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Debts mount at golf course development
| Tuesday, Mar 11 2008 7:25 PM
Last Updated: Wednesday, Mar 12 2008 8:13 AM
The sheer quantity of unpaid bills at a southwest Bakersfield development makes you wonder: What’s up with McAllister Ranch?
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As of Tuesday, almost $15 million worth of liens and lawsuits have been filed in recent months by construction companies that have worked on the planned 6,000-home golf-course community, a Californian tally found.
Separately, the Irvine-based developer behind the project, SunCal Cos., had a $74 million loan foreclosed on last week for a project in Shafter.
SunCal spokesman Joe Aguirre did not respond to questions submitted Tuesday.
The 2,070-acre site at the northeast corner of Panama Lane and South Allen Road features a golf course designed by Greg Norman — something touted on a billboard ad currently floating over northbound Interstate 5 near Santa Clarita.
The course is finished; the clubhouse mostly done. A gated sales office had both a working fountain and a tumbleweed out front around 5:20 p.m. Tuesday. Row crops grow on acreage across from the future community’s walled boundaries while oil fields surround the sales office.
Most related documents are filed under the affiliate SunCal created for the development, LBREP/L-SunCal McAllister Ranch LLC. SunCal’s relations with at least one associate have frayed.
Troon Golf, a Scottsdale, Ariz.-based golf course management company that was going to operate McAllister Ranch’s course, ended its involvement with the project a month ago, said Darrell Morgan, Troon’s vice president of golf operations.
“I don’t know what plans were going forward,” Morgan said.
LIENS HURT
One small Bakersfield company is feeling pinched by the situation.
Higher Ground Engineering & Land Surveying, which employs eight, provided construction staking services for McAllister Ranch.
Workers marked out where everything would be built, from storm drains, sewers and roads to the golf course.
In October, SunCal told them to stop working, said Higher Ground’s president, Aaron Byrd.
Byrd filed a mechanic’s lien in February claiming SunCal owed his company $120,961. Such filings start a legal process that can lead to foreclosure if bills aren’t paid.
The process takes time and requires a court date if the developer doesn’t respond to the lien.
“It puts extreme strain on cash flow for us,” Byrd said of not getting paid. “We spent a tremendous amount of money providing those services.”
It’s only the second time in five years Byrd has filed a mechanic’s lien to recover a delinquent bill, he said.
He’s been assured he’ll be paid, but it’s “a matter of when,” Byrd said.
Several lien claimants contacted Tuesday said they maintain a good working relationship with SunCal and are optimistic about getting paid.
“They’ve been a great client,” said A.J. Whitaker, who runs the Bakersfield office of Stantec Consulting Inc.
The company, which provided project engineering for the McAllister Ranch development, is owed $601,998, county records show.
“Like most in this industry, (SunCal is) being affected by the mortgage crisis and we’re seeing it trickle down to the consultants,” Whitaker said.
THE PROCESS
Mechanic’s liens are recorded fairly frequently, said William Alexander, an attorney representing Bakersfield’s Irv Guinn Construction Co., which filed a lien against the McAllister Ranch property for $365,065 in late February.
The number filed at McAllister Ranch is unusual, he said, but not entirely unexpected.
“Given the size of the project and the difficulties in the market, I don’t think it’s unpredictable at all,” Alexander said.
The liens could ultimately result in the property being sold at auction, Alexander said, with proceeds going to pay contractors and suppliers. That outcome is unlikely, he added, since most property owners resolve payment issues before a case progresses that far.
As of Tuesday, 63 mechanic’s liens totaling $14.9 million have been filed against the project by 36 companies since November, The Californian’s tally found.
Of those, six have so far progressed to lawsuit status.
Mechanic’s lien claimants have 90 days after filing to follow up with a lawsuit to enforce the lien.
In a development with multiple claimants such as the McAllister Ranch project, the cases are typically consolidated and heard together, said Joe Abramson, a Woodland Hills attorney.
Abramson represents Genesis Golf Builders Inc., a Scottsdale, Ariz. company that has filed a lawsuit saying it’s owed $830,530 for building the McAllister Ranch golf course.
FORECLOSED
A week ago another SunCal affiliate, SunCal Mission Lakes LLC, allowed a defaulted $74 million loan to foreclose.
The money had been loaned by Lennar Corp. against 515 acres in Shafter that Lennar sold to SunCal in 2006.
Neither company has responded to requests for comment on the foreclosure since Lennar repossessed the acreage March 5, but both previously said their relationship was good despite the bad loan.
Lennar and SunCal are linked on the McAllister Ranch project as well, county records show.
The two inked a purchase agreement in 2006 giving Lennar dibs on the McAllister Ranch site. No price was listed in the recorded document.
Lennar representative Marlee Lauffer declined to comment on this story Tuesday.