Developer Koll Ordered to Pay $20.8-Million Tax Judgment : Charge: At issue is previous tax-sharing agreement. Newport home builder says it will appeal, stands by its Bolsa Chica project.

Koll Real Estate Group Inc. said Friday that it has been ordered to pay $20.8 million to the Internal Revenue Service.

Koll, a home builder based in Newport Beach, said it intends to appeal the decision and insisted that the situation will have no negative effect on its financial condition.

“There will really be no impact,” said Raymond Pacini, chief financial officer at Koll. “Once there is a final judgment, and if we have to pay, we have arranged to borrow the money to pay for that.”

Koll has lined up financing of as much as $25 million for an appeal bond, he said.

Pacini said the decision will not affect the development of the company’s Bolsa Chica project, which was approved for up to 3,300 homes last week by the Orange County Board of Supervisors.

Koll was sued earlier this year by Abex Inc. and Wheelabrator Technologies Inc., both based in Hampton, N.H.

All three companies are former subsidiaries of Henley Group Inc. and were spun off as individual entities from 1988 through 1992.

In 1987, Henley Group bought an interest in Santa Fe Pacific Corp. The following year, the company sold its stake in the Santa Fe Southern Pacific railway to Itel Corp., the Chicago-based conglomerate. Henley reported a loss on the sale.

The IRS conducted an audit, completed in 1993, and declared that the company had gained from the transaction. The agency demanded payment of taxes from the sale and filed suit against Wheelabrator.

In settling the suit, the IRS found Koll responsible for $20.8 million of the $72 million owed because of a tax-sharing agreement it had signed when it was spun off from Henley Group.

Pacini said Friday, however, that “the only way we could be held responsible is if the other two companies had obtained our consent with respect to the settlement with IRS.”

Current managers of Koll, he said, should not be held accountable, for they were not responsible for drafting or signing the tax-sharing agreement.

“The agreements were entered into by prior management,” Pacini said. “It was the same people signing for Abex, Wheelabrator and Koll.”

But a spokesman for Wheelabrator said that Koll is bound by the tax-sharing agreements to pay its share. He said there is no stipulation in the contract saying that Koll must be consulted on settlements made by Wheelabrator with federal tax authorities.

“We were all in agreement on the tax-sharing arrangement,” Kevin Stickney said. “Our position has always been that it was enforceable.”

Koll has struggled financially in recent years during Southern California’s real estate slump, and its revenue has declined steadily. For 1989, Koll reported revenue of $133 million. By sharp contrast, the total last year was $16.7 million.

For 1994 so far, the company has reported losses of about $4 million for each quarter.