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Bolsa Chica developer files for bankruptcy
October 28th, 2009, 7:52 am · 41 Comments · posted by Jeff Collins
The builder of the 356-home Brightwater housing project overlooking the Bolsa Chica wetlands announced today that it has filed for Chapter 11 bankruptcy, seeking to gain more time to repay $182 million in debt due by next spring.
Irvine-based California Coastal Communities Inc. spent decades getting approvals to build homes in the environmentally sensitive beach-view site, only to begin construction just as the housing slump was gaining steam.
The company rebuffed stockholder attempts to get the firm to sell Brightwater before its value plummeted, saying it wanted to bring the project to fruition itself. Since then, the company has said, sales have been insufficient to generate enough cash to repay lenders.
The company defaulted on loan payments due on Sept. 30 and defaulted again two weeks later.
The company’s Web site posted a press release today stating:
“We have been negotiating for some time in the hopes of getting 100% of our syndicate lenders to agree to extend the maturity dates and change the repayment schedules so we could repay the debt in full in 2013 based on our current expectations for home sales over the next four years. Unfortunately, without unanimous approval we have no viable alternative but to restructure the debt through the voluntary reorganization process we are pursuing.”
The financial crisis has made negotiating through the courts commonplace, the statement added. Meanwhile, the company vowed to continue “business as usual during the reorganization process.”
“(We) anticipate no interruption in our homebuilding or sales activities. We will continue to deliver homes on schedule and honor all customer warranties. The building and sale of homes will be unaffected by this restructuring process.”
Related news:
- Brightwater builder skips more loan payments
- Cash-strapped builder: Green homes project still a go
- Brightwater developer misses $1.7 million payment
- O.C. builder can’t make $57 million in debt payments
- Homes on the Bolsa Chica horizon
- Housing project breaks ground at Bolsa Chica
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41 Comments
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This is what happens when you get tied up like a pretzel and spend decades getting necessary approvals trying to build homes in an “environmentally sensitive” area.
Huntington Harbor would still be a brackish backwater if the Coastal Commission , enviro-nuts, American Indian sympathizers, et. al., had been around in the ’60s. Hope everyone is happy.
Rich I get the feeling if you had you way the world would be one big parking lot. Wouldn’t it?
At least he spelled Harbor correctly (Harbour is so wimpy)
What a dream! Here’s a cheer for “brackish backwater”.
Another builder bites the dust.
If a high end development, like this one with ocean views, goes under then you know we are in deep, deep doo doo.
Hey Richard, after reading the article, I don’t see anywhere that any of those excuses in fact had any effect on their problems. They, just like many others before them, went broke because of a poor housing market all around. Maybe you’d better go read it again. Especially where it says they were encouraged to sell the project, and didn’t.
“Irvine-based California Coastal Communities Inc. spent decades getting approvals to build homes in the environmentally sensitive beach-view site, only to begin construction just as the housing slump was gaining steam.”
read it again, I think Richard has a good point. there were multiple factors at play here and the sale of these properties was certainly hindered by the timing of the housing crisis. but there was an underlying element which made it take so long to come to fruition.
it became a race, and they finished too late to end up ahead. but that certainly never would have happened if not for environmental nitwits.
“Irvine-based California Coastal Communities Inc. spent decades getting approvals to build homes…”
Have you thought about re-reading the article.
Serves them right for building on top of a Native American indian burial ground. They dug up 174 bodies that were 8,500 year old remains and put them in trailers in boxes on the mesa. What a disrespect to the native people. JUSTICE IS SERVED GOOD BY BRIGHT WATER.
More information here:
http://www.youtube.com/watch?v=UjA8PI9Nx4g
I don’t think that this is a sign of retribution. I think that stiffing the creditors and burning the customers is more of a sign of standard business practices by this company. Any company that shows such disregard for humanity also could care less about paying people what they are owed.
Merelyashadow,
Good point. But they basically spent the last 20 years running in place. Twenty years is a long time to spend spinning your wheels and getting nowhere.
