North L.A. Sprawl not a done deal...

Obama's EPA shows Backbone in Newhall Ranch fight

excerpted from:
http://www.latimes.com/news/local/la-me-adv-newhall-epa-20110202,0,6039644.story

2/3/2011--A project to build a community of 60,000 residents along the last wild river in Southern California has sparked a feud between two federal agencies over plans to alter areas crucial to California condors and convert nearly 20 miles of waterways into concrete drains and levees.

The U.S. Environmental Protection Agency questions whether the U.S. Army Corps of Engineers, which is set to permit the Newhall Ranch construction 35 miles northwest of downtown Los Angeles, has adequately considered the threat of flooding caused by building in the flood plain of the Santa Clara River or its effects on water quality, tributary streams, Native American burial sites and an array of rare and endangered plants and animals.

The corps is expected to issue a Clean Water Act permit this month authorizing the developer, Newhall Land, to use 20 million cubic yards of excavated soil to fill in wetlands in areas to be developed over the next 20 to 30 years on the 12,000-acre ranch.
Of particular concern to the EPA are plans to fill in much of Potrero Canyon, which includes a rare alkali wetlands and roosting and foraging grounds for endangered California condors. Developers would also convert nearly 20 miles of tributaries and riverbank into storm drains and levees, which the EPA contends could increase flood risks to ranch residents and downstream communities, including Ventura and Santa Paula.

"We are not trying to stop this project, just modify it," said Eric Raffini, an environmental scientist with the EPA's wetlands regulatory program in Southern California. "We do not believe it is appropriate to put people in that flood plain, and we are proposing that they reduce the project footprint by about 80 acres in Potrero Canyon."

"We are prepared to elevate this case, if necessary, to our headquarters in Washington for review, which could result in a veto of the project," Raffini said.

Under the Obama administration, the EPA has overruled the Corps of Engineers before, notably in the EPA's decision to require that the Los Angeles River be managed as a navigable waterway from its source in the west San Fernando Valley to its mouth in Long Beach. That subjects the river and its tributaries to the tight strictures of the Clean Water Act...

...The corps is studying alternative proposals, including one that "would avoid all of Potrero Canyon," Allen said. But he noted that the corps has jurisdiction over only seven of the 109 acres of flood plain in dispute. "So the developer could still develop a lot of it without our permit," he said.

"Do I believe these issues will reach the point where the project will be stopped?" asked Emile Haddad, president and chief executive of Five Point Communities Management, a real estate management company owned by Haddad and Lennar Corp., one of the nation's largest homebuilders. "No. I want to find a solution. I'm a person who can sit down and make a deal. If the EPA's biggest problem is 80 acres and about 500 homes, we'll get rid of them. Done."

It may take more than that to satisfy the EPA...

New Newhall Land EIR is Out

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Bankrupt Newhall Land Seeks Approval of EIR from Feds and State Fish and Game for 20,000 homes along the Santa Clara River in North L.A. County

They seek to destroy habitat for the once-extinct San Fernando Valley Spineflower (extinct until it was found at Newhall Ranch, despite the landowner's best efforts to cover it up.) The development plans were approved by L.A. County's supervisors in 2003, but permits must also be given by the state and federal governments as the project sits on prime wetlands and endangered species habitat.

Newhall Land was sold to Lennar Corp. and LandSource soon afterward, and they defaulted on a $1 billion loan last year.

read more:
http://www.cuddyvalley.org/blogs/nimby/?p=331

the group that sued them:
http://scope.org/


the EIR is here:
http://www.dfg.ca.gov/regions/5/newhall/docs/

Public comments are due by June 26, 2009
and all the information about where to write is on the website.

email addresses of the places to send comments are:
U.S. Army Corps of Engineers
Attn: Aaron O. Allen
Aaron.O.Allen@usace.army.mi


California Department of Fish and Game
newhallranch@dfg.ca.gov

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A Public hearing will be held June 11, 2009 at 6:30 PM at Rancho Pico Middle School, located at 26520 West Valencia Blvd. in the western Santa Clarita area.

