Sunday, November 11, 2007

Trump holds all cards in bankrupt development

From the Fresnobee.com:

Nine years ago, Running Horse developer Tom O'Meara sat down with Anthony and Margaret Mello at their dining room table and offered the retired couple a deal.

Over the past 40-plus years, the Mellos had turned their 16 acres at California and Marks avenues in southwest Fresno into an oasis in the midst of fallow land, a home surrounded by orange and pomegranate orchards they hoped to leave to their children and grandchildren.

But where the fruit trees grew, O'Meara saw the 18th hole of a world-class golf course -- part of a 480-acre, 780-home multimillion- dollar development that he promised would bring a PGA Tour event and new prosperity to the Mellos and their neighbors.

"They made it sound so good," recalled Margaret Mello, 77.

The dream of Running Horse ended in bankruptcy last March, leaving the Mellos with about half of their orchard ruined -- trees that crews tore out even as the developer failed, the Mellos said, to follow through on promises to buy their land.

Now Fresno Mayor Alan Autry's administration is trying to work out a deal with celebrity developer Donald Trump to bring the Running Horse project back to life -- if the city will buy all the properties in advance.

And that worries the Mellos, who -- like other small property owners whose land is needed to build Running Horse -- worry they could be crushed by bigger players in the drama.

The Mellos aren't the only people worried over the fate of the Running Horse project, where a bankruptcy has left a messy tangle of jilted investors, unpaid landholders and competing claimants on a project burdened with up to $70 million in debt -- two to three times the property's likely value.

Trump has said he isn't interested in Running Horse unless the city can deliver all the properties needed to build the Jack Nicklaus-designed golf course that was approved by the PGA Tour.

Back in July, Trump offered $30 million to buy the project out of bankruptcy. But he backed out and withdrew a $1 million deposit two weeks later after learning of potential difficulties in designating much of the land around the project as a redevelopment area.

3 comments:

Rob Dawg said...

...leaving the Mellos with about half of their orchard ruined -- trees that crews tore out even as the developer failed, the Mellos said, to follow through on promises to buy their land.

Whointhehell lets people onto their property before the deal is closed? I sorry, they sound like decent people, one of the many now and future bagholders but this part is just plain their fault.

pismobear said...

Bubba (TV actor mayor of Fresno) is an idiot. Bend over Bubba, here's some KY, Trump is coming. hehehehehehe.

David said...

But [Trunp] backed out and withdrew a $1 million deposit two weeks later after learning of potential difficulties in designating much of the land around the project as a redevelopment area.

Withdrew a deposit? Fire the lawyer who wrote that contract.

As for "redevelopment area", sounds like Trump wanted to use the power of eminent domain to cram-down on any neighbors who tried to negotiate fair value instead of rolling over.

DCRogers