Troubles are mounting for the Irvine-based developer that lost a battle last fall with the Walt Disney Co. over a proposed residential project in Anaheim’s resort district, then lost the land planned for the development.
SunCal Companies, a 70-year-old, family-run developer with projects throughout California, Arizona, Nevada and New Mexico, has been sued seven times in Orange County since October by companies claiming the firm or its affiliates defaulted on loans, court settlements or bills for construction and consulting work. The company also faces complaints and legal action over alleged work stoppages on pending projects.
In at least two cases, defaults have resulted in foreclosure action. A lender foreclosed on 1,300 acres in Sparks, Nev., where SunCal planned to develop homes and businesses. A Santa Ana apartment complex on North Bristol Street (see picture) was repossessed Monday in another foreclosure sale, and a third sale on two Tustin apartment buildings is scheduled for Thursday.
Elsewhere in California, work has slowed on SunCal’s McAllister Ranch project in Bakersfield, and the company has been beset by claims from contractors and suppliers alleging they are owed $2.2 million in unpaid bills.
SunCal blamed financial troubles on the tight housing market. David Soyka, senior vice president of public affairs, issued the following statement:
“Like every other homebuilding and land development company, we are facing market challenges.The entire industry is affected, and we’re working with our lenders and Wall Street financial partners, both public and privately held companies, to decide how to adjust our business plans.”
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Ahhh …. did another big shot - wheeler dealer developer get carried away and spend more money than they had in their wallet ? The bigger they are, the harder they fall. Their loyal employees will suffer from the owner’s lack of foresight and bad judgement. Seen it before.
Warning’ - any subcontractors doing business in this real estate climate need to tighten credit to “zero” or risk getting dragged down with these soon to be bankrupt companies. Unless small business owners want to spend their time playing bill collector, just say no.
Are they developing a large project in San Clemente?
Yeah.
SunCal’s beautiful San Clemente project is at a standstill since they aren’t paying the subs.
I sure hope after all that went on to get that one-of-a-kind project started, SunCal can follow through… instead of leaving a cobbled, unfinished property and bridge to nowhere!
Comments SunCal?
Blame it on Mickey(tm). You know the lawyers will.
For those of us that were rooting for the Walt Disney Company to win their legal battle with SunCal, this is great news.
It’s also great news for folks like me who felt Anaheim City Councilwoman Lorri Galloway was acting irresponsibly by being the enabler inside City Hall who let SunCal bluster their way into that mess in the first place.
I’ve said it before, but Lorri Galloway owes the good taxpayers of Anaheim an apology for getting herself and her city involved, at taxpayers expense, with a slimy developer like SunCal. Apologize for the mess you helped create Ms. Galloway! SunCal is no longer there to help you and bankroll your ego-fest, so just be a woman about it and apologize before election day.
As for SunCal, of course it is disheartening to hear that their lower level employees will soon be out of jobs. As for the higher ups at SunCal, they don’t deserve any sympathy. They played the market fast and loose with easy credit, and when the easy credit came to an end and the real estate market crashed suddenly, they got caught with too many hands in the till and not enough hands on the wheel. Shame on them for being such poor managers and not paying the honest people who are/were working for them!
Let this be a lesson to any two-bit politician like Lorri Galloway; when a big talking developer comes to town throwing money around and making promises to the moon, don’t automatically sign on with them and expect the taxpayers and voters of your city to agree with you.
Yes, they have been working on the Marblehead project in San Clemente. Work seems to have stopped there, and a lawsuit has been filed against SunCal Marblehead LLC by Villa San Clemente LLC. Part of the complaint alleges that SunCal Marblehead LLC is insolvent.
SunCal’s other project in south OC, Pacifica San Juan in San Juan Capistrano, seems to be having trouble as well. Hovnanian has abandoned their project called Coastline in Pacifica San Juan. They never built anything more than the 3 models. Their sales office is closed and they’ve hired a real estate agent to sell the models. I’ve also heard that only one of the two John Laing tracts has been selling much of anything.
Marblehead in San Clemente should have been built 13 years ago, but was stopped by all of the NIMBY folks who didn’t want their views disrupted. We were supposed to get a Target there also but everyone shot that down as well. By the time everyone was in love with real estate and the project finally started it was too late. I warned people on this blog about the San Juan homes being overpriced and Talega and Ladera being overpriced and having outrageous Mello Roos taxes. Very few listened, but I am sure now they realize the dire reality of the situation we are in these days. Our whole economy is being destroyed because of the greed of Mortgage companies, realtors, investors and speculators. It is like the food chain everything effects something else and many sectors of our economy are going to suffer as a result of the drastic housing downturn.
My advise. Save money, live below your means, store up food and try to consolidate all of your errands to save money on gasoline. Only buy a house if it is the perfect home for your family and a phenomenal deal with conventional financing. Make sure you have a minimum of 6 months worth of living expenses in savings in case you are laid off. I think the trend for 2009 and future will be smaller, more energy efficient homes. Not only for our eco conscious folks, but because they will cost less to maintain, heat, cool, insure etc. Our recent excesses will be replaced with conservation , frugality and contentment.
Now that SunCal has cleared the Marblehead Coastal site and left it to grow weeds in the wake of their impending bankruptcy, it’s perfect for a tent city. Squatters, unite.
It is true that K. Hov has walked away from the Coastline development. There are about 25 beautiful flat, graded lots (many with incredible ocean views) sitting bare. The street is in, the street lamps are up. Apparently K Hov had options on the lots, and decided to walk away. Must have been a tough decision, after all the sales hoopla and sunk costs involved. The homes were anticipated to sell in the mid 1million range; more recently, they were quoting in the low 1 mill range. Now “poof”. Given the fairly advanced state of the land development, one has to wonder why SunCal and K Hov didn’t renegotiate the deal to keep it moving. Cash flow, anyone?
Don’t forget that Sun Cal had to provide the City of San Clemente with a “Surety” bond to guarantee the completion of the grading and infrastructure. Also Craig Realty Group went to Court and got and injuction against Sun Cal so that they could not draw down the $25million escrow account set up to facilitate Sun Cal doing Craig’s grading and infrastructure. Craig is now in the process of doing it themselves. There is also a hotel that is part of the master plan on the Northeast corner of the property next to the freeway interchange. Monies owed to the City for parks and such should be coming from eventual sales of lots/homes. Yes, they will sell something eventually.
make more money
The owner sat on this property for 54 years and although they will still make money on the sale, they would have made much more if the property came on the market say 2 years ago. Houses similar to this were selling for 400- 500k back in the early 2000…
Are they still in trouble? I heard that they had work out some kind of new plan?