Developer sees "bright future" for Dyer Mountain

7/23/08
Sam Williams
News Editor

An official from Dyer Mountain Associates said the company is working with investors who may step forward in the next few weeks and save the embattled project from bankruptcy.
Sara Duryea, DMA co-manager and one of the people officially in charge of the 6,700-acre, four-season resort project near Westwood, said it would be inappropriate at this time to reveal any details about new investors interested in the project.
"We're currently under the protection of the federal bankruptcy court," Duryea said. "We have until the end of September to file a plan with the court to satisfy our creditors and move out of Chapter 11. We're meeting weekly with new interested parties. We expect there will be a bright future for the project."
According to Duryea, the new investors are in a "due diligence period" and there won't be anything conclusive to report to the public until DMA files its financial plans with the court in mid-September.
She said DMA was still in possession of the property, and many aspects of a possible deal with new investors remain unresolved.
When DMA filed for Chapter 11 bankruptcy protection in federal court in San Francisco Thursday, March 27, it raised a number of issues for Lassen County.
DMA owes Lassen County $200,000 in back taxes.
Litigation surrounding the proposed project continues - especially the challenge to the developer agreement filed last October by the Mountain Meadows Conservancy, Sierra Watch and the Chico-based Yahi Group of the Sierra Club.
The suit, filed in Lassen County Superior Court, claims the county did not follow California environmental law in certifying the project's Environmental Impact Report, development agreement and tentative parcel map for the resort.
An amendment, filed Tuesday, Jan. 8, alleges the development agreement violates a voter-approved 2000 initiative, which zoned the area around Dyer Mountain and Walker Lake as a mountain resort.
The three groups allege the initiative gave the county the option of changing the land-use designation on the project site if construction of ski facilities had not commenced within seven years.
The suit initially asked the court to set aside the Board of Supervisors' certification of the EIR, development agreement and parcel map.
The three groups also seek an order directing the county to comply with the California Environmental Quality Act, a temporary stay and restraining order, and preliminary and permanent injunctions stopping the county and its agents from taking any action to implement the project until full compliance with CEQA.
Two-thirds of Westwood voters and almost 63 percent of voters countywide supported a November 2000 ballot initiative that amended the General Plan, zoning ordinance and Westwood Area Plan to allow the development of the resort.

Dyer Mountain Update April 9, 2008

04/09/08
Sam Williams
News Editor
At least one Dyer Mountain Associates manager put a positive spin on the company's filing for Chapter 11 protection in a federal bankruptcy court Thursday, March 27.

The Chapter 11 process allows DMA to propose to the court a reorganization plan to satisfy its debts. The court must approve this plan before it can be implemented.

Sara Duryea, one of three DMA managers, said the bankruptcy filing gives the company "time to get a deal done. Within 30 days we should have a pretty good idea of whom we're going to be working with. We've got 90 to 120 days to present a plan to the court."

According to Duryea, DMA has "two investors working with us right now, and we're talking with other interested investors. Dyer Mountain is an incredible asset, and there's lots of interest."

Duryea said she is very optimistic despite all the current debt in the housing market. She acknowledged the project "needs equity," but she said she was "very confident" DMA would partner with other investors during the Chapter 11 process who would eventually build the project.

She also said the bankruptcy filing would give the company some time to resolve its conflicts with lenders who have been seeking to foreclose on the property.

Earlier this month, California Mortgage Reality, DMA's mortgage lender, planned several public auctions so the remaining unpaid balance on a deed of trust executed Nov. 18, 2005, could be paid. DMA reportedly owes almost $16 million. CMR extended the deadline at each of those public auctions, held on the steps of the Lassen County Courthouse.

Calls to CMR requesting comment for this story on the DMA bankruptcy filing were not returned.

The Dyer Mountain project has been in the works at least since voters approved a ballot initiative in 2000, which zoned the area around Dyer Mountain and Walker Lake, also known as Mountain Meadows Reservoir, as a mountain resort.

The Lassen County Board of Supervisors approved the environmental impact report, development agreement and tentative parcel map for the resort in September 2007.

A month later, three groups filed suit to stop the resort development, claiming Lassen County did not comply with California environmental law in approving DMA's plans to build, or have other developers build, three golf courses, ski runs, more than 4,000 houses and condos, and commercial and retail projects.

Mountain Meadows Conservancy, Sierra Watch and the Chico-based Yahi Group of the Sierra Club filed the lawsuit in Lassen County Superior Court asking the court to set aside certification of the environmental impact report, development agreement and parcel map.

