Wood Ranch Pact Threatened by Non-Payment

The agreement that allows 1,600 more houses to be built in Simi Valley’s Wood Ranch community will expire next week if the landowner does not make an overdue $100,000 payment to the city, Simi Valley officials said Tuesday.

The property owner, financially ailing Olympia & York Properties USA, failed to make a Jan. 1 payment, as required by a 1982 pact with the city.

On Monday, City Manager Lin Koester sent a letter to Olympia & York, warning that the agreement will end automatically if the company does not make its payment within 10 days after receipt of the letter.

The agreement is considered extremely valuable because it exempts the owner from a slow-growth measure approved by Simi Valley voters in 1986. That measure requires all other developers to wait in line for a limited number of home-building permits allocated by the city each year.

If the Wood Ranch contract is scrapped, Olympia & York--or anyone else who buys the land--might have to wait years for permission to put up more houses, city officials said.

“I’m surprised that they would not make the payment,” said Mayor Greg Stratton, who lives in Wood Ranch. “From a business standpoint on their side, it’s an unbelievable mistake.”

Olympia & York has said it cannot afford to finish developing Wood Ranch and is trying to sell its remaining acreage.

Peter Rosenthal, a spokesman for the property owner, would not say Tuesday whether the company plans to pay the critical fee before the deadline.

“All I can tell you is that Olympia & York is availing itself of the grace period,” he said.

Wood Ranch is a 3,000-acre community on rolling terrain in southwest Simi Valley. The 1982 pact allows the owner to build 4,026 residences. About 2,400 have been constructed.

Under the development agreement, which is believed to be one of the first in California, the owner vowed to build improvements, such as new roads and parks, and to make payments to the city.

Simi Valley, in return, promised not to change its building rules in a way that would cut the number of houses allowed in Wood Ranch.

In 1985, the city approved the construction of 2,700 new dwellings citywide, Stratton said. Concerned about increasing traffic and air pollution, Simi Valley voters in 1986 approved Measure A to slow the pace of growth.

Because of its development agreement, Wood retained the right to put up about 300 residences a year, Stratton said. Other developers must compete for the remaining 400 to 500 housing permits issued annually by the city.

“That’s why the development agreement is so valuable--because the development is exempt from the allocation system,” said Wolf Ascher, a deputy city planning director.

Ascher said Olympia & York and Olympia/Roberts, the original partnership that owned Wood Ranch, have made all of their previous payments to their city and have fulfilled all building obligations, such as widening Madera Road.

In a separate agreement with the Simi Valley Unified School District, the company has promised to pay for construction of an elementary school in Wood Ranch later this year.

Olympia & York is an American subsidiary of a large Canadian firm that sought court protection from its creditors last year. Its financial problems became apparent locally in November, when the firm defaulted on a $15-million Wood Ranch loan.

Its lender, Wells Fargo Bank, ordered a Dec. 3 auction of the private Wood Ranch Golf Club and some undeveloped Wood Ranch lots. That sale has been postponed until Jan. 14, while the company tries to sell the golf course or restructure its debt.

Rosenthal, the spokesman for Olympia & York, said sale negotiations were continuing Tuesday, but he declined to elaborate.

Olympia & York’s valuable development agreement could be transferred to a new owner if the city approves and if the $100,000 fee is paid, city planner Ascher said.

If the fee is not paid, “there are so many questions that will arise that I don’t think we know all of the ramifications,” Ascher said. “We have to take it one step at a time.”