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An Update on L.A. Developments from the Sierra Club

1/2009

San Gabriel Valley Task Force
http://angeles.sierraclub.org/environmental/CampaignsLAC_SanGabrielRiver.asp

A proposal that has Task Force attention is the Pacific Heights Housing development planned for Hacienda Heights. This project proposes to build 47 homes on 114 acres of open space in the Puente Hills. The property is adjacent to Schabarum Regional Park on the east and open space of the wildlife corridor managed by the Native Habitat Authority to the South. If permitted, 126 oak trees as well as a grove of sycamore trees will be removed and there will be extensive modification of the topography. The property is included in an SEA and is deemed a fire hazard area by the State. The Task force favors purchase of this property and its addition to the local wildlife corridor as land under management of the Native Habitat Authority in the Puente-Chino Hills. A resolution was submitted to and approved by the Conservation Committee supporting the preservation of this land. A letter has been submitted to the Los Angeles County Planning Commission asking for delay of approval of the DEIR (expected to be submitted by the developer in December) until release of the revised Hacienda Heights Community Plan (expected in January, 2009). Contacts have been established with the Puente-Chino Hills Task Force of Sierra Club, the Hacienda Heights Improvement Association, the Native Habitat Authority, and local residents, all groups with potential interest in stopping or modifying this development.

Another project we are currently interested in are plans to be developed for preservation and development of Cattle Canyon located in the San Gabriel Mountains for recreation by the Watershed Council. Letters of support have also been sent by the Task Force to Rivers and Mountains Conservancy supporting grants to the City of Duarte and City of El Monte for trail projects within the Emerald Necklace. Visits to the sites of these projects were made by members of the Task Force prior to submission of letters.

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Save the Montebello Hills Task Force


http://angeles.sierraclub.org/environmental/CampaignsLAC_MontebelloHillsTF.asp

In 2008 the Save the Montebello Hills Sierra Club Task force remained very active and faced numerous new challenges as the city began preparing the draft EIR for the developer's proposed 1200 dwelling unit project on the last remaining open space Montebello Hills. Challenges facing us in 2009 include the release of the city's draft general plan and the release of the draft EIR for the Montebello Hills Specific Plan. In addition to responding to those events, we will continue with our outreach and public notification activities as well as with our numerous other activities in this effort as listed above.


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The Santa Monica Mountains Task Force:

1) COASTAL SLOPE TRAIL – Joined with the Santa Monica Mountains Trails Council and several local conservation and trails groups to appeal to the Malibu City Council the Malibu Planning Commission’s approval of a subdivision on the crest of a very scenic coastal mountain and its refusal to require the developer to dedicate a key segment of the proposed Coastal Slope Trail. Outcome: we refused to make concessions demanded by the developers and were successful in persuading the City Council to require an EIR for the subdivision. The developers, a world famous rock group, ultimately abandoned the project.

2) CORRAL CANYON – Supported the use of Proposition 84 funds by the Santa Monica Mountains Conservancy and State Parks to purchase 800 acres of Corral Canyon in Malibu, designated by the Chapter as a high priority park acquisition in 1995. Outcome: the land has been purchased. Over two-thirds of the Corral Canyon watershed is now in public ownership.

3) SOKA/KING GILLETTE – 600 acres of oak woodlands and meadows is a spectacular mountain setting recognized by all park agencies as the premier site for a visitor center and interpretive facility for the Santa Monica Mountains park system. The Task Force and the Chapter took a lead role in the struggle to block major urban development here and find the funding to acquire this very costly property. It was a long struggle that included successful lawsuits against Los Angeles County and the Coastal Commission, but we finally prevailed when the land was acquired three years ago by a consortium of the National Park Service, State Parks, and the Santa Monica Mountains Conservancy. The park agencies have now started the process of public outreach and planning for future uses of this crown jewel of the Santa Monica Mountains. The Santa Monica Mountains Task Force is taking a major part in these planning sessions to ensure that the 4000 oak trees on the property and the abundant and very visible wildlife are protected, but also to ensure that the highest and best use of the property remains as an overnight outdoor education facility for urban schoolchildren. Outcome: this planning process is just beginning this week, and will take up a lot of our attention in coming months.

4) TRANCAS LAGOON – We are supporting efforts by park agencies to acquire 7 acres just north of Pacific Coast Highway at the mouth of Trancas Canyon in West Malibu which will help protect and restore a small wetland and provide a trail linkage between heavily used Zuma County Beach and the National Park Service’s 7000 acre Zuma-Trancas unit in the mountains to the north. The property is a 1995 Chapter priority acquisition and a National Park Service priority for acquisition. The Santa Monica Mountains Task Force has sent letters to the Santa Bay Restoration Commission and the State Rivers and Parkways Grant Program urging them to allocate Proposition 84 funds to acquire the 7 acres. Outcome: this matter is still pending.