Attorneys on both sides are collecting material for the "administrative record" in the lawsuit, and trial dates have not been set yet.

Dyer Mountain update in Lassen County

News About Dyer Mountain:

This past week Dyer Mountain Associates filed for Chapter 11 protection. This will give the organization time to regroup and seek more financing. Here is the article that appeared in the 4/2 Sacramento Bee.
Lassen resort developers try to buy time by seeking bankruptcy protection
By Jane Braxton Little - Bee Correspondent
Published 12:00 am PDT Wednesday, April 2, 2008
Story appeared in METRO section, Page B2

The owners of a timbered mountainside proposed for a $35 million four-season resort have filed for bankruptcy protection.

Dyer Mountain Associates filed for protection under Chapter 11 of the federal bankruptcy code to gain more time to raise $15.8 million to stave off foreclosure of the resort property, said Grant Sedgwick, a manager of the company.

The developers have been under the threat of losing their 6,700 acres in Lassen County since November, when California Mortgage and Realty Inc. posted a notice of a foreclosure sale to recoup the money it loaned them.

The Dyer group also owes around $197,400 in back taxes to Lassen County.

"Our finances are obviously in a bit of a mess," Sedgwick said Tuesday.

The controversial ski and second-home resort on Dyer Mountain near Westwood has been planned since 2000, when voters countywide overwhelmingly approved zone changes allowing construction of around 1,000 houses.

Since then the development has grown to include more than 4,000 residential units, two golf courses and a ski resort projected to generate up to 500,000 visitors a year.

After the election, Briar Tazuk, a major investor in the resort and its primary promoter, told county officials construction would start in 2001.

But the developers encountered financial hurdles that delayed approval of the project by Lassen County officials. Among them was a 2004 dispute over their failure to pay a one-time tax payment of $157,000.

The project achieved a major milestone in September, when the Lassen County Board of Supervisors certified a state-required study of its environmental impacts. Sedgwick, who was hired in May as president, said the supervisors' approval freed the developers to seek about $100 million in financing to pay their debts to California Mortgage and Realty and carry the project into the future.

The search for investors has been complicated by foreclosure sales scheduled four times since November.

Each time the San Francisco-based lender has postponed the sale to allow the developers time to come up with the $15.8 million they owe it.

The final deadline was March 27, Sedgwick said. Instead of producing the money, Dyer Mountain Associates filed for protection in the federal bankruptcy court in San Francisco.

"We needed more time. This was a way to get it," Sedgwick said.

The developers have up to 120 days to submit a reorganization plan. They are scheduled to meet with their creditors in May, according to the filing papers.

That will include Lassen County, which will be involved to recoup the back taxes the Dyer developers owe, said Tax Collector Richard Egan. Annual taxes on the company's approximately 30 parcels are around $250,000. They increase to $276,000 with penalties if they are unpaid, he said.

Lassen County is also involved in the bankruptcy proceedings through an agreement with the developers that commits them to paying the county's legal fees in a lawsuit filed in October by three environmental groups.

The litigation is ongoing despite the bankruptcy filing, said Steve Robinson, director of the Westwood-based Mountain Meadows Conservancy, one of the plaintiffs. The filing verifies his belief that the developers "don't have the means to do this project," he said.

The Chapter 11 filing offers an opportunity to recognize the importance of Dyer Mountain and its natural resources, said Tom Mooers, executive director of Sierra Watch, also a plaintiff in the lawsuit. He said he hopes conservation groups will acquire the resort property to permanently protect the area.

Meanwhile, the developers are in "serious negotiations" with two potential investors to raise the money they need to both pay their debts and finance project construction, said Sedgwick. "Strange as it may seem," filing for bankruptcy protection could make that process easier, he said.

Guidelines established by the bankruptcy court will establish "a cleaner path to closing a transaction," said Sedgwick.

For now, however, financial difficulties have postponed construction on the project.

None of the engineering that should have been going on this winter has started, said Sedgwick, who resigned as company president last week but continues to serve as a manager.

He remained optimistic about the resort's future. "The current owners may not be involved in it, but this project will get built," Sedgwick said.