If they’d been able to proceed with the project sometime between then and now, without the myriad regulatory hurdles and hoops they had to jump through, they would have beaten the downturn in the economy and the financial crisis.
not to mention all the added costs that could have been avoided, that merely added on to the selling price of these “overpriced” homes.
Yeah, these places would be selling cheap, otherwise? That makes a lot of sense. The price is not based the hoops they had to jump through. Smart businesspeople have to take everything into account when it comes to evaluating a project, and the managers of this company obviously thought it was economically feasible even after the long delays and given the state of the housing market at that time.
They could have held off on development once they got permission to build, or sold the land with the permission intact. The HB City Council bent over and annexed the land, paid to bring water in, and paid off the company that had already been contracted to provide water, so there’s a huge taxpayer handout to these guys, as well.
Not every square foot of open space needs to have houses on it, anyway. I’d take another saltwater marsh over Huntington Harbour any day.
I agree Josh.
I wish those homes were never built to begin with. I don’t understand people that want to see all our open space built on.
Hear hear! Rev up the bulldozers and level the suckers!
I disagree completely… I live across from this development and not only are the homes not selling, no one is even looking. It’s basically a ghost town with even a few of the homes already up for resale. Had this all have been squared away years ago to avoid the bubble, all you’d have now are homes on the bluff going into foreclosure. This development was destined to fail regardless of a downturn. The homes are poorly designed, cheaply built, to cramped up alongside one another, and grossly overpriced. Other than location.. It’s the recipe for disaster.
Anybody who can’t make money selling ocean view mansions in California must be a complete idiot!
“Anybody who can’t make money selling oil rig view mansions in California must a complete idiot!”
Corrected.
Too bad any homes got built there at all.
johnny blaze, how’s vegas baby????!!!!
Sorry, can’t agree. These problems existed when they decided to attempt to build. They attempted anyway. If it took 20 years, wouldn’t you think that maybe it isn’t a viable project? Hello?? Especially if your stockholders are encouraging a sale of the project? Nope, the developer decided to take his chances with the existing problems and do the project anyway. It failed. Its no one’s fault but that of the developer that didn’t read the signs correctly. Bad business judgment.
In a sense, Richard is right in his first comment, that this is what happens when you attempt to fly into the wind, so to speak. But its no one else’s fault but their own. You can’t blame everyone else for your bad business decisions when the issues were there in the beginning.
I am so happy to see these greedy pigs suffer embarrassment and hopefully a hurdle. Bankruptcy is just a sign this project is jinxed from start to finish by building on a native American burial ground. Anything built will be haunted, and the ground will probably open up and swallow the whole thing. Gives the shivers just walking near the ground when you walk through teh wetlands - it will be similar to Stephen King’s Desolation Row.
Yeah, didn’t they see the movie Poltergeist? I wouldn’t want to mess with that.
Does the builder have to disclose that these homes are built on an Indian burial ground?
That’s right - our problems are related to (stifle the laugh) “too much regulation.” Seriously, does anyone still believe this at all? Can anyone out there say that the housing crises is really related to too much regulation. I’d really, really like to hear that argument, because THAT IS WHY this builder is in the situation they are in – not because of the Costal Commission, Native Americans, or any other group you want to pick on and scapegoat.
There is a really good reason for wetlands, Richard’s ranting against the viscitudes of rapacious regulators and heathen environmentalists aside. They are a buffer zone between the land and the sea. When you start messing with them you are asking for disaster. It has happened in Florida, where the wetlands were drained and now there’s encroaching desert, the mangrove swamps were burned and drained in Louisiana, and the result was that Katrina became a disaster unmitigated by windbreak or impediment to the racing tide. You can’t blame it on the government and too much regulation. Mother Earth will have her way. And Damn those who will build on sacred ground. Key kta po!
Hear Hear, Sara! The wetlands DO serve a purpose and will add protection for nearby houses from tsunamis.
