Bank Delays Wood Ranch Foreclosure Sale Until May

The developer of Simi Valley’s sprawling Wood Ranch community won another reprieve Wednesday from the bank that has repeatedly sought to auction off the tournament golf course and other property to cover a defaulted loan.

Olympia/Roberts Co., which owes $15 million to Wells Fargo Bank, persuaded the lender to postpone today’s foreclosure sale until May 7.

The financially troubled development firm, which also owes about $6 million for a long-promised elementary school and $250,000 for city road improvements, told the bank it needs more time to renegotiate its obligations to the city and the Simi Valley Unified School District.

Olympia/Roberts’ agreement with the city, which runs through 1997, allows it to build about 1,500 more homes in Wood Ranch, a 3,000-acre planned community on scenic rolling hills in Simi Valley.

Under this pact, Olympia/Roberts is exempt from the city’s slow-growth law, which requires other home builders to wait in line for about 500 building permits issued each year.

Olympia/Roberts wants the city to extend this agreement for another five to 15 years--a move that would increase the value of the property and make it easier to sell the land.

“The bank feels their interests are best served by letting those discussions continue,” said Tom Larmore, an attorney for the bank.

The Simi Valley Planning Commission has scheduled a hearing April 7 as a first step toward terminating the Wood Ranch agreement because of the missed payment for Madera Road improvements.

But city officials said Wednesday that the hearing may be postponed for 30 days while negotiations continue with Olympia/Roberts.

The school district, which was ready in March to seek construction bids for the Wood Ranch elementary school, has indefinitely postponed that project. But school officials will not be able to complete the school by fall of 1994, as originally planned.

Nevertheless, Frank Rugani, an attorney for Olympia/Roberts, said he is optimistic that negotiations with the city and the school district will prove successful.

“We’re hoping to obtain an extension of the development agreement and a resolution of all obligations owed to the city and the school district,” Rugani said.

The developer’s financial woes became public last November when Olympia/Roberts defaulted on its $15-million loan, and Wells Fargo scheduled an auction for the Wood Ranch Golf Club and nearby lots for future houses.

Olympia/Roberts is a partnership that is owned by the American subsidiary of Olympia & York, a major international real estate company based in Canada. Olympia & York, wounded financially by a worldwide real estate slump, sought court protection from its creditors last year.

Since last November, Olympia/Roberts has received several foreclosure sale extensions from Wells Fargo. Olympia/Roberts representatives said they have been trying to sell the Wood Ranch property to repay the bank debt.

The developer wants to extend the development agreement because a buyer might not be able to finish building out Wood Ranch before the pact expires in four years.

Mayor Greg Stratton said Wednesday that before he votes for an extension, the 11-year-old Wood Ranch agreement must be updated to comply with current city building rules. “There are a whole bunch of new fees that have to be implemented,” he said.

In addition, the developer must repay $250,000 that the city spent on road improvements that Olympia/Roberts agreed to pick up, the mayor said.

Stratton said he believes a revised agreement could be reached before the new May 7 auction date. “My understanding is that things have been conceptually agreed to,” he said.

Meanwhile, school district officials independently are trying to preserve the Wood Ranch elementary school that Olympia/Roberts had agreed to build or finance. “The plans are stamped and approved by the office of the state architect,” said Mary Beth Wolford, deputy superintendent.

The school district had hoped to begin construction in June, but has been stalled because of uncertainty about promised money from Olympia/Roberts.

Wolford said school officials are considering alternative forms of payment, but declined to discuss negotiations with the developer.

Under one option, Olympia/Roberts could turn over land to the school that would be sold to cover the cost of building the school, Stratton said.

Until a new Wood Ranch school is built, students from that community will continue to attend Madera Elementary School, Wolford said. School officials plan to place another portable classroom at Madera to handle its growing number of students.