Business

Wednesday, Aug. 13, 2008

Biz Buzz: Building at large Atascadero housing development has come to a stop amid deep financial woes

The company that owns a portion of the development is in foreclosure and owes more than $21 million to lenders

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Las Lomas, a large housing subdivision started in 2003 in south Atascadero, has come to a stop and is in financial trouble. Only 60 or so of the 279 projected homes have been built and occupied, and part of the 100-acre-plus tract is in foreclosure.

Part of the tract is owned by developer Ronald W. Hertel, operating under Atascadero Ventures LLC, and the rest is owned by Trimark Pacific Homes of Westlake Village near Los Angeles.

County records show that Hertel’s firm owes more than $21 million to two real estate lenders: Point Center Financial of Orange County and De Witte Mortgage Investors Fund of Santa Barbara.

Currently 21 lots on Via Cielo, Azor Lane and Monte Verde are scheduled for public auction next month. About half of the to-be-auctioned lots have newly-built, high-end, 3,000-square-foot homes that were on the market—but did not sell — for between $800,000 to $1 million. The rest are vacant.

Hertel and other company representatives could not be reached for comment.

Trimark Pacific bought a portion of Las Lomas from Hertel in 2005. That portion of the project has also stopped, said Kirk Chittick, Trimark Pacific’s vice president of sales and marketing.

Of the 19 homes that his firm has already built, he said four remain to be sold at asking prices around $700,000.

Trimark has stopped building because it “owes the bank more than the houses are worth,” Chittick said.

The company is in the midst of renegotiating its loan on the properties, and Chittick was hopeful the project would not go into default.

Trimark won’t resume building until the market improves, which might be “at least a couple of years,” he said.

As recently as 2006, the company was building 500 to 600 homes a year, primarily in Southern California. This year, Trimark Pacific’s building activity has slowed to about 60 homes, Chittick said.

“We had great plans to grow in Central California, and bought La Terraza (its portion of Las Lomas) from Hertel with that in mind,” he said. “We even were looking to buy more property in Santa Maria and Atascadero, but as the market continued to degrade, it didn’t make economic sense, and we elected not to move forward.”

Hertel has built a number of real estate developments in the county, from a hotel and business park called Avila Village near Avila Beach to the Rancho Obispo housing subdivision in southern San Luis Obispo, some of which was hit with complaints from residents who alleged shoddy construction.

The company was required by the state in 2005 to repair a number of roofs and windows, which were leaking, leading to mold problems.

The pending foreclosure of Hertel’s portion of Las Lomas comes as his firm retreats from real estate business in this county and elsewhere.

Within the past several months, it has shut down its office in Avila Village, disabled its Web site and even put its headquarters building in Ventura up for sale.

Also, its still-current contractor’s license appears to be in peril because of the company’s failure to comply with an unsatisfied civil judgment, according to the State Contractors License Board’s Web site.

Adding to its woes are other North County properties worth millions of dollars that are in default to lenders such as Transamerica Financial Life Insurance Co., Pasadena- based Indymac Bank, a thrift that failed in July, and San Luis Obispo’s Coast National Bank, according to documents filed in the county Clerk-Recorder’s Office.

—Melanie Cleveland

Las Ventanas owners give to cancer center

The South County’s Talley Family, owners of the Las Ventanas housing development in Arroyo Grande and Talley Farms, have pledged $1,000 from each of the first 15 sales of their custom home sites to the Arroyo Grande Community Hospital’s Coastal Cancer Care and Diagnostic Center.

Las Ventanas is founded on a 150-year-old working cattle ranch and offers two-or three-acre parcels of land.

—Tonya Strickland

Framberger company owner receives award

Connie Framberger, owner of Framberger Employee Benefits & Insurance Services Inc. in San Luis Obispo, recently received the Association Achievement Award by the National Association of Insurance and Financial Advisors of the Central Coast. Framberger is a former president of the association. She currently serves as its chair.

—Tonya Strickland