Couldn’t happen to a better company! Shame on them and the City Officials for ignoring the voice of the citizens of Huntington Beach who wanted to preserve the wetlands. I hope to see those million dollar boondoggles leveled to the ground!
I hope the company that wants to build in the nearby bean field heeds this cautionary tale!
Have they changed the sign from Brightwater to Blightwater yet?
I don’t know about the rest of you but at certain times when the wind blows just right…there’s quite a good stench right there. That’s a deal breaker right there for me.
Yep, anybody who enters the development from Warner know not to buy there. It smells awful.
Exactly how are they supposed to sell any houses now? Will people hand over a stack of cash for a deposit now? Will a bank enter into an agreement with a company in bankruptcy?
Besides, those houses mainly overlook oil wells. The place is almost a toxic site. Thus, Huntington Beach begins its reversion to the “born loser” of Orange County cities.
Dare to dream! I loved HB when it was the “loser” city it once was - Golden Bear, lonely winter surf sessions, real people. Naw, those days are gone - the yuppies are here to stay.
I was born living in downtown HB in 1970. My parent were broke 20-21 year old’s, no education, dirt poor, and yet could still afford an apartment in downtown HB. It wasn’t a big deal. The old wells still lined the cliff’s north of Goldenwest street. It was quaint, fun and charming with other down to earth and broke surfer kids. The crowds on the beach were rare most of the year.
Today; not so much.
Its now a wannabe fashion show, uptight imported stiffs with bratty kids, trophy wives, and trust fund babies. Its just a crowded beach shouldered by a busy highway. You have to wear a wetsuit 10-11 months of the year. What is the attraction?
Idontbuyit says:
“This development was destined to fail regardless of a downturn. The homes are poorly designed, cheaply built, to cramped up alongside one another, and grossly overpriced. Other than location.. It’s the recipe for disaster.”
I completely agree. I walk along the trails everyday and see how riduculously close these million dollar homes are being built wiping out any views and window placement designed to look into each other. What the h*&% were they thinking. It beyond deplorable what they did with this precious piece of land.
The few occupied ‘Bluffs’ homes along the wall of death are like living in a fish bowl. No privacy and people gawking at you when you out in your postage size backyard. No thanks. I feel sorry for the suckers who didn’t do their homework fell for the fancy highly upgraded models. Blightwater for sure.
I think the bankruptcy action will allow the builder to finish this project, which will be a good thing. Every home built generates jobs in construction and landscaping, while sales of furnishings and soft goods increase. HB needs the tax revenue and money from this project and should be rooting for resolution. I just don’t understand the naysayers and complainers who would rather cheer failure.
There’s a right way to get tax revenue and a wrong way. HB could generate taxes more effectively than wetlands residences. Responsible development is important to identity. The San Fernando Valley has a great tax base, but honestly, do you want to live there? It is truly a concrete wasteland.
It would have been better to spend that money on mixed use projects along the Beach Blvd. corridor between Garfield and Warner. Go vertical, put in apartments, make the sidewalks more pedestrian/bicycle friendly and with the increase tax base, add a local busing system so people don’t have to use their cars, and you will have a MUCH stronger tax base.
YES…….my prayers were answered!!! I got NO SYMPATHY for this company. I’m glad they’re going under. Taking a beautiful plot of land and making it into a ‘members only’ enclave, is something I despise! And that’s all I gotta say about that!
The houses they built there are darn ugly. Silly colors. Strange style. With a lovely view of the a SWAMP. The only way to descibe the place is wierd. Tough sell at any time at beach property prices.
Anybody who paid the money they were asking for those uninspired big boxes of a house with 3 feet of space on each side of the house and a backyard that is not big enough for a decent size pool is a tool and not really thinking. Paying too much for too little and allowing the developer to screw you is what the developer had in mind. Too bad the Developer sold the thought of luxury and exclusivity but could not deliver on the promise. No wonder they went under. The houses were nothing but huge townhomes.
one of the problems is a screwy association that harrases it’s homeowners, demand letters threatening fines get sent out constantly for little things that effect nobody.