5) MALIBU VALLEY FARMS – The Task Force submitted lengthy testimony to the Coastal Commission this year and last year opposing Coastal Commission approval of a large, open-ended horse facility virtually on the very banks of a stream draining directly into Soka and Malibu Creek State Park. This approval violates water quality and riparian habitat protection policies in the Coastal Act and the Local Coastal Plan, but the Commission approved it nonetheless. The Santa Monica Mountains Task Force has offered to help finance litigation to overturn this outrageous decision and to assist efforts to persuade the Coastal Commission to revoke the permit approval.

6) TEMESCAL CANYON – This canyon in Pacific Palisades is the most heavily used trail access into the Santa Monica Mountains from the Los Angeles Basin. Public access is now threatened by aggressive, pre-existing private uses. The Task Force has testified in support of restricting these private uses in order to maintain pubic trailhead parking and trail access from the Basin into the Mountains.

7) TRAIL ACCESS – Subdivision and mansion development has long threatened to block trails which have historically provided hikers access to various parts of the Santa Monica Mountains. The Task Force has taken a lead role in efforts to keep these trails open to the public, specifically in the Westwood area.

8) LOWER TOPANGA – The Task Force was active a few years back in supporting acquisition of this valuable property by CA State Parks. Throughout this year, our Task Force volunteers have spent many hours/days removing non-natives from this land, watering the new plantings, and joining in clean-up efforts. This activity is on-going.


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Santa Clarita Group

http://angeles.sierraclub.org/scg/

2008 has been a year of great success for the Santa Clarita Valley Group.

NEWHALL RANCH: Members began the year organizing letter-writing campaigns and trips to the Los Angeles Planning Commission to voice concerns regarding the looming threat of the proposed Newhall Ranch. Although, the proposed Newhall Ranch project was not stopped — it has slowed down. This is especially true considering how the company backing this proposed development has fallen into extreme economic troubles. We have high hopes that this will translate into a serious delay of the project and more time to continue negotiating for smart growth.

LAS LOMAS: We were also thrilled to see the years of work to stop the Las Lomas project pay off. Working with other Sierra Club members in the San Fernando Valley, we met with numerous neighborhood councils to explain reasons to NOT support the builder's project. We were also part of building a large coalition consisting of elected officials, individuals, neighborhoods, and groups to oppose the project. The proposed Las Lomas development would have sat in the Newhall Pass at the northeast corner of the Interstate 5 and State Route 14 interchange and would have been the epitome of SPRAWL. The 555-acre housing and commercial development project would have dramatically increased traffic congestion in Newhall Pass and would have destroyed a major wildlife corridor. With the additional concerns of building in a Fire and Earthquake Hazard Area, air quality, etc. the Los Angeles City Council, led by Greig Smith, stopped the Las Lomas project from moving forward.

TEJON RANCH: Also, members of the Sierra Club (Angeles and Kern-Kaweah chapters), Audobon, NRDC, Endangered Habitats League, and the Planning and Conservation League worked together with the Tejon Ranch Company in a rare opportunity to preserve one of the most valuable unprotected natural resources in the state. Tejon Ranch, the largest contiguous privately owned portion of land left in California will now have an unprecedented 90% of its breathtaking scenery conserved for the future. Joel Reynolds, senior attorney and director of the Southern California Program of the NRDC stated, “This was an extremely complicated deal, but also a once-in-a-lifetime conservation opportunity.” Additionally, this agreement creates an independent 12 member Tejon Ranch Conservancy. These environmental partners will manage the preserved land in perpetuity.

SOLEDAD CANYON MINE -- CEMEX CORP.: We also successfully passed a motion recommending that the Angeles Chapter of the Sierra Club support HR 5887 (McKeon), the Soledad Canyon Mine Act. In 1990, contractual rights to mine a site in Soledad Canyon for sand and gravel was granted by Bureau of Land Management (BLM). These would permit the current owner of the contracts, CEMEX, to extract 56 million tons of sand and gravel from the site over a maximum of 20 years. The City of Santa Clarita was joined in opposition by the Santa Clarita Group, as well as many other groups and organizations. Many lawsuits ensued over CEQA compliance, including air quality, nearness of local schools and housing, traffic and road damage, contamination of the Santa Clara River and local aquifers, and quality of life issues. This solution was crafted by the Secretary of the Interior, the City of Victorville, the City of Santa Clarita, and CEMEX. The bill will cancel CEMEX’s two existing Soledad Canyon mining contracts with the BLM. At the same time it will fairly compensate CEMEX by providing the company with designated BLM land of equal value in the Victorville area. No mining will be allowed on these Victorville sites. After receiving the land near Victorville, CEMEX has agreed to sell the land to the City of Victorville to be developed in accordance with local land use and economic development goals. We are actively working for passage of this bill which will be reincarnated next year.

