BURBANK : Developer to Fight Auction of Property
The developer of a controversial luxury home project on the Burbank hillsides has vowed to fight an effort by a former buyer to auction off the property in a foreclosure sale next week.
“That auction is never going to happen,” said Sherman Whitmore, who has been trying to build the 117-home project for 11 years, fighting local environmentalists, city and state regulations and now J.M. Peters Co. of Newport Beach.
J.M. Peters, claiming that Whitmore owes $1.7 million plus interest--what the Peters company put into the Burbank Hill project, has filed a notice of default on the property. As a result, an auction is scheduled Wednesday on the steps of the Los Angeles County Court Building in Norwalk.
The asking price for the property is $2.28 million.
“We’ve been instructed that we can give no comment,” said Valerie Winsor, a lawyer representing J.M. Peters Co.
Whitmore will try to block the auction when he appears before Judge Robert H. O’Brien in a hearing Monday.
Whitmore filed a lawsuit against J.M. Peters last month in Los Angeles Superior Court seeking $25 million in damages--the expected value of the developed land. The suit claims that J.M. Peters reneged on an agreement to pay the costs of getting the project approved by the city of Burbank and building required improvements such as streets and other services.
“I think we have an uphill battle,” said Brian Bird, a lawyer for Whitmore.
The lawsuit claims that J.M. Peters Co. had agreed in 1988 to the payments in exchange for a promise that Whitmore would sell the company 90 of the lots. Whitmore put the entire project up as collateral to be forfeited if he broke his promise.
In 1991, when the project was close to getting final approval from the city, J.M. Peters Co. told Whitmore that the company would spend no more on the project. According to the lawsuit, J.M. Peters Co. reported it had been taken over by another company and had no funds available for the Burbank Hill project.
To continue the project, Whitmore sought a $1.3-million loan from the Bank of Beverly Hills. The bank demanded that Whitmore put the property up for collateral, superseding the J.M. Peters 1131359776
