RITTER FIGHT IN WORKS DELAWARE COMPANY ATTEMPTS TO FORECLOSE OPEN-SPACE LAND.

Byline: Karen Maeshiro Staff Writer

LEONA VALLEY - A legal battle is developing over more than 4,200 acres of scrub-covered mountains set aside as open space as part of the Ritter Ranch housing project approved more than 10 years ago.

The Mountains Recreation and Conservation Authority, an arm of the Santa Monica Mountains Conservancy, was given the ridge-top land in 1995 to preserve for hiking, riding and biking trails, but a Delaware investment firm holds a lien on the acreage and is seeking to foreclose.

The authority has filed a lawsuit against the company, D.E. Shaw Laminar Portfolios, to clear title to the land, citing a 1992 development agreement between Palmdale and the original developer that called for the property to be dedicated to open space.

``D.E. Shaw claims they have a lien and want to foreclose on it and become the owner of it. We are trying to have the court determine that the lien is not valid,'' the authority's attorney, I. Bruce Speiser, said.

An attorney for D.E. Shaw said he disagreed with the mountain authority's lawsuit claims. D.E. Shaw has filed its own lawsuit in bankruptcy court raising the same issues.

``It's trying to get a determination as to whether the property is subject to the deed and whether the property can be foreclosed,'' attorney Robert Pippin said.

The foreclosure has been put on hold until one of the two courts says that it can go forward.

The 7,200-home Ritter Ranch master-plan community was approved in the early 1990s but never built because the Antelope Valley's 1980s real estate boom went bust. Instead, the project stalled with financial problems, legal maneuvers and bankruptcy proceedings.

A bankruptcy court auction last August sold the project for $57.2 million to an Irvine-based development company, SunCal, whose officials said construction could start this year.

Planned to accommodate upward of 20,000 inhabitants, a golf course and seven schools, the development was approved by Palmdale officials with the condition that a large part of its 10,650 acres would remain undeveloped.

To provide for management of the largest piece of open space, it was turned over to the Santa Monica Mountains Conservancy, which was created by the state Legislature in 1980 to acquire land and operate outdoor programs in the Santa Monica Mountains and the mountains surrounding the San Fernando Valley.

The Mountains Recreation and Conservation Authority was created by a joint powers agreement between the conservancy and the Conejo and Rancho Simi recreation and park districts.

The Ritter Ranch open space was described in court records as having varied and valuable wildlife habitat and over 60 miles of trails for future regional recreational use.

In December 1995, 4,243 acres were deeded to the mountains authority to be used as open space, and the authority has maintained the property as open space since that time, Speiser said.

The lien on the property was recorded in April 1995, the lawsuit said. The lien, issued as the project was falling into financial disarray, covered all the proposed development, not just the open space.

The lien was acquired by D.E. Shaw in 2004.

``What the Mountains Recreation and Conservation Authority is trying to say is that no matter what the claim of lienholder, this property was intended to be and demonstrated in the public record through the development agreement and other understanding prior to the time the lien was recorded to be lien-free open space,'' Speiser said.

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