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RITTER RANCH ABANDONED.

Byline: Jim Skeen Staff Writer

PALMDALE - Yet another development company has failed to revive the stalled Ritter Ranch.

The 7,200-home project is back to square one in bankruptcy court after Newport Beach-based Sage Community Group notified Palmdale officials it was abandoning its bid to take over the development.

``It wasn't a real surprise,'' said City Attorney Matt Ditzhazy. ``They kept extending and extending their closing date.''

The company notified the city by mail that it would no longer pursue the project. The letter did not state a reason for the company's decision to withdraw from the project, but city officials said Sage had problems lining up both financing and partners.

Calls to Sage were not returned Tuesday.

The recovery plan called for Sage to pay $7 million in cash to the bankruptcy estate and provide a letter of credit for $10 million to the Franklin Fund, which holds $33 million in bonds issued for improvements to the Ritter Ranch property.

In February, a federal bankruptcy court approved a city-backed plan for Sage to take over the project from Ritter Ranch Development LLC, which took over the stalled project in August 1998 only to file for Chapter 11 bankruptcy protection two months later.

The principal of Ritter Ranch LLC is John Musick, a Colorado developer who had worked on the water rights for the project with the original developers.

``This puts it back into John Musick's court for him to come forward with a plan,'' Ditzhazy said.

Calls to Musick's attorney were not returned Tuesday.

Proposed in the hills of west Palmdale, south of Elizabeth Lake Road, the Ritter Ranch project has been tangled up in lawsuits, foreclosures and bankruptcy for more than three years.

The project's original developer, Ritter Ranch Associates, a company formed by Lorimar Telepictures executives Irwin Molasky and Merv Adelson, was able to get the project approved by the city, then fended off lawsuits from Leona Valley residents who feared the project would destroy their rural lifestyle.

However, before a single home was built, the developers lost the project in a foreclosure by their lender in January 1997.

Palmdale, which is the administrator of the $50 million bond issue for the project improvements, began its own foreclosure proceedings in May 1997 against the lender, Bankers Trust.

In May 1998, a settlement agreement was reached to hold off foreclosure proceedings and allow Bankers Trust to find a developer to take on the project.

In August 1998, Musick entered into an agreement with the city to try to revive the project. The agreement required Musick to show that he could make good on delinquent bond payments on the project.

Musick made some progress on the project, reaching agreements to resolve a number of claims against the project. Musick also launched a billboard campaign advertising the project to prospective home buyers.

However, in December 1998, Musick filed for Chapter 11 bankruptcy protection, listing assets at $73 million and debts at $64.8 million.

CAPTION(S):

photo

Photo:

(color) This site in the hills of west Palmdale was to offer 7,200 homes.

Jeff Goldwater/Staff Photographer
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Article Details
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Title Annotation:Business
Publication:Daily News (Los Angeles, CA)
Date:Dec 6, 2000
Words:517
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