Firm's troubles include foreclosures, liens and work slowdowns
A look at some of the matters in front of the company
Foreclosures, liens, lawsuits and work delays are dogging land developer SunCal Companies of Irvine. David Soyka, SunCal's senior vice president of public affairs, said the problems facing the company stem from the slump in the housing market and called many of the lawsuits unmerited.
Among SunCal's recent problems:
FORECLOSURES:
• A lender repossessed the 1,300-acre site of SunCal's proposed Copper Canyon project near Reno in Sparks, Nev., last week, after no one met the $37 million opening bid at a foreclosure auction.
• D.B. Zwirn Special Opportunities Fund, which had lent SunCal $75 million, repossessed a north Santa Ana apartment building on Monday after no one made the minimum $49 million bid. Two other properties in Tustin, including an apartment building where SunCal planned to build its three-story Hampton Village condos, are scheduled to be auctioned off on Thursday.
LIENS:
Five lawsuits have been filed in Orange County alleging a total of almost $1.3 million in fees have gone unpaid to contractors and a supplier. The claims range from $9,724 allegedly owed to a concrete supplier to $941,960 owed for grading work on a project in Beaumont. In addition, The Bakersfield Californian reported recently that at least two dozen mechanic's liens have been filed in Kern County for $2.2 million in construction services and supplies.
LAWSUITS:
• SunCal sued the Frank Family Partnership, owner of the 26.7-acre parcel in the Disney resort, arguing that the sellers wrongfully terminated their sales contract with SunCal and resold the property to another developer. The lawsuit seeks $60 million in damages.
• Villa San Clemente, developer of a 59-acre shopping center adjacent to SunCal's Marblehead Coastal residential project in San Clemente, is seeking a restraining order to prevent SunCal from withdrawing funds from an escrow account that was set up to ensure that promised infrastructures will be built for the retail site. The suit alleges that SunCal has failed to complete development work on the site even though 85 percent of the escrow fund has been withdrawn.
• Todd Kurtin, a former SunCal partner, sued SunCal CEO Bruce Elieff and numerous SunCal affiliates alleging they failed to pay 22.6 million of a $49 million court settlement agreement stemming from an earlier dispute over partnership issues.
OTHER MATTERS:
Work has slowed on a number of other SunCal projects. For example, the city of San Juan Capistrano issued a “notice of non-performance” last month accusing SunCal of failing to do “any significant construction” on several public works projects connected to the Pacifica San Juan development, including the widening of Valle Road.
Soyka said work also has slowed down on at three other projects in the state. Work has slowed on bridge construction at the Marblehead Coastal development, he said, as well as on SunCal's McAllister Ranch development near downtown Bakersfield, where contractors and suppliers have filed $2.2 million worth of liens, he said.
Source: The Orange County Register
