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Builder bows out of deal

City: Shapell Homes decides that Whittaker-Bermite plan is too expensive

Posted: February 12, 2011 1:55 a.m.
Updated: February 12, 2011 1:55 a.m.
 

Beverly Hills-based builder Shapell Industries Inc. is pulling out of a recently announced partnership with the city of Santa Clarita, calling the plan to buy the Whittaker-Bermite property out of bankruptcy too expensive and complex.

On Jan. 25, the Santa Clarita City Council approved a plan for the city to work with Shapell Industries and the Lewis Operating Corp. over the next year to find a way to purchase almost 1,000 acres of contaminated land out of bankruptcy so that city planners could start “re-planning the site.”

“Before we got very far, Shapell decided, ‘This is far more expensive than we first thought,’” said city spokeswoman Gail Ortiz on Friday.

“We can’t do it alone,” Ortiz explained. “Because it’s expensive and there is a lot of debt on the property — that’s why we need a partner.”

Lewis Operating Corp. officials have indicated they plan to continue to partner with the city over the next several months, working to help acquire and re-plan the property in preparation for future development, according to Ortiz.

The Whittaker-Bermite property is 996 hilly acres south of Soledad Canyon Road behind the Metrolink station. Between the 1930s and the 1980s, it was a weapons manufacturing plant and testing grounds.

The land, which at one point was designated for houses, is polluted and currently being cleaned up under the supervision of the state Department of Toxic Substances Control.

“We’ve known that this is a complex property with many issues, and (it) will be complicated and expensive to move forward,” said City Manager Ken Pulskamp. “The city is pleased that Lewis Companies will continue working with us over the next year.”

Remediation Financial Inc., the current owner of Whittaker-Bermite, is in bankruptcy but won a lawsuit against the city. In a complex deal with Remediation Financial and property lienholders, the city proposed to buy the land last December with the aid of developers who could front money and partner in the land’s development.

Only one year was allowed for the deal.

“As a result of this very limited one-year time line that was approved by the U.S. federal bankruptcy court, it would be necessary for the city to immediately and expeditiously start the due diligence in securing a financial/development partner,” Ortiz said in a statement Friday.

“This would most importantly not only secure a primary leadership role in this property but a controlling interest in the ownership of the property, which the city believes would be the key combination to controlling our own destiny on this 996-acre site that is in the heart of the city.”

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