tree Federal Saving Bank, that has since failed. The financial institution was seized by regulators in 1991 and is now managed by the Resolution Trust Corp.

The RTC started default proceedings in May after Monaghan had fallen behind in his loan payments, federal regulators said.

News of the default and foreclosure became public last week when the RTC published legal notices in a local paper announcing the Oct. 15 public auction. The sale is scheduled for downtown Los Angeles.

“We are foreclosing on both properties,” RTC spokesperson Felisa Neuringer said. She said the RTC itself will bid the $28 million owed on these lands, and if no one tops that bid, the agency will take title and then try to sell the land.

City officials expressed disappointment at the pending foreclosures but said they were not surprised by the regulators’ actions.

“We suspected there were problems . . . (because) the developer wasn’t moving ahead with the project,” said Dudley Onderdonk, director of the city’s environmental services.

The big hotel and convention center project, called Rancho Palos Verdes Resorts Inc., had been given final approval by both the city and the state coastal commissions within the past year. The only holdup in the start of construction had been financing, officials said.

The resort project, located on the coastal bluffs with a view of Catalina Island, was to have included golf courses, tennis courts, restaurants, large meeting rooms and a 450-room, four-story hotel that was to open in 1994.

City officials had hoped to reap a bonanza in revenue from the project, estimating the resort would have generated $4.8 million a year in hotel bed taxes and use fees when fully booked.

“We don’t know what is going to happen now,” City Manager Paul Bussey said. He noted it was not uncommon for a developer to “restructure” his financing to stave off foreclosure before the auction deadline.

“If it is sold, I assume the new developer will come talk to us,” Bussey said.

Bussey explained that the conditional-use permits and project approvals granted by the City Council stay with the land, even if it is sold. A new owner could simply apply for a building permit and proceed with the same resort plans, Bussey explained.

If, however, the new owner wanted to develop residential property on the site, or substantially change the current plans for the resort, the developer would have to start the entire planning process over.