WILDERNESS PROTECTION: We are also continuing to work on the Eastern Sierra wilderness Bill. Members have worked in the community to increase awareness, as well as lobbying in Washington DC. This bill will permanently protect over 470,000 acres wilderness and 52 miles of wild & scenic rivers in the Eastern Sierra and San Gabriel Mountains. We are still hoping for passage this year. Another accomplishment of our group has been our continued work in the community. Many of our programs have been informational on local issues, such as MRFs, land use issues of the local hospital expansion, and Tejon Ranch. Our group also participates in community events such as the Annual River Rally, College of the Canyons Environmental Awareness Day, and partners with the local Community Hiking Club (offered through the Placerita Nature Center). We are constantly working to introduce families and members of the community to the joys of hiking an protecting nature. For year 2009 we anticipate continuing to push the Wilderness and CEMEX bills in Congress in addition to fighting a number of proposed developments.

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With Some Big Builders in Bankruptcy, Is it Time for the State's Land Conservancies to Buy Choice Parcels?

Here's a good report from a builder's and mortgage blog. Geez, it would be GREAT if the conservancies could come up with the funds to buy that Stevenson Ranch parcel and Newhall Ranch. We will never have an opportunity like this again. I hope they have made contact with Barclays Bank Representatives. The bank may be very willing to relieve itself of this outlying raw land and Stevenson Ranch with no water is virtually undevelopable. There are many graded lots in Santa Clarita much closer in that will undoubtedly take care of the market for many years.

from: Lynne Plambeck, President, Santa Clarita Organization for Planning and the Environment

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LandSource's DIP Lender Files Liquidating Ch. 11 Plan
Posted: Wed Oct 15, 2008 4:14 am

http://implode-explode.com/forum/viewtopic.php?t=85640&sid=919f3c1a4f63f4c39a585fa31a86100b

LandSource, the raw land and lot holding company owned by CALPERS and Lennar, has been a Chapter 11 debtor since June 2008. At the time of its bankruptcy filing, LandSource owed nearly $900 Million on a syndicated mortgage loan managed by Barclays Bank. Barclays and some of its syndicate members rolled up the loan into a $1+ Billion DIP loan due in June 2009.

On 10/13/08 Barclays Bank, as lead lender for the participants in the DIP loan, filed a proposed Chapter 11 Plan of Reorganization for LandSource. It is a liquidating plan, as was predicted on the record, in the Bankruptcy Court, by counsel for the Committee of Unsecured Creditors when the terms of the DIP loan were argued.

In the Liquidating Plan, Barclays Bank proposes that a Plan Administrator be appointed, who would conduct an auction of all of LandSource's assets 120 days after the Court approved the Liquidating Plan. Barclays reserves the right to credit bid for all or part of the debtor's assets. Barclays proposes that the Plan Administrator then sell any assets remaining after the auction in the ordinary course.

So far, neither the debtor nor the Committee of Unsecured Creditors have filed a competing plan. It would be tough to draft a credible competing plan, without Barclays and its participants cooperation, given the need to find a source to refinance the $1+ Billion DIP loan due in June 2009.

At the height of the real estate boom, LandSource's real estate was valued at $1.8 Billion. In open bankruptcy court, various parties have alleged that same real estate is now valued at $750 Million.

Among the real estate proposed to be auctioned:

--Newhall Land & Farming's remaining residential and commercial land in Valencia, California
--A brand new TPC golf course in Valencia, California
--Newhall Land & Farming's farm land in California's Central Valley and Ventura County
--Newhall Land & Farming's Newhall Ranch, which has conceptual planning approvals but no approved plat maps, no Army Corps permits and no California Fish & Game permits
--A huge, mountainous tract constituting the remainder of Lennar's Stevenson Ranch project, which has no water entitlements
--A high rise apartment building under construction in Marina del Rey, California
--The massive Bressi Ranch in San Diego County, California
--A large ranch in Moorpark, California
--Lennar's Mare Island military base redevelopment project on San Francisco Bay, a project with significant hazardous materials contamination yet to be remediated
--Land in the Friendswood area of Houston
--Miscellaneous land in Las Vegas
--Miscellaneous land in several states formerly owned by MW Housing Partners III, a CALPERS investment vehicle designed as a "land bank" for Lennar, before the LandSource venture between CALPERS and Lennar was created

Barclays Bank cannot expect that there will be any cash buyers willing to pay a reasonable price for these huge pieces of real estate at auctions held in 2009 by a Chapter 11 Plan Administrator.

