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Diablo Grande resort getting interest from 6 potential buyers
last updated: May 15, 2008 01:01:18 AM
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The Diablo Grande Limited Partnership is working with "a half dozen" potential buyers of the luxury golf resort in the western corner of Stanislaus county, according to Dwain Sanders, vice president of development.
"The court is working with us, along with the creditors," Sanders said. "There is a lot of interest in the project."
The Diablo Grande project is a 33,000-acre residential development built around two championship golf courses in the hills west of Patterson. About 400 homes have been built at the site, but the housing market slump in the past year forced the development into a Chapter 11 reorganization bankruptcy.
Chapter 11 bankruptcies protect businesses from creditors while they restructure to become profitable.
The partnership that owns the development is headed by pharmaceutical industry entrepreneