RITTER RANCH PROJECT RESTARTED MORE THAN 7,000 HOMES EXPECTED TO BE BUILT.

Byline: Jim Skeen Staff Writer

PALMDALE - After a decade's delay from recession and legal wrangling, the start of construction of 7,200 homes at Ritter Ranch was marked Tuesday with a groundbreaking ceremony that included a blessing by American Indians.

Officials of Irvine-based Suncal Cos. and city representatives broke ground on the master-planned community, which is expected to take 10 years to build and will add 20,000 residents to Palmdale.

The groundbreaking took place near the triple-arch bridge built before work by a previous development company halted in 1995 and since called ``the bridge to nowhere'' by local residents.

The four-lane bridge off Elizabeth Lake Road will become the main entrance for Ritter Ranch's first phase of 1,089 homes, three parks and land for an elementary school.

``Without a doubt this is the most beautiful property in the Antelope Valley,'' said Bruce Elieff, SunCal's president.

Spread between 5,187-foot-tall Mount McDill and Elizabeth Lake Road, Ritter Ranch is to include an 18-hole golf course, an equestrian center, two lakes, six schools, 73 acres of businesses, 100 acres of parks and thousands of acres of natural open space crossed with hiking and equestrian trails.

Frank Faye, president of SunCal Cos. Los Angeles/Ventura Division, expects work on the first phase of 1,089 home lots to move quickly.

``The expectation is we will finish the lots and turn them over to home builders in early 2006,'' Faye said. ``Homebuyers can move in starting in the summer of 2006.''

After being caught up in legal turmoil in a federal bankruptcy court, the Ritter Ranch project was revived when it was acquired last year at auction for $57.2 million by SunCal.

``When you buy a property through an auction you're really buying it on faith. It's a gamble, a bet, but it's worth it,'' Elieff said.

Robbin Itkin, Ritter Ranch's court-appointed trustee, called the bankruptcy case very complex. The paperwork was so voluminous that it fills a back room of her office. The auction for the property drew a standing-room-only crowd and lasted more than four hours, with 75 rounds of bidding.

Litigation continues in bankruptcy court, with the focus now on how to disburse the auction proceeds among creditors.

``We are trying to resolve that as expeditiously as possible,'' Itkin said.

When city officials approved Ritter Ranch development in 1992, they foresaw an upscale, comprehensive project including not only homes, but also parks, schools and businesses, Palmdale Mayor Jim Ledford said.

``We wanted it as comprehensive as possible - with schools, recreation, and open space,'' Ledford said. ``We're looking at a small city in Ritter Ranch. We don't take that lightly.''

SunCal will sell the lots to home-building companies after streets, water and sewer lines and other improvements are in. It is not yet known which home builders will build the 1,089 first-phase houses or how much the homes will cost.

SunCal officials expect most buyers will be homeowners in the Antelope, Santa Clarita and San Fernando valleys who are looking for new, better houses - ``first- and second-time move-up buyers,'' in real-estate jargon.

SunCal officials describe the organization as California's largest privately held developer of master-planned communities. They say SunCal has more than 70,000 residential lots in various stages of development at Tesoro del Valle, Northlake and Plum Canyon in the Santa Clarita Valley and Westport at Mandalay Bay at Channel Islands Harbor in Oxnard.

Jim Skeen, [phone]

james.skeen(at)dailynews.com

PLANNED TOWN'S HISTORY

1989: At the height of an Antelope Valley real-estate boom, a development company headed by Las Vegas developers and former Lorimar Telepictures executives Merv Adelson and Irwin Molasky proposes building 8,500 homes on the 11,000-acre Ritter Ranch, settled a century earlier by the Ritter family.

1992: Palmdale officials approve an environmental impact report and master plan, now calling for 7,200 homes. Los Angeles County officials approve the transfer of 10,000 acres into Palmdale's city limits. Residents of neighboring Leona Valley file lawsuits, saying the environmental impacts have not been examined adequately.

1993: The Leona Valley lawsuits are dismissed in Los Angeles Superior Court.

1995: Palmdale officials approve $50 million in revenue bonds to pay for streets, a dam, water lines and other improvements. Construction begins on the dam and other work, but soon stalls in a deepening housing slump that started in 1990.

1997: Bankers Trust, which put up some of the Ritter Ranch financing, forecloses and becomes the property owner. Palmdale city government begins its own foreclosure over delinquent payments on the revenue bonds.

1998: Palmdale agrees to hold off its foreclosure to give Bankers Trust time to find a new developer. Aspen attorney John Musick takes over, then files for Chapter 11 bankruptcy reorganization.

2000: A federal bankruptcy judge approves a city-backed plan for a Newport Beach company called Sage Community Group to take over from Musick. After trouble lining up partners and financing, Sage pulls out before year's end.

2001: Musick offers to take over a second time, but never secures $200 million-plus in financing needed to fund the revival. Instead, a bankruptcy court judge appoints an attorney as trustee.

2003: Legal squabbles among individuals and firms owed money over Ritter Ranch or interested in buying the property delay a bankruptcy court auction.

2004: The Irvine-based SunCal Cos. organization buys Ritter Ranch for $57.2 million, beating three other companies in 75 rounds of bidding.

CAPTION(S):

3 photos, box

Photo:

(1 -- ran in Business section and AV edition only) Mission Indians from the San Fernando Valley give an on-site blessing for a new community planned at Ritter Ranch in Palmdale. Grading has started.

(2 -- color in AV edition only -- ran in AV and SAC editions only) Developer and Palmdale city officials join in a groundbreaking ceremony Tuesday for the revived Ritter Ranch project.

(3 -- color in AV edition only -- ran in AV and SAC editions only) Heavy equipment has started grading for homes in the first development phase at Ritter Ranch, where, in all, 7,200 homes are planned.

Jeff Goldwater/Staff Photographer

Box:

(ran in Business section and AV edition only) PLANNED TOWN'S HISTORY (see text)