Boston Firm Takes Over in Rancho Santa Margarita
Longtime Orange County developer Anthony R. Moiso on Friday surrendered daily control of his prized master-planned community, 5,000-acre 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 landowner next to the Irvine Co. and a major influence on the development of South 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 planned community.
Moiso, 56, great-grandson of pioneer rancher Richard O’Neill, will remain chief executive of the Santa Margarita Co., which Moiso set up in 1983. He will focus on two other neighboring projects--Las Flores, a 1,000-acre community, 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 and land for 2,500 more homes, the town center and 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 the 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,” said Kelterer, who has been working at Santa Margarita Co. offices since January.
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.”
The Santa Margarita Co. was founded in 1923 by two brothers of the O’Neill family that originally owned the ranch, which 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,” Moiso said 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, has a staff of 45.
The partnership’s new leader, Kelterer, was executive director of Merrill Lynch Private Capital in Los Angeles, where he structured the original joint partnership between Copley and Santa Margarita Co. in 1985.
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Santa Margarita Co. Key Events
1880s: Richard O’Neill Sr. and James C. Flood purchase 230,000-acre Rancho Santa Margarita y las Flores. The property originally included most of southern Orange County and northern San Diego County, as far south as Oceanside.
1923: Santa Margarita Co. is established and becomes one of the largest cattle ranching concerns in the state.
1982: A 5,000-acre portion of the ranch called Plano Trabuco is rezoned to become the planned community of Rancho Santa Margarita.
1985: Construction begins on Rancho Santa Margarita.
1986: First houses offered for sale in May.
1990: Tijeras Creek Golf Club in Rancho Santa Margarita is built.
1991: Construction of Plaza Antonio in Rancho Santa Margarita Town Center begins.
1992: Extensions of the Oso, Antonio and Alicia Parkways open into Rancho Santa Margarita.
1993: First segment of Foothill tollway opens, reducing the commute from Rancho Santa Margarita to central Orange County.
1995: Planned merger with Western National Group falls through.
* Santa Margarita Co. announces that it has negotiated a $24-million cash infusion from Copley Real Estate Advisors and the California Public Employees Retirement Systems, CalPERS. It also places major portions of its land holdings up for sale in an attempt to reverse financial woes brought on by the real estate downturn.
* Boston-based Copley Real Estate Advisors becomes managing general partner and takes over daily management concerns of Rancho Santa Margarita. The firm began investing in Santa Margarita Co. in 1985 and became half owner of the planned community.
Santa Margarita Co.
Headquarters: San Juan Capistrano
CEO/president: Anthony R. Moiso
Business: Land management, cattle ranching and real estate development
Copley Real Estate Advisors
Parent firm: New England Investment Cos.
Business: Real estate investment
Source: Times reports
Researched by JANICE L. JONES / Los Angeles Times