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Developer sued by 52 homeowners
Friday, 06 April 2007

Tuscan Hills plan ends in foreclosure
Mayer-Luce Development had announced it would build an 18-hole golf course hotel and high-end homes, a first for Desert Hot Springs, dubbing it Tuscan Hills in mid-2005. Now the company no longer owns the project and is being sued by 52 homeowners at its other Desert Hot Springs development, Hacienda Heights, who complain of shoddy construction work.

Tuscan Hills plan ends in foreclosure
Friday, April 6, 2007
By KIMBERLY PIERCEALL
The Press-Enterprise

 

The hotel should've almost been built by now, but a cooling housing market has sent a barely touched 550-acre parcel in Desert Hot Springs into foreclosure.

Mayer-Luce Development had announced it would build an 18-hole golf course hotel and high-end homes, a first for Desert Hot Springs, dubbing it Tuscan Hills in mid-2005. Now the company no longer owns the project and is being sued by 52 homeowners at its other Desert Hot Springs development, Hacienda Heights, who complain of shoddy construction work.

Robert Mayer, one half of the Mayer-Luce firm, said the foreclosure sale had been arranged and agreed upon by his company and the lender last October after attorneys on both sides said it would be the best option, "to release us from the personal liability that was attached to the loans," he said.

Story continues below
2005 / Kurt Miller / The Press-Enterprise
Developer Walter Luce stands where he hopes to build a golf course as part of his planned Tuscan Hills project in Desert Hot Springs.

Scripps Investments & Loans Inc., which loaned $34 million to the project, formed Scripps Tuscan Hills LLC and along with a family trust bought the property in foreclosure for $38.4 million on Jan. 26, according to Riverside County records.

"We're thinking about what we need to do. We're moving forward cautiously," said Jeffrey Lubin, president of Scripps.

Mayer said the size of the project made it difficult to find financing when the company needed it last year to pay off the $34 million loan from Scripps. When Mayer-Luce had to start paying interest, the company realized the project wouldn't last long.

"We paid over a million dollars out of pocket to keep it going for a couple months longer," Mayer said.

In 2005, Walter Luce said that the 350- to 450-room hotel would be finished two to three years later. Last year, Luce said he was slowing down on Tuscan Hills' development to watch the housing market.

"The market up here ... went from being one of the fastest-growing cities in the state to where sales have softened dramatically," he said. "The Coachella Valley was really the last part of Southern California to feel the crunch. We thought that maybe we wouldn't be affected by it," he said.

Mayer said the company is finishing developments in Banning and Oakland and working on commercial projects in Riverside County.

"We are going forward. We're a lot leaner of a company than we were," he said.

Three weeks ago, Irvine-based attorney Ken Kasdan sued the company, accusing it of construction defects at its Hacienda Heights development including stucco and concrete foundation cracks, window leaks and roof leaks.

"Overall we're alleging very poor quality and shoddy workmanship," Kasdan said. The homeowners will likely seek about $250,000 each, which they believe is the cost to repair their homes, he said.

Mayer said it appears that most of the homeowners didn't contact the company's customer service center first to talk about construction issues.

"We're kind of skeptical as to the real impetus behind that," he said.

http://www.pe.com/business/local/stories/PE_Biz_D_webforeclosure.1689d01.html

 
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