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Local angle: Lehman’s Kern projects
| Monday, Sep 15 2008 6:55 PM
Last Updated: Wednesday, Sep 17 2008 7:48 AM
You probably know Lehman Brothers, through a subsidiary, put up $235 million for the development of McAllister Ranch in far southwest Bakersfield — a loan that defaulted in April.
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You might not be aware of other large local projects the now-bankrupt investment bank has funded in recent years. In addition, Lehman made many home loans in Kern, county documents show.
Here are highlights of major deals:
• $1 billion: Cal City prison
In 1999, Lehman Commercial Paper Inc. — the same subsidiary that later made the McAllister Ranch loan — upped an existing credit agreement with Nashville-based Corrections Corp. of America.
The money was borrowed against what’s now a private federal prison about 10 miles northeast of California City, the California City Correctional Center. More than 2,600 inmates lived there in June, a recent news story indicated..
In 2002, the credit limit was lowered to $715 million, public documents indicate.
• $107 million: Valley Plaza
In 2003, Lehman Brothers Bank gave funds to owners of the mall on Ming Avenue, Bakersfield Mall LLC.
The loan was taken over the following year by LaSalle Bank in Chicago. LaSalle has since been acquired by Bank of America.
• $550 million, Marriott
In 2005, Lehman Brothers Bank loaned big bucks to Maryland-based Marriott for the Courtyard hotel at 3601 Marriott Drive. A nearby business center was also used as collateral.
In April, the loan was taken over by LaSalle Bank.
Lehman made another loan, this time for $120 million, against part of the property around January 2006. The second loan was to a subsidiary of Dallas-based Sarofim Realty Advisors Co.. The loan was transferred to LaSalle Bank in March this year.
• $57.6 million, Old River Ranch
In 2005 and 2006, Lehman Ali Inc. agreed to loans totaling about $57.6 million to various companies of Calabasas developer Bryan Troxler for a southwest tract planned for more than 6,000 homes. The future Old River Ranch development sits south of Panama Lane, east of Allen Road and north of Taft Highway.
These days it is mostly ag land.
• $2.45 million, northwest retail
A 2003 loan went to a Newport Beach company managed by Donald K. Benedict for the River Run Plaza Retail Center on Coffee Road, north of Olive Drive. The center’s addresses include 6023, 6077 and 6085 Coffee Road. Tenants include a Washington Mutual branch, a bagel shop and a tanning salon.
• $5.25 million, Taft Hills Plaza
A San Clemente developer, Joe Lacko, borrowed funds through Bear Valley Plaza LLC in 2006 against parts of an existing shopping center at 1008 to 1092 W. Kern St. in Taft.
In December 2007, the loan was assigned to LaSalle Bank.
• $4.28 million, East Hills Village Annex
Portions of an existing retail area in the 2600 block of Oswell Street got a loan recorded in January from Lehman Brothers Bank.
The manager of the Beverly Hills company, David Maltzman, signed loan documents available publicly.
• $20 million, McAllister Ranch
In late 2004, Lehman Ali loaned a subsidiary of Irvine-based SunCal Cos. a bit of pocket change, relatively speaking. SunCal purchased the nearly three-square mile McAllister Ranch site in late 2004 for $35 million.
In January 2006 a different subsidiary, Lehman Commercial Paper, made the $235 million loan that defaulted in April.
Last week, construction companies owed money for work at the unfinished 6,000-home golf course development filed papers trying to force the SunCal subsidiary into bankruptcy rather than have Lehman foreclose on the loan.