Developer Files for Chapter 11

The developer of a project on one of the last open spots along the Ventura County coast has filed for bankruptcy protection, but company officials say the development will proceed.

Executives of North Shore at Mandalay Bay, a planned 333-home development on about 90 acres of Oxnard coastline, filed a plan of reorganization last week under Chapter 11 of the Bankruptcy Code.

The developer owes about $5 million to one creditor, GreenPark Group, for an acquisition and development loan that was due to be paid in January, said Vince Coscino, an attorney for the developer. The firm sought an extension, couldn’t agree with the lender on one and filed for Chapter 11 protection to prevent foreclosure on the land, he said. “This is not a difficult case to stretch out the loan,” he said. “We may bicker with the lender over the terms, but there will be no stalls or delays.”

Coscino said the developers have $10 million to $20 million in equity over what the lender is owed.

The Chapter 11 filing follows a series of hurdles for the Newport Beach-based developer of the former oil dump. There was a discovery of rare Ventura marsh milk vetch, which prompted lawsuits from environmental organizations and more delay as the groups worked out a settlement agreement to protect the species.

The Ventura marsh milk vetch was assumed extinct in 1967, but almost 400 plants were discovered on the Mandalay site in 1997. The plant was declared an endangered species this week.

And last year, a county planning agency temporarily rescinded approval of the project because the city failed to list a landowner on its annexation application.

Although the annexation has been reinstated, North Shore must still get approval from the California Coastal Commission, which is expected to decide in August, said Roger Heartman of the firm’s managing member, Aspen Members.

Some environmentalists said that despite the developers’ promises, they were worried about the Chapter 11 filing. As part of a settlement with the environmental organizations, North Shore agreed to provisions that include restoration of the site, a 10-acre reserve around the Ventura marsh milk vetch and the planting of off-site populations.

“The fact that they appear to be in some difficulty raises questions about their ability to fulfill their obligations,” said John Buse, an attorney for the Environmental Defense Center in Ventura. “They’ve taken on considerable liability in their conservation efforts.”