Title to the properties will undoubtedly end up in an entity created by Barclays Bank and its loan participants....unless the Treasury wants to spend $750 Million in TARP funds to acquire this "prime" development land.

Barclays Bank's plan to auction these vast tracts of land brings to the forefront the question of what will happen to the hundreds of thousands of residential lots throughout the country which exist on paper, or in partially developed state, or are completed and weed covered.

The business of "land development" for massive housing tracts built by national homebuilders will not recover for years and years and years.

_________________
Aristotle

As Yogi Berra said "It's like deja vu all over again.

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MORE POSTS ON THIS TOPIC:

http://implode-explode.com/forum/viewtopic.php?p=68167

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L.A. Chapter of Native Plants Society Updates Us on North L.A. County Developments

From their July-August Newsletter

Newhall Ranch Development Update

http://www.lasmmcnps.org/PDF/julaug08.pdf

BY ILEENE ANDERSON

I'm honored to represent the CNPS on the Friends of the Santa Clara River Board of Directors. The Friends was formed fifteen years ago as a mechanism for achieving greater conservation on the Santa Clara River, the largest free-flowing river not on a military base in Southern California (the Santa Margarita is primarily on Camp Pendleton). The Santa Clara River flows from its headwaters near Acton in Los Angeles County to the Pacific near Oxnard in Ventura County. Significant efforts are being made in Ventura county to secure open space along the river…unfortunately the same can not be said in Los Angeles County.

One of the big issues that the CNPS has been working on for years along the Santa Clara River is the Newhall Ranch development. The Los Angeles County specific plan was rubberstamped in 2003 and would allow four different “villages” for a total of 21,000 houses to move forward through the environmental review process. The beautiful oak savannahs, sage scrub and riparian communities behind Magic Mountain west to the County line could potentially be another cookie-cutter housing tract.

However, maybe not…the first “village” currently called Landmark Village is in the environmental review process. It would channelize the Santa Clara River and impact significant riparian resources. At the last planning commission hearing, the commission sent the project back for additional work…mostly on schools and traffic. That was a year ago and the project has not yet resurfaced. The next “village” currently called Mission Village would heavily impact the San Fernando Valley spineflower (Chorizanthe parryi var. fernandina) a diminutive plant thought to be extinct until it was rediscovered in 1999. You'll recall that Newhall Ranch got its hand slapped for lying to the California Department of Fish and Game (DFG) about the spineflower's existence (they denied it), until CDFG obtained a search warrant and caught Newhall Ranch red-handed trying to graze the plant with cows…presumably into oblivion. Out of this debacle, the spineflower got a 62 acre reserve, although the plants cover a much vaster area.

Now, with the housing market “in the tank”, and filling gas tanks for commuters taking a large bite out of the family budget, developing a new city on the fringe of the suburbs is not feasible right now.

Recently, the Newhall Ranch developers took another big hit. Newhall Ranch development is owned by parent company LandSource Communities Development and is heavily invested in by The California Public Employees' Retirement System, CalPERS. In May, LandSource defaulted on its loan payment to CalPERS according to the Los Angeles Times. Environmental organizations had warned CalPERS through a letter writing campaign in 2007 that investing in Newhall Ranch was a bad idea…and we were right. Now, retired California employees are bearing the brunt of investing in an ill-conceived boondoggle of a project.

But there is a silver lining the environmental groups are currently working hard to get a bail-out for CalPERS through a buyout of the Newhall Ranch – a buyout for open space
conservation. Please write your state legislators, Secretary of Resources etc. and ask them to consider buying out Newhall Ranch to save not only a classic piece of California landscape bursting with exquisite native plants and plant communities but also California
retirees from financial hardship in their golden years.