Dyer Mountain Update from Plumas County News

Dyer sale postponed until April 8

Shayla Ashmore
Staff Writer
02/23/2008

Once again, Dyer Mountain Associates avoided the sale of the 6,700-acre four-season resort property in Westwood.
California Mortgage Realty, DMA’s mortgage lender, postponed the public auction at the Lassen County Courthouse of the Dyer Mountain Resort property for almost a month.
Independent auctioneer George Wickman read a notice of postponement at 2 p.m. on Friday, Feb. 22 in the lobby of the Lassen County Courthouse.
The lender planned the public auction to pay the remaining unpaid balance, estimated at $15,810,084.31, on a Deed of Trust executed on Nov. 18, 2005, when DMA purchased the property.
“We have until March 15, that’s the deal,” said Sara Duryea, one of three Dyer Mountain Associates managers. “We’ve met the criteria. We had to pay $200,000 by last Friday (Feb. 15). We did pay it.”
DMA President Grant Sedgewick said the sale will be postponed again to Tuesday, April 8. By that time, he said DMA will probably announce a new financing package providing enough money to pay off the loan DMA took out to buy the resort property and provide funds to go forward with the development.
“We’re getting some cooperation from our existing lender,” said Sedgewick. “They’re going to postpone it again. It’s going to be postponed until March 31. We have to demonstrate some progress to the lender and there are payments being made to the lender.
”Duryea said DMA is getting closer to announcing a refinancing deal. “We won’t make an announcement until we actually have closed a contract and we have a letter of intent,” she said.
Sedgewick agreed. “We are going to successfully refinance the project before any sale is necessary by the lender and we are cooperating and they are cooperating to make that happen,” he said. “We have an overall agreement that’s going to allow us to refinance but there are performance goals we have to meet along the way.
”The project has been in the works at least since voters approved a ballot initiative in 2000, which zoned as mountain resort the area around Dyer Mountain and Walker Lake, also known as Mountain Meadows Reservoir.
The Lassen County Board of Supervisors approved the environmental impact report, development agreement and tentative parcel map for the resort in September 2007.
A month later, three groups filed suit to stop the resort development, claiming Lassen County did not comply with California environmental law in approving DMA’s plans to build, or have other developers build, three golf courses, ski runs, more than 4,000 houses and condos, and commercial and retail projects.
Mountain Meadows Conservancy, Sierra Watch and the Chico-based Yahi Group of the Sierra Club filed the lawsuit in Lassen County Superior Court asking the court to set aside certification of the EIR, development agreement and parcel map.

Dyer Mountain Update from The Plumas County News

Dyer Mountain sale postponed

2/13/08
Shayla Ashmore
Staff Writer
There was no trustee sale of the 6,700-acre Dyer Mountain resort property Monday, Feb. 4, Wednesday, Feb. 6, or Friday, Feb. 8.

Independent auctioneer George Wickman read a notice of postponement at 2 p.m. each day in the lobby or on the front steps of the Lassen County Courthouse. Wickman said the sale was postponed at the discretion of the trustee, California Mortgage and Realty, which lent developer Dyer Mountain Associates almost $16 million to buy the property in Westwood.

On Friday, Feb. 8, Wickman said the sale had been postponed until 2 p.m. Friday, Feb. 22, by mutual agreement.

DMA Manager Grant Sedgewick said the developer of the four-season resort successfully negotiated giving DMA 60 days to refinance the loan.

However, since the negotiations were conducted by e-mail, DMA's three managers hadn't signed the final documents postponing the sale.

"The documents are in draft form," Manager Sara Duryea said Tuesday, Feb. 5. "They're going to be signed Wednesday (Feb. 6).

"On Thursday morning, Duryea said the documents would be signed later that day or early Friday, Feb. 8.

A California Mortgage and Realty spokesman said the company doesn't discuss borrowers with outside parties.

A notice of trustee's sale, filed Jan. 10 in the Lassen County Clerk's office, stated that the mortgage company would sell the Dyer Mountain Resort property and all fixtures and equipment located on the property at 2 p.m., Feb. 4, at public auction, to the highest bidder.

"The lender agreed to postpone the planned trustees' sale for two months because we've shown them that we have a pretty good prospect for refinancing. We reached an agreement this afternoon," Sedgewick said at 4:30 p.m. Sunday, Feb. 3.

The lender planned the public auction to pay the remaining unpaid balance on a deed of trust executed Nov. 18, 2005, when DMA purchased the property.

According to the trustee sale notice, the total amount of the unpaid balance was estimated to be $15,810,084.31. The notice said premiums and interest may increase the amount prior to sale.

DMA managers announced they were in negotiations with a number of entities interested in refinancing after the mortgage company filed a notice of default and election to sell under deed of trust Aug. 27 with Lassen County. It warned DMA it had to repay more than $3.59 million in past due payments plus permitted costs and expenses.

"We have new financing we're working on," Sedgewick said Thursday, Jan. 17. "It's close to complete.

