Developer Cedes Control of Community
Longtime Orange County developer Anthony R. Moiso on Friday surrendered daily control of his prized 5,000-acre master-planned community known as Rancho Santa Margarita.
A Boston real estate firm will take the management reins of the community of more than 25,000 people, the crown jewel of a ranching and land development concern founded by Orange County pioneers more than 100 years ago.
The management change represents the first time that an outside company has moved in to operate part of the holdings of beleaguered Santa Margarita Co., Orange County’s second-largest private landowner and a major influence on the development of south Orange County.
Copley Real Estate Advisors of Boston becomes managing general partner of the Rancho Santa Margarita community and has named one of its financial consultants to oversee daily operations. Copley and Santa Margarita Co. formed a 50-50 partnership 10 years ago to run the community.
Moiso, 56, great-grandson of pioneer rancher Richard O’Neill, will remain chief executive of the Santa Margarita Co., which he founded in 1983. He will focus on two other neighboring projects--Las Flores, a 1,000-acre community that is a joint venture between Santa Margarita Co. and another partner, and Ladera, a 5,000-acre master-planned community yet to be developed.
Saddled with high debt loads, Santa Margarita has been staggered by sagging home sales and falling land values.
Copley will be responsible for developing 250 acres of commercial property in Rancho Santa Margarita, land for 2,500 more homes and the town center as well as selling dealership parcels in the Santa Margarita Auto Center.
“We’re certainly not in liquidation mode,” said John Kelterer, who will run the joint venture for Copley. “We essentially plan to continue what has already been done out here and enhance value of our assets.
“This partnership has endured the real estate downturn. As it got bigger and bigger out here, it was just too much for one group to handle,” he said.
The restructuring announced Friday is part of the partnership’s continuing effort to cope with the financial problems. The company, through its partnerships, borrowed heavily to finance projects that took longer to build because of the real estate downturn of recent years.
“Real estate folks have been through some tough times, and generally something like this happens when the money partner, like Copley, gets worried,” said Al Gobar, a real estate consultant in Brea. “Moiso is still a partner, but it looks like he doesn’t have much of a say. That’s got to be a downer for him.”
Santa Margarita Co. was founded in 1923 by two brothers of the O’Neill family who originally owned the ranch but the company was dissolved several years later. Moiso created its successor in 1983.
“This restructure effectively positions Santa Margarita Co. for optimum success in 1996 and into the 21st century,” said Moiso in a statement. “Since the company will no longer be involved in the management of Rancho Santa Margarita, it will now be able to more efficiently focus on Las Flores . . . and the planning and development of the new 5,000-acre Ladera community.”
Expected to break ground in 1998, Ladera will include more than 8,000 homes, 135 acres of business and shopping areas, and nearly 3,000 acres of recreational and open space.
Friday’s restructuring is one of several changes at the land concern. Earlier this year, in the midst of rumors of bankruptcy, Santa Margarita Co. said it had negotiated a $24-million cash infusion from two of its major development partners, Copley and the California Public Employees Retirement Systems, CALPERS. The company said Friday that it will continue to sell land and negotiate with creditors.
As part of the restructuring, 20 employees of Santa Margarita Co. will join the Copley partnership, now called RSM Management Co. Santa Margarita, which laid off some of its 72 full-time employees in October, now has a staff of 45.