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SANTA SUSANA FIELD LAB ENVIRONMENTAL IMPACT STATEMENT NOTICE

The Dept. of Energy (DOE) has issued a notice of intent to prepare an EIS for remediation of Area IV of the Santa Susana Field Lab (SSFL) and conduct public scoping meetings. The public scoping period began on May 16, 2008 and will continue until Aug. 14, 2008. Local public scoping meetings are scheduled in Simi Valley at the Grand Vista Hotel, 999 Enchanted Way, July 22, 2008, 2 pm – 4 pm and 6:30 pm – 9:30 pm; and in Northridge at the World Vision Church, 19514 Rinaldi St., July 23, 2008, 2 pm – 4 pm and 6:30 pm – 9:30 pm. The SSFL located on approximately 2852 acres in the hills between Chatsworth and Simi Valley is a site where Rocketdyne conducted rocket testing and operated nuclear reactors from 1947 to 1988. A nuclear accident in July 1959 caused the release of radioactive gases. DOE is preparing an EIS to evaluate cleanup alternatives for the site. In addition to the public health concerns regarding the cleanup, there are implications for impacts to ecological resources that are on the SSFL site including endangered and protected species such as Braunton's milk-vetch, Santa Susana tarweed, Southern California black walnut and mariposa lilies. DOE expects to issue a draft EIS in early 2009 with a period for comments and the final EIS in fall 2010. Further information is available at Written comments should be addressed to Ms. Stephanie Jennings, NEPA Document Manager, U.S. Department of Energy, P.O. Box 10300, Canoga Park, CA 91309, Express Mail Delivery Address: 5800 Woolsey Canyon Road, Canoga Park, CA 91304.

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Tejon Ranch Agreement Preserves 240,000 Acres

The Sierra Club, Natural Resources Defense Council, Audubon California, the Planning and Conservation League, and the Endangered Habitats League agreed not to oppose the proposed development on the remaining ten percent of the Ranch. The agreement announced on May 8 will preserve habitat for threatened and endangered species in an area that marks the intersection of the Sierra Nevadas, the Coastal Range, the San Joaquin Valley, and the Mojave Desert, protecting mostly animals (California condor, etc.), but including the striped adobe lily and Bakersfield cactus. However, CNPS is concerned about the fate of the existing wildflower fields that would be likely displaced by the two large proposed developments.

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Newhall Ranch Owner Goes Bankrupt;
One of two largest land owners in L.A. County

CalPERS-backed LandSource files for Chapter 11
From L.A. Times Staff and Wire Reports

June 10, 2008

A California real estate partnership that the California Public Employees' Retirement System poured about $1 billion into has filed for Chapter 11 bankruptcy protection.

LandSource Communities Development's assets include 15,000 acres of undeveloped land in the Santa Clarita Valley, among the largest land deals to falter amid the national housing glut. The land was appraised at $2.6 billion at the time of the CalPERS investment, but has dropped considerably in value since then.

CalPERS, the nation's biggest pension fund, provides pension, healthcare and other retirement services for about 1.5 million public employees. CalPERS did not immediately return calls Monday. Last month, its president, Rob Feckner, told the Los Angeles Times he hoped to forestall a bankruptcy filing but stressed that "if we incur any losses, they will be minor" because the pension fund is "very well diversified, in good shape."

LandSource issued a news release late Sunday to announce its filing in U.S. Bankruptcy Court in Delaware.

Santa Clarita-based LandSource had been trying for months to restructure a $1.24-billion debt, the company said. It received a default notice on April 22 after missing a payment when a decline in the assessed value of that northern Los Angeles County land holding triggered an additional charge.

"LandSource believes Chapter 11 provides the most effective means for the partnership to preserve the values of its business . . . while it works with creditors to achieve a long-term restructuring," spokeswoman Tamara Taylor said in the release.

Attempts to reach Taylor and LandSource were unsuccessful.

LandSource operates in California, Arizona, Florida, New Jersey, Nevada and Texas.

The partnership announced that it had received a $135-million line of credit from a group of lenders led by Barclays Bank, allowing it to fund operations during the Chapter 11 period.

CalPERS, with $254.8 billion in assets, is involved in LandSource through its participation in MW Housing Partners, an investment fund managed by MacFarlane Partners.

MW Housing Partners acquired 68% of the Santa Clarita property, along the Interstate 5 corridor 30 miles north of Los Angeles, from home builder Lennar Corp. and LNR Property Corp., a unit of Cerberus Capital Management.

Lennar and LNR each maintained a 16% interest in LandSource.
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a comment on the Times' website reveal more:

http://latimesblogs.latimes.com/laland/2008/06/bankruptcy-for.html

About 2 weeks ago, Standard & Poors reported that LandSource, Newhall Land's parent company, had $25 Million in cash left in their bank accounts. Standard & Poors had conducted a 'private audit' of LandSource's financial condition at the request of LandSource's mortgage lender, Barclays Bank. So the $25Million cash was real, not funny money.

Yet, in filing Chapter 11, LandSource and Newhall Land chose to royally scr*w all of their California trade creditors by not paying them, even though that $25 Million is cash was available. Now, these local companies are unlikely to ever be paid.

Adding insult to injury, LandSource and their mortgage lender have done a prepackaged Debtor In Possession financing, which is scheduled to be approved at 10AM on Tuesday 6/10, without any meaningful notice to the unsecured California trade creditors, since the bankruptcy was filed in Delaware even though the vast majority of the assets, and all the major unsecured creditors, are in California.

