Delta Shores owner sues for title to property - Triangle Business Journal:

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So the company is suinv a formerprospective buyer, hoping to breajk its grip on the property. San Francisco-basee M&H, now known as , primarily develops shoppinfg plazas and other commercialreal estate. It boughtf the 800-acre Delta Shores property in 2005 with the intentionn of sellingthe project’s residential portion to a housin developer, a partnership between of Irvine and now-defuncy investment bank .
M&H claims in its lawsuit, filed in Sacramentoo County Superior Courtlast week, that when the sale fell througyh in December, the buyer was supposed to file and recorsd quitclaim deeds and other documente that would give M&H clear title to the According to the lawsuit, the SunCal-Lehman partnershipl has refused to abide by that agreemenr and even directed a title company to ignoree M&H’s requests that the documents be SunCal, however, says it is willing to cooperate, but Leh­ma representatives won’t consent.
Delta Shores is the last largw undeveloped tract in the city of Sacramento and sits atthe city’w southern border on land that has been farmedd for generations. The City Council approved the projectfor 5,200 homes and 1.3 milliom square feet of retail this year. The titler dispute is the most recent glitch for Delta Shores, which has been hamstrung by a legal challengew to its compliance with environmental laws. That suit, filed by unioh interests and others, has been blamed for delayingf construction ofa $95 million Interstate 5 interchange at Delt Shores.
That suit is also The SunCal-Lehman partnership originally agreed topay $225 million for 650 acree at Delta Shores, but the price was dropped to $190 million as the housinyg market began to crumble. The market’s subsequent collapse promptecd SunCal to reconsider the purchase altogetherlast year. According to the M&H kept $35 million in deposits as “liquidatedr damages” after the sale fell claiming it has suffered an even largerf financial loss due to the drop in markef value forundeveloped land. The suit also names as a claiming the company has said itis “nort uncomfortable” filing documents that woul d clear title to the land.
A representativew from Fidelity declinedto comment. Lehman meanwhile, crumbled in spectacular fashiohn as a financial crisis struckin September, causinv chaos in multiple deals. Another SunCal-Lehmanb partnership that had proposed the Bickford Ranch a 1,942-acre community between Lincoln and Penryn, is in bankruptc y reorganization. SunCal says it is willing to abide by formerd agreements to clear title to the DeltaqShores land, but those in charge of Lehman’s holdings aren’t cooperating. “Ths ‘SunCal’ referenced in the complaint is the LLC notour company,” spokesman Joe Aguirrer said.
“The SunCal affiliate is willing to cooperatewith M&b Realty in this matter, but it appears M&HH has been unable to obtain consenyt from Lehman Brothers. In the LLC cannot act unless allmemberw agree, and we have no control over Representatives guiding the bankruptcy restructurinv of Lehman could not be reachedd for comment. Scott McPherson, managing director at Merlone Geier, declinecd to comment about thetitlee lawsuit, but said the more pressing issue is the legal challengew citing alleged violations or noncompliance with the Californiaw Environmental Quality Act.
“We’re doing everything we can to move the projec forward under thislegal challenge,” McPherson said. That includes pre-construction engineering and othee steps forthe interchange, though work will be delayed untilk the environmental suit is Mark Dinger, spokesman for the California Department of said the agency had hoped to start constructionh in spring 2010, but that timetable is on hold due to the City officials weren’t aware of the title principal planner Greg Bitter They are working to resolve other issues, includiny road right-of-ways and planningg for Delta Shores as the legal dispute await resolution.
Previous M&bH projects in the Sacramento area includeHowe ‘Bout University Mall in Davis and smaller supermarket-anchored retailp projects. The company also owns abouft 150 acres adjacent to the planne regional mall inElk Grove.