PALMDALE — Only two months after taking control of a controversial planned community in Palmdale, a Colorado-based developer has filed for bankruptcy, listing nearly $65 million in debt.
But developer John Musick said Monday that the Oct. 30 filing was designed to stave off a second foreclosure on the storied project, and was not an admission that efforts have again failed to turn the barren strip into one of the largest new housing developments in the state, with a planned 7,200 houses.
"Despite the bankruptcy, we're moving forward with all due speed to build houses," said Musick, head of Ritter Ranch Development LLC, the third group to own the property since the project sprang onto the drawing board in 1989.
"The purpose of the bankruptcy was to reorganize the financial landscape that we inherited, under the sound supervision of an experienced bankruptcy judge, [and] to bring stability and integrity to the deal."
And even though not a single home has been built in the nearly 10 years since the project was first proposed, Musick is confident that this time construction will proceed.
"We will have new homes up by the start of the millennium," he asserted, taking a break from tending the horses on his Aspen ranch. "We will start construction in the first half of 1999 and we'll have homes up in the second half."
Said Musick's attorney, David Neale: "We're closer to getting it done now than anyone has been in the history of the development."
And that is a lot of history.
The first firm with plans for the nearly 12,000-acre site was the Ritter Ranch Development Co., a group backed by former Lorimar Telepictures executives Merv Adelson and Irwin Molasky. They envisioned a planned community of 7,200 homes, with schools, golf courses and gorgeous mountain views.
In real estate, as in Hollywood, timing is everything.
The developers unveiled their plans just in time to watch the real estate market head south. Months after the property went into foreclosure in January 1997, the developers filed for Chapter 7 bankruptcy, essentially turning the land over to the lender, New York-based Bankers Trust Co.
"The market just wasn't there when the previous developers were ready to move on it," said Palmdale City Manager Bob Toone. "The marketplace has changed. It's gotten better. That's the major difference now."