Showing their contempt for their unsecured creditors, LandSource also had the nerve to create a creditors notice website at www.kccllc.net/landsource and purport to provide copies of all of the bankruptcy petitions for the 21 entities, BUT they conveniently left off the most important bankruptcy petition, the one for the parent company LandSource Communities Development LLC.

So the California unsecured creditors who were stiffed should be asking "Where did the last $25 Million go?" From the unsecured creditors schedules on the actual bankruptcy petitions, here are just some of the local companies stiffed by LandSource:

PCL Construction, Glendale, $6,060,480
Park West Landscape, Pacoima $1,245,062
Oak Ridge Landscape, North Hills $`,056,303
Hunsaker & Assoc., Valencia $905,156
Psomas & Assoc., Santa Clarita $816,033
John Burgeson Contractors, Canyon Country $800,157
RC Becker & Sons, Santa Clarita $800,151

There are many more local service providers and contractors from Ventura County, Orange County and LA County south of Mulholland also cheated out of what was due them, while the $25 Million was frittered away, or horded to pay Newhall Land's generous employee payroll and benefit package. See the schedules to the bankruptcy petitions at the website established by LandSource at http://kccllc.net/landsource

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Newhall Land Company Owner's $1 Billion Loan Default Cuts into Public Employee Retirement Fund; Firm Owns 15,000 Acres North of the L.A. Sprawl Where they Have Proposed 20,000 Homes

(to learn more about this development , go to http://scope.org)

CalPERS-Linked Land Partnership Gets Default Notice

MICHAEL CORKERY

April 26, 2008; Page A3
http://online.wsj.com/article/SB120916479361446151.html?mod=wsjcrmain

A large California land partnership involving one of the largest U.S. pension funds has received a notice of default on a $1 billion loan after failing to meet certain terms of its lenders.

LandSource Communities Development LLC, a partnership that involves the California Public Employees' Retirement System, received the default notice Tuesday, amid talks to restructure $1.24 billion of debt. The partnership, which owns 15,000 acres in Southern California, had received an extension to meet its current loan terms, including a required payment, but the deadline expired on April 16. The default notice applies to about $1 billlion of the total debt.

LandSource spokeswoman Tamara Taylor said that the default notice won't accelerate the company's debt payments and that negotiations with lenders are continuing.

Hundreds of lenders, including banks and institutional investors, hold the syndicated debt. Barclays Capital arranged the financing in early 2007. At the time, LandSource's assets were appraised at $2.6 billion.

Partnerships such as LandSource were a common way to own and develop land during the housing boom. They provided high returns to investors and lenders and a way for builders to keep highly leveraged land off their books. But the ventures have run into trouble as the value of undeveloped land has plummeted and as demand for new homes has eroded.

MW Housing Partners, which includes Calpers, took a 68% financial stake in LandSource in early 2007 amid the slowing housing market. Cerberus Capital Management's LNR Property Corp. unit has a 16% stake, and home builder Lennar Corp. has a 16% stake. Lennar and LNR operate the management of LandSource. None of these equity partners is liable for the debt if LandSource defaults. Calpers and Cerberus representatives declined to comment.

One problem with ventures such as LandSource is that they typically require builder partners to acquire land on a schedule, even if they don't need the lots. They also can require partners to contribute more equity if the land's value falls below a threshold.

LandSource's trouble followed mounting stress at two large joint ventures in Las Vegas, called Kyle Canyon Gateway and Inspirada, involving many of the nation's largest home builders. One partner in these ventures said Friday that it is unlikely that it will meet its obligations to the deals. The partner, home builder Kimball Hill Homes, announced Wednesday that it had filed for Chapter 11 bankruptcy protection.

CalPERS Takes Hit on Land Deal
In a Rare Misstep, Pension Fund Trips On Real-Estate Bid

By MICHAEL CORKERY and CRAIG KARMIN, Wall Street Journal
May 1, 2008
http://online.wsj.com/article/SB120960362036258063.html?mod=wsjcrmain

The nation's largest pension fund is involved in one of the biggest land deals to fall victim to the housing bubble. It is an unusual position for the investor, which has a reputation for avoiding such blowups.

The deal involved a $970 million investment by an investment entity that included the California Public Employees' Retirement System in a venture that owns thousands of acres of undeveloped residential land north of downtown Los Angeles. Now, due to the downward spiral of the housing market, Calpers may find itself having to relinquish the well-located land to creditors and possibly lose much of its investment.

