Ritter Ranch project may return again

This story appeared in the Antelope Valley Press May 31, 2001.

By BOB WILSON
Valley Press Staff Writer

PALMDALE - Like a cat with nine lives, the Ritter Ranch housing project is on the verge of making yet another return.

A reorganization plan satisfying all the major parties affiliated with the 7,200-home project could be approved by a federal bankruptcy court as soon as mid-June, Palmdale City Attorney Matt Ditzhazy said Wednesday.

If the plan is approved, work on the project could resume in September, he said.

The proposed reorganization involves using money from newfound financial backers to pay more than $9 million in bond debt and buy back approximately $41 million in outstanding bonds, Ditzhazy said.

All parties have indicated a willingness to sign on the dotted line, he said.

The move would relieve the city of its duty of collecting the amounts owed to the people and corporations that bought bonds in 1995, which were sold to finance the infrastructure needed for the master-planned community, Ditzhazy said.

It also would relieve project owner John D. Musick Jr. of Aspen, Colo., of any outside interference in moving ahead with his plans to complete the project, the city attorney said.

On the drawing board since 1989, the project was turned over to Musick, its third owner, in August 1998. A month later, Musick sought Chapter 11 bankruptcy protection.

Musick's partnership, Ritter Ranch Development Inc., has invested more than $5.7 million to keep the project alive.

If the reorganization plan is approved, $1.5 million would be transferred from the project's improvement account, with half going to the city to reimburse it for a variety of legal and supervisory expenses and half going to pay a portion of the past-due interest on the bonds, Ditzhazy said.

The city also would receive $3 million earmarked for a new City Hall, and three separate legal claims against the city would be dropped, he said.

"If (Musick's) plan goes forward as envisioned, money would be disbursed to pay off the bonds and the bond debt and reimburse the city," as well as satisfy those still owed money on the sale of the land for the project and other interested parties, Ditzhazy said.

"It would wipe out the bonds; he'd own the land; he'd have the development agreement and the development rights; and he'd have the money to build," the city attorney said. "He's already putting together bids for the next step in making the public improvements."

That step would be creating a second way to reach the 10,625-acre project from the south, via a connection to Avenue S, Ditzhazy said.

The proposed settlement agreements with the concerned parties "are being set up so when they close, (Musick) can start almost immediately," he said. "Sept. 1 is the target date."

The land - bounded by 40th Street West on the east, Bouquet Canyon Road on the west, Elizabeth Lake Road on the north and the Sierra Pelona mountain ridge line on the south - would be prepared with streets, utilities and other infrastructure so it could be sold to "merchant builders," Ditzhazy said.

Those builders would construct Ritter Ranch's homes. As approved, the development is to include 7,582 acres of open space, 2,332 acres for 7,200 homes and apartments, 369 acres of parks, 73 acres of commercial area, seven school sites and a golf course.

Musick "has been working nonstop, as far as I can tell, to pull everything together," Ditzhazy said.

If the reorganization fails, the project probably would be placed in the hands of a court-appointed bankruptcy trustee, he said. That trustee would be in a position to decide whether another plan should be developed or whether the development should be offered for sale to satisfy its creditors to the greatest extent possible.

Under the present plan, those owed money "may not get all of the back penalties and interest, but they will get the bulk of what they are owed," Ditzhazy said. "Nobody is taking a haircut, as far as I know."

If the plan fails, another $1.5 million would be withdrawn from the improvement account for both the city and the bondholders, he said.