"He said the new financing package would provide enough money to pay off the loan DMA took out to buy the resort property and provide funds to go forward with the development.

The project has been in the works since voters approved a ballot initiative in 2000, which zoned as mountain resort the area around Dyer Mountain and Walker Lake, also known as Mountain Meadows Reservoir.

In September, the Board of Supervisors approved the EIR and a large-lot parcel map dividing the resort property into 13 parcels ranging in size from 40 to 1,118 acres. The board approved the development agreement in October.

DMA plans to build, or have other developers build, three golf courses, ski runs, more than 4,000 houses and condos, and commercial and retail projects.

The resort faces a lawsuit filed in October by Mountain Meadows Conservancy, Sierra Watch and the Chico-based Yahi Group of the Sierra Club. It alleges county approval of the project violated the California Environmental Quality Act.

Dyer Mountain Update 2-5-08

Update from the Lassen County News:

“There will not be a sale on Monday,” Dyer Mountain Associates Manager Grant Sedgewick said on Friday, Feb. 1.The developer of the four-season resort in Westwood successfully negotiated to prevent the sale of the 6,700-acre property, according to Sedgewick, one of three DMA managers. A notice of trustees sale, filed Jan. 10 in the Lassen County Clerk’s office, stated California Mortgage Realty, DMA’s mortgage lender, would sell the Dyer Mountain Resort property and all fixtures and equipment located on the property at 2 p.m. on Feb. 4, at public auction, to the highest bidder.“The lender agreed to postpone the planned trustees’ sale for two months because we’ve shown them that we have a pretty good prospect for refinancing. We reached an agreement this afternoon,” Sedgewick said at 4:30 p.m. on Sunday, Feb. 3. “I think it will, just like usual, take us to the last minute…. It’s just sort of the way the world works. Things normally take as long as you have.”The lender planned the public auction, to take place at the main entrance to the Lassen County Courthouse, to pay the remaining unpaid balance on a Deed of Trust executed on Nov. 18, 2005, when DMA purchased the property.According to the trustee sale notice, the total amount of the unpaid balance is estimated to be $15,810,084.31. The notice said premiums and interest may increase the amount prior to sale.DMA managers announced they were in negotiations with a number of entities interested in refinancing after the mortgage company filed on Aug. 27 a notice of default and election to sell under deed of trust with the Lassen County Clerk. It warned DMA it had to repay more than $3.59 million in past due payments plus permitted costs and expenses. “We have new financing we’re working on,” Sedgewick said on Thursday, Jan. 17. “It’s close to complete.”He said the new financing package would provide enough money to pay off the loan DMA took out to buy the resort property and provide funds to go forward with the development.The project has been in the works at least since voters approved a ballot initiative in 2000, which zoned as mountain resort the area around Dyer Mountain and Walker Lake, also known as Mountain Meadows Reservoir. In September, the board of supervisors approved the EIR and a large-lot parcel map dividing the resort property into 13 parcels ranging in size from 40 to 1,118 acres. The board approved the development agreement in October.DMA plans to build, or have other developers build, three golf courses, ski runs, more than 4,000 houses and condos, and commercial and retail projects.Lawsuit The project has already been challenged in court. Lassen County has yet to file a response to the lawsuit Mountain Meadows Conservancy, Sierra Watch and the Chico-based Yahi Group of the Sierra Club filed in October, according to Rick Crabtree, the county’s special counsel for the Dyer Mountain project.The suit claimed Lassen County did not follow California environmental law in certifying the EIR, development agreement and tentative parcel map for the resort. An amendment, filed on Tuesday, Jan. 8, alleges the development agreement violates the voter-approved 2000 initiative, which zoned as mountain resort the area around Dyer Mountain and Walker Lake. The three groups allege the initiative gave the county the option of changing the land use designation on the project site if construction of ski facilities had not commenced within seven years. The suit initially asked the Lassen County Superior Court to set aside the board of supervisors’ certification of the EIR, development agreement and parcel map.The three groups also seek an order directing the county to comply with the California Environmental Quality Act, a temporary stay and restraining order, and preliminary and permanent injunctions stopping the county and its agents from taking any action to implement the project until full compliance with CEQA.The suit said the 6,741-acre ski area and golf resort on undeveloped land on the flanks of Dyer Mountain “would house at least 17,382 people, making it in essence a brand-new city, just miles from Westwood, a small community of about 2,000 people.”The large new population and unprecedented degree of construction in an undeveloped and sparsely populated area will lead to “a wide array of significant environmental impacts,” it said.