Pension funds have been players in the property market stretching back to at least the 1970s and have recently pursued more-complex real-estate investments. Land investment remains rare among these large institutional investors.

Calpers, a $244 billion fund, did its first undeveloped land deal in 1994 and today has seven partners for such deals and investments in more than 12 states.

"Land is the riskiest form of speculative real estate," said Paul Puryear, a housing analyst at Raymond James & Associates. "That's why you have such huge swings in value." Selling land to home builders can yield huge profits. But when demand from builders stall, land can lose value quickly because there are few other ways to generate income from it. "Maybe you can put cattle on it and wait until people can afford to buy houses again," Mr. Puryear said.

At the time of Calpers's investment, February 2007, the venture was appraised at $2.6 billion. The value of that venture, whose backers included the builder Lennar Corp. and LNR Property Corp., a unit of Cerberus Capital Management, is now much less.

The venture, LandSource Communities Development LLC, had assets valued at $1.8 billion as of the end of February, according to a filing with the Securities and Exchange Commission, but debt of about $1.24 billion. LandSource also is under siege by debtholders. The venture is running low on cash and may have to file for bankruptcy in coming weeks, according to a person involved in the venture. Still, while creditors could take ownership of LandSource's land and other assets, they have little other recourse against Calpers, LNR or Lennar.

The deal could prove a rare public misstep for Calpers, which had nearly $21 billion of real-estate investments at the end of September, or about 8% of its total assets, and is one of the largest land owners in the country. Calpers's investment in the LandSource deal represents less than 1% of its total assets, and the rest of its real-estate portfolio has performed well, with a 12.4% nominal return after fees for the 12 months ending Sept. 30.

In that portfolio, some deals have suffered deep losses. M/W Housing Partners III LP, which includes the LandSource investment, had a return after fees of negative 53.6% for the year ending in September. Another deal, Hearthstone Housing Partners II LP, lost 40.2% in that period.

Rob Feckner, Calpers board president, said for a portfolio as big and diverse as the fund's, some losses were to be expected. "Real estate is a very cyclical business, especially right now," he said in an interview.

Details of the soured land deal are emerging amid upheaval in Calpers's executive suite. The chief executive, Fred Buenrostro, said this week he planned to step down. Last week, Russell Read, the chief investment officer, announced his resignation. People familiar with Calpers said the moves don't appear to be related to the LandSource deal.

The venture is structured similar to dozens of deals that were popular ways for builders like Lennar to buy highly leveraged land during the boom years and reduce the risk of owning the land outright. They would buy the land with partners in off-balance-sheet entities that would borrow money while limiting the builders' exposure to the debt. Many of these deals are unraveling.

The LandSource deal has the twist that the Calpers investment vehicle took a significant stake in the venture, amid the slowing housing market and months before real-estate values plummeted. MW Housing took a 68% stake in LandSource in February 2007, while Lennar and LNR reduced their exposure, each taking a 16% stake and each receiving $660 million after bringing MW Housing into the venture.

MW Housing was co-managed by MacFarlane Partners, a veteran manager of Calpers money, with $11.7 billion in real-estate assets under management. In recent years, MacFarlane has invested as much as $4 billion from Calpers in real-estate projects, such as the Time Warner Center and the Tribeca Green, a 24-story apartment building, both in New York City.

LandSource's California assets are prime real estate. They include some of the only undeveloped acreage in the greater Los Angeles area, about 15,000 acres known as Newhall Ranch lands.

MacFarlane recommended the deal because the land was located in an area with "long-term growth prospects" and investors would realize returns over 12 to 15 years, according to a person familiar with the matter. At the time, MacFarlane anticipated a slowdown in the real-estate market and obtained an independent appraisal of the land as part of its due diligence.

Shortly after Calpers made its investment, Barclays Capital arranged about $1.5 billion in loans for LandSource, which were snapped up by more than 100 investors. The March 2007 offering was oversubscribed.

LandSource's plan was to sell hundreds of ready-to-go house lots to builders to generate cash to service the debt, while the Newhall land was prepared for development, which could take years.

Once the credit crunch hit, demand for the lots evaporated, and the venture was left with less income than it expected.

Negotiations over debt restructuring between LandSource and its lenders are continuing. LandSource recently pulled back from a proposal to contribute several hundred million dollars of additional equity.

LNR didn't respond to a request to comment.

Lennar's chief investment officer, Emile Haddad, who is a managing member of LandSource, said the builder has an "excellent" relationship with Calpers. "These are tough times for all of us," he said. "It's during these times that relationships get tested."