Is Suncal headed for bankruptcy?


I wrote about the financial problems facing SunCal Companies on February 12. Today the O.C. Register finally woke up to the story. Here are a few excerpts from the Register’s article:

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.

During the past four months, liens, lawsuits and land repossessions have been piling up against SunCal Companies, the family-run business that’s behind such developments as Marblehead Coastal in San Clemente and the failed attempt to build 1,500 homes in the Disney resort.

Last Wednesday, Irvine-based SunCal lost a 1,300-acre tract planned for homes and businesses in Sparks, Nev. In a separate foreclosure on Monday, a lender repossessed a north Santa Ana apartment complex. A third auction is scheduled for Thursday on two apartment complexes in Tustin.

In addition, seven lawsuits filed in Orange County since October accuse the company of failing to pay more than $105 million in debts. An eighth action maintains that the company hasn’t completed promised work on a future retail site in the Marblehead Coastal development.

In addition to those filing lawsuits and liens, there are others who haven’t been paid.

Bill’s Sweeping Service of Orange, for example, held off filing a claim even though SunCal owed the firm $25,000 since July. For two years, the sweeping servicekept the streets clean around SunCal’s Del Rio project in Orange as trucks hauled in dirt to convert an old gravel pit into home sites. Then, the company suddenly stopped paying.

Experts said SunCal’s woes are similar to problems faced by other land developers and homebuilders.

For example, Focus Property Group, a major Las Vegas developer, announced on Feb. 4 that it had stopped making interest payments on $500 million in loans, the Las Vegas Review-Journal reported.

Orange County homebuilders Standard Pacific Homes and William Lyon Homes have seen their credit ratings downgraded and have sold off land holdings, often at a loss, to generate cash.

Lennar Homes recently sold 11,000 home sites for 40 cents on the dollar and put development projects in Irvine and Anaheim on hold.

Last month, it said it will build a 45-story luxury condo tower in Century City designed by French architect Jean Nouvel and plans to buy a 1,600-acre Florida property from D.R. Horton Inc. for SunCal’s first acquisition in the Eastern United States.

SunCal wants to build luxury condo towers in this economy? Good grief! Santa Ana Mayor Miguel Pulido is also STILL pimping for more luxury condo towers in Santa Ana. Maybe he doesn’t follow the news?


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"Admin" is just editors Vern Nelson, Greg Diamond, or Ryan Cantor sharing something that they mostly didn't write themselves, but think you should see. Before December 2010, "Admin" may have been former blog owner Art Pedroza.