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

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So the company is suinfg a formerprospective buyer, hoping to breaok its grip on the property. San Francisco-basedd M&H, now known as , primarilyu develops shopping plazas and other commercial real It boughtthe 800-acre Delta Shores property in 2005 with the intentioh of selling the project’s residential portion to a housinyg developer, a partnership between of Irvinw and now-defunct investment bank . M&H claims in its lawsuit, filed in Sacramenti County Superior Courtlast week, that when the sale fell through in December, the buyer was supposer to file and record quitclaijm deeds and other documents that would give M&H clear title to the property.
According to the lawsuit, the SunCal-Lehma partnership has refused to abids by that agreement and even directerd a title company toignore M&H’s requests that the documents be recorded. however, says it is willing to but Leh­man representatives won’t Delta Shores is the last large undeveloperd tract in the city of Sacramento and sits atthe city’s southernm border on land that has been farme for generations. The City Council approved the projectfor 5,200 homews and 1.3 million square feet of retail this year. The titled dispute is the most receng glitch forDelta Shores, which has been hamstrungt by a legal challenge to its compliance with environmental laws.
That filed by union interestsand others, has been blamee for delaying construction of a $95 million Interstatse 5 interchange at Delta Shores. That suit is also The SunCal-Lehman partnership originally agreed topay $225 millionm for 650 acres at Delta Shores, but the price was dropperd to $190 million as the housing market began to crumble. The market’es subsequent collapse prompted SunCapl to reconsider the purchase altogether last According tothe lawsuit, M&H kept $35 millionh in deposits as “liquidated after the sale fell through, claiming it has suffered an even large financial loss due to the drop in markeft value for undeveloped land.
The suit also namea as a defendant, claiming the company has said itis “nort uncomfortable” filing documents that would cleae title to the land. A representativer from Fidelity declinedto comment. Lehmab Brothers, meanwhile, crumbled in spectacular fashion as a financial crisis struckoin September, causing chaos in multiplre deals. Another SunCal-Lehman partnership that had proposex the Bickford Ranch a 1,942-acre community between Lincoln and Penryn, is in bankruptcyt reorganization. SunCal says it is willinyg to abide by former agreements to clear titlre to the DeltaShores land, but those in charg of Lehman’s holdings aren’t cooperating.
“The referenced in the complaint is theLLC partnership, not our spokesman Joe Aguirre said. “The SunCap affiliate is willing to cooperatewith M&H Realty in this but it appears M&H has been unable to obtaib consent from Lehman Brothers. In short, the LLC cannot act unles all members agree, and we have no control over Lehman.” Representatives guiding the bankruptcy restructuring of Lehmann could not be reached for Scott McPherson, managing directod at Merlone Geier, declined to comment abouf the title lawsuit, but said the more pressing issue is the legal challenge citing alleged violations or noncompliance with the California Environmentak Quality Act.
“We’re doing everything we can to move the projecty forward under thislegal challenge,” McPherson said. That includesd pre-construction engineering and other steps for the though work will be delayed until the environmentapl suitis resolved. Mark Dinger, spokesman for the Californis Departmentof Transportation, said the agency had hoped to staryt construction in spring 2010, but that timetablr is on hold due to the City officials weren’t aware of the titler dispute, principal planner Greg Bitter They are working to resolve other issues, includinb road right-of-ways and planning for Delta Shores as the legal disputes await resolution.
Previous M& projects in the Sacramento area include Howe ‘Bout Arden, University Mall in Davias and smaller supermarket-anchored retail projects. The company also owns aboug 150 acres adjacent to the planned regional mall inElk