Bankruptcy-foreclosure-and-problem-projects

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As you are the city attorney for Oakland I want to notify you of a situation that presents an extreme and imminent danger to thousands of Oakland residents which has been allowed to worsen considerably, and has been perpetuated, under Oakland’s oversight.

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Residents of the bankrupt McSweeny Farms development in southeast Hemet say the neighborhood in which they are living is a far cry from the one they were promised when they moved in over the last several years.

Facilities such as a park, an Olympic-size swimming pool, gym, lounge, party room, and landscape maintenance have either not been finished or have been withdrawn, say several residents.

Though they are not getting what they were promised, they are being charged what they promised, $177 per month, for the operation of those facilities, said Laura Camacho-Flores.

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Beleaguered residents of the Pacifica San Juan project off Valle Road will continue paying a Mello-RoosA special tax assessed on an area for a specific purpose—see also CFD (community facilities district) tax that generates $443,000 a year, mostly for the Capistrano Unified School District, even though the project only sends 10 kids to public schools.

Fewer than 60 of a planned 416 homes were built in Pacifica San Juan before the developer, SunCal, and lender, Lehman Brothers, plummeted into bankruptcy. Residents have attended several meetings of the Capistrano Unified School District board of trustees, asking for relief from the tax.

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The county’s largest delinquent taxpayer is Suncal Bickford Ranch LLCLimited Liability Corporation, which was developing a 2,000-acre residential community between Lincoln and Penryn. It owed more than $2.9 million, according to county statistics.

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The school district has not issued a $20 million bond the taxes are meant to pay for. Instead, the money will sit in an account until enough homes in the neighborhood are built to issue the bond, according to Cary Brockman, facilities planning director for Capistrano Unified.

That could be a problem. Following a spate of lawsuits, Pacifica developer SunCal filed for bankruptcy protection in November. Its financial backer, Lehman Bros., had already filed for bankruptcy in September.

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In the three months since the developer SunCal first sought to get its plan for the former Naval Air Station on Alameda's November ballot, this small town with a reputation for big disagreements has certainly lived up to expectations. The signature-gathering process escalated from mailers and mayoral endorsements, to petitioner misrepresentations and a movement to withdraw signatures, to an outright altercation after one signature gatherer shoved an Alameda Sun editor for daring to take her picture. The company that hired the petitioners boasts on its web site of once "Qualifying a measure in Alaska in under three weeks in the midst of minus 40-degree weather and an exploding volcano," but such acts of nature are apparently no preparation for weathering an Alameda development debate.
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In April, I did a front-page story detailing a series of financial restructuring deals made by Irvine developer SunCal Cos. and one of its largest financiers, New York-based Lehman Brothers Holdings Inc.

Now the dealings between the two are starting to get a lot more attention from Wall Street, following a massive quarterly loss for Lehman.

Two months ago, I reported that SunCal had reworked its financing for close to 30 projects-many of them backed by Lehman-including San Clemente's Marblehead Coastal housing development.

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Venerable Irvine builder SunCal Cos. said Thursday that it would seek federal bankruptcy protection for two of its premier planned residential developments in Southern California -- including a 45-story luxury Westside tower on one of the region's most valuable pieces of land.

This proposal does not resolve the considerable concerns the Navy has regarding the financial stability of SunCal and its involvement in at least 27 bankruptcies.

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One partnership pursued by Mr. Walsh exemplified his newfound appetite for ever riskier deals: transactions with the SunCal Companies of Irvine, Calif., an operation with an intriguing business model. It bought land, primarily in its home state, and sought government approval for residential development. If it got the green light, it sold the land to builders for an enormous profit. Mr. Walsh lent SunCal more than $2 billion and formed a close relationship with its founder, Boris Elieff. Mr. Elieff did not return calls seeking comment.