YORBA LINDA : Legal Action Delayed to Find New Builder

Legal proceedings against Woodcrest Development Inc. have been delayed by city officials to give the company’s financial backer time to find a builder to take over several uncompleted housing developments.

Woodcrest, the principal builder of about 300 homes at the Del Palazzo, La Terraza and Summit Chase developments, filed for bankruptcy in May and left the three projects in various stages of completion.

Last month, City Engineer Roy Stephenson began legal proceedings to seize performance bonds worth several million dollars, which would enable the city to finish the streets and landscaping, maintain existing trees and plants, and fence off unfinished construction sites.

But Bank of America, which financed Woodcrest and is searching for another builder to take over the projects, asked the city to delay the proceedings, and Stephenson agreed.

“They pleaded with me to halt proceedings,” Stephenson said. “They wanted to avoid having (the bond company) involved, complicating their negotiations with other builders.”

Last week, the City Council agreed to hold off on calling the bonds.

Residents in the area complain that the unfinished construction at Del Palazzo is unsightly and a safety hazard. When construction stopped, the neighborhood was left with several cement foundation pads with metal pipes protruding from the ground.

The city is most concerned about public improvements that the developer was to have made to the surrounding area, including street improvements and landscaping. According to Stephenson, Woodcrest has not put the final layer of asphalt on some streets and landscaping has not been completed. Existing landscaping has not been maintained or watered by Woodcrest since May.

While the delay helps Bank of America, the city won’t approve the housing tracts until all the improvements are completed. That could take up to six months, Stephenson said, and until then the approximately 150 homeowners in the area are not officially city residents.

In exchange for the city delaying seizure of the performance bonds, Bank of America agreed to water and maintain existing landscaping, sweep streets and install fencing around uncompleted houses.