Friday, September 17, 2010
SunCal Project Sold for $148 Million
By Sean Olson
Copyright © 2010 Albuquerque Journal
Journal Staff Writer
California-based SunCal Cos. lost control of its controversial 55,000-acre development on Albuquerque's West Side on Thursday when the property and related assets were auctioned on the Bernalillo County Courthouse steps for $148 million.
Doug Turner, whose public relations company DW Turner formerly represented SunCal in New Mexico, said it was his understanding that a limited liability company, Western Albuquerque Land Holdings, bought the project.
It is unclear who has a financial interest in Western Albuquerque Land Holdings LLC or what the company plans to do with the property.
SunCal spokesman Joe Aguirre said his company would be happy to remain involved in the project, despite the foreclosure and loss of all the assets.
"We know a sale of the Westland property took place today, and we continue to be interested in remaining involved in the property and seeing our vision for Westland become a reality," Aguirre said.
SunCal bought the property, which was formerly called Westland, in 2007 at a cost of $250 million. Since then, the development company has sunk millions into master planning parts of the large tract of land.
The land was originally owned by the Atrisco Land Grant heirs, who voted to sell the property for the $250 million, some mineral rights and $1 million a year from SunCal toward the Atrisco Heritage Foundation, an organization set up to benefit the heirs.
Creditors — including Barclays, iStar Financial and Five Mile Capital — filed for foreclosure on the property in December to collect more than $180 million in loans for SunCal that were overdue. SunCal had put up its entire development project as collateral for the loans.
The foreclosure came after the loans matured and no new deal was struck between SunCal and its creditors.
SunCal's subsidiary company in New Mexico, which controlled the project, filed for bankruptcy after the foreclosure was filed in court, but it was dismissed.
SunCal was a divisive presence in New Mexico, with some lawmakers and West Side activists rallying against the company for what they claimed was going to be a sprawling development.
But officials with the company promised the development would be a quality, master-planned community that would mean new jobs and revenues for the state. The development would have included space for residential, retail, office, industrial and recreational uses.
A tax incentive, known as a tax increment development district — or TIDD — that would have allowed SunCal to divert tax revenues from within its development to cover costs of infrastructure, was denied by the Legislature in 2009.
After the loss of the incentive, the project went into a holding pattern. No business tenants were found for the industrial section of the project, which SunCal had said would be the key component in getting the project off the ground.
SunCal has had problems with developments in other parts of the country.
The company's various LLC corporations have defaulted on at least $184 million in loans in California and Nevada.
A spokesman for the company has blamed many of those foreclosures on its former financial partnership with Lehman Bros., an investment firm that collapsed in 2008. Lehman Bros. was not a partner in the New Mexico project.