Raw land eyed for a controversial housing development at the mouth of Placerita Canyon is in foreclosure.
Comerica Bank has initiated foreclosure proceedings against Casden Santa Clarita LLC and five other Southern California projects of Beverly Hills-based Casden Properties LLC, saying it’s owed $33.7 million. A foreclosure sale is scheduled for Dec. 21 in Pomona.
Casden LLC – led by Beverly Hills multi-billionaire apartment developer Alan Casden – approached the city of Santa Clarita in 2005 with plans for a mixture of about 800 homes, apartments and condominium units on 95 acres east of Railroad Avenue north of 13th Street. Part of the property has been used since 1994 as a parking lot for the city’s annual Cowboy Festival.
Development was delayed for a variety of reasons. After Placerita Canyon homeowners protested over the density of the project, the city hired consultants to master-plan the 213-acre “North Newhall” area, consisting of Casden’s 95 acres and 44 smaller parcels. Casden agreed to pay half of the $850,000 plan’s cost.
Then the California Public Utilities Commission indicated it wouldn’t approve an at-grade rail crossing at 15th street as called for under both Casden’s original plan and the North Newhall plan.
Meantime, Casden Properties LLC had internal troubles of its own.
Casden brought in Cerberus Capital Management as an investor around the time it started pursuing its six development projects in Santa Clarita, Westwood, West Hollywood, Simi Valley, Oxnard and Ventura.
Casden building at Wilshire & Doheny
Based in New York, Cerberus is one of the nation’s largest private equity firms. It once owned The Newhall Land and Farming Co.’s commercial property through a holding company that eventually declared bankruptcy.
According to a Casden consultant who asked not to be named because he is not a direct employee of the company, Casden was the original managing partner of Casden Santa Clarita LLC and the company’s other Southland development firms. But Cerberus took over as the managing partner when it guaranteed $223 million in loans from five banks including Comerica – with all six Casden properties securing the loans.
The consultant said Cerberus and Casden “came to the conclusion” they weren’t right for each other because the projects were taking too long to get approved.
“Cerberus didn’t want to put them on the shelf,” the Casden consultant said, suggesting that Casden was willing to wait but Cerberus wasn’t.
But now, he said, Cerberus is taking too long to liquidate the partnership and Comerica is tired of waiting for its loan payments.
“Any one property could pay off the loan,” he said, laying the blame for the foreclosure entirely at Cerberus’ feet.
The Cerberus representative in New York who deals with the Casden properties did not return phone calls Monday.
The Casden consultant said the Newhall property is “still a viable site” for development, but it “still needs a turn in the economy” before that can happen.
Over at City Hall, the North Newhall Specific Plan gathers dust on a shelf.
“There are no active development plans being considered for the property,” said Paul Brotzman, the city’s director of community development.