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CHEROKEE RECOMMENDED TO BUY BERMITE PROPERTY.

Byline: EUGENE TONG Staff Writer

SANTA CLARITA - The bankrupt owner of the Whittaker-Bermite property in the heart of the city recommends that North Carolina-based Cherokee Investments purchase and develop the contaminated grounds.

Phoenix-based RFI Realty offered the recommendation during a U.S. Bankruptcy Court hearing in Arizona on Tuesday, when the winning bid for the 996-acre property south of Soledad Canyon Road would be selected, said Santa Clarita City Attorney Carl Newton, who was monitoring the proceedings.

``They were recommended by the debtor as a qualified bidder,'' he said.

Asked how the city would react if Cherokee emerged as the winner, Newton said officials would look at it ``favorably.''

But a decision was postponed until May 30 after lead creditor Porta Bella Lenders LLC asked the court for more time to review the bids.

``The judge said when he was granting the continuance, he expected that to be the sale hearing date,'' Newton said. ``He has the power to enforce that.''

Three other developers are in the bidding war, including Irvine-based SunCal Cos. and newcomer SG Enterprises. Also known as Selvin Green, the New York-based investment group announced that it was increasing its $64 million bid by $10 million, Newton said.

Both SunCal's and Cherokee's bids are complex deals involving cash and RFI's insurers. Before any development takes place, the winning party must undertake cleanup at the Whittaker-Bermite site, where more than five decades of rockets and explosives manufacturing and testing left heavy metals and other contaminants in the soil.

This includes perchlorate, a chemical that in large doses has been linked to thyroid problems and has migrated to local groundwater.

The city in 1995 approved a development plan - Porta Bella - which called for Whittaker and, later, RFI to build a business park and nearly 3,000 homes.

RFI bought the property in 1999 for $15 million, but spent more than $25 million to clean up the site before putting it back on the market in 2002.

The company had said it was stymied by a City Council that refused to amend the old Porta Bella plan to suit its needs. RFI in 2004 filed for Chapter 11 bankruptcy protection.

eugene.tong(at)dailynews.com

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Title Annotation:REAL ESTATE
Publication:Daily News (Los Angeles, CA)
Date:May 3, 2006
Words:367
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