Wood Ranch’s Promise Dims : Development: The Simi Valley residential project remains about 40% unfinished. The builder appears on the brink of bankruptcy.

Wood Ranch, a 3,000-acre planned community in southwest Simi Valley, seemed in the 1980s to be a model of unimpeded residential building. The city eased building codes in exchange for the developer paying for streets and other infrastructure, and within several years luxurious homes, apartments, a park, an equestrian trail and a world-class golf course sprouted.

But today, Wood Ranch is a victim of the sluggish real estate market. With about 40% of the development unfinished, the project has stalled. The golf course is up for sale. Its developer, Olympia/Roberts, appears on the brink of bankruptcy, and has no plans to finish the project. Meanwhile, Simi Valley is worried about who will pay for a much-needed elementary school in Wood Ranch.

Even the development agreement that allowed Olympia/Roberts to bypass certain building rules is in jeopardy. On Thursday, Olympia/Roberts failed to make a $100,000 payment due the city as part of the agreement. That pact called for the developer to build an elementary school--estimated at a cost of $6 million--that was supposed to open in fall of 1994.

“That development agreement is a valuable tool,” said Simi Valley Mayor Greg Stratton, who lives in Wood Ranch. Without it, he said, it will be far more difficult for Olympia/Roberts or another developer to build out the rest of Wood Ranch.

Much of Olympia/Roberts’ troubles stems from its parent firm--an American subsidiary of Olympia & York of Toronto, one of the world’s largest real estate firms. Plagued by a worldwide real estate slump and debts of $18.5 billion, Olympia & York filed for bankruptcy reorganization in May and has been trying to sell some of its properties to settle its debts.

Peter Rosenthal, a spokesman for Olympia & York in New York, said the Wood Ranch project has been unprofitable and the company has no plans to finish it.

Olympia/Roberts was set up as a California partnership, and in February, 1982, it signed a deal with Simi Valley that called for the development of about 4,000 residences in the scenic rolling community near the Reagan Presidential Library. So far, about 2,400 residences have been built. Olympia/Roberts owns several hundred acres of raw land that must be developed before the sites can be sold as lots to home-builders.

Olympia/Roberts was formed specifically for Wood Ranch as a partnership between Olympia & York and Robert Levenstein, formerly head of the Los Angeles home-builder Kaufman & Broad. But last summer the partnership dissolved, with Olympia/Roberts essentially buying out Levenstein.

In the dissolution, Levenstein retained some properties in Wood Ranch, including a small shopping center, plus office buildings with plenty of vacancies, sources said. Levenstein, head of a firm called The Roberts Group, could not be reached for comment.

Olympia/Roberts’ problems surfaced in mid-November when Wells Fargo Bank said it was planning to auction the golf course and some additional acreage in Wood Ranch because Olympia/Roberts defaulted on a $15-million loan. The loan, made several years ago so Olympia/Roberts could pay for Wood Ranch infrastructure, was due last summer, according to Tom Larmore, a Wells Fargo attorney.

Wells Fargo agreed recently to postpone the public auction of the Wood Ranch properties until Jan. 14. Meanwhile, Olympia/Roberts has been negotiating with American Golf Corp. of Santa Monica about buying the Wood Ranch Golf Course.

Rosenthal said Monday that those talks are continuing as well as discussions with Wells Fargo on the $15-million loan. He declined to comment on the $100,000 payment due Simi Valley or the company’s plans regarding Wood Ranch.

“Everything is on hold,” he said.

Larmore, the Wells Fargo attorney, said Olympia/Roberts has said the developer will file for bankruptcy if it can’t work out some arrangement on the $15-million loan repayment.

The proposed sale of the golf course has stirred debate and concern among Wood Ranch homeowners, as well as the golf club’s 400 members, many of whom paid $25,000 to join, plus about $400 in monthly maintenance fees. Club members, worrying that a new owner could turn the prestigious golf course into a public course, say membership bylaws state that members have rights to refuse a sale and can match it with their own bid.

“I think it’s going to be a battle,” said Clifford Pearson, a Tarzana attorney who serves on the golf club members’ committee.

Wood Ranch homeowners fear that if the golf course were turned into a public course it would hurt property values and lifestyles, said Frank Sims, a vice president of Diamond Bar-based Shea Homes.

Shea Homes has built about 85 houses and owns lots for 30 more houses in Wood Ranch with prices ranging between $380,000 and $550,000. “We made a significant investment in Wood Ranch,” Sims said. But like other builders in the region, he said, “we’ve had some problems selling homes there.”

Of more concern to the city is the building of the elementary school and roads in Wood Ranch that would link that community with the rest of the city. Developers say that without the additional roads there will be more congestion along Madera Road, the main thoroughfare that runs along Wood Ranch and connects with the Simi Valley Freeway.

Mary Beth Wolford, a deputy superintendent for the Simi Valley Unified School District, said a school was very important for Wood Ranch. “Without it, it will really harm the development of Wood Ranch,” she said. “People have bought their homes and are waiting for the school to open.”

There are now about 300 potential elementary students living in Wood Ranch, and those students now attend nearby Madera Elementary School, Wolford said. “But that school is full and it can’t take any more students.”

Olympia/Roberts did pay for the architectural design of the school, as stated in the development agreement, and it deeded the site of the school to the city. City officials had planned to take bids on the construction of the school in March.

But with Olympia/Roberts’ in financial straits and the development agreement in jeopardy, analysts agree that the school’s prospects--like the rest of the Wood Ranch project--seem doubtful.

Given current economic conditions, Sims doubted that the rest of Wood Ranch would be developed. “I don’t know of any lender who’s going to front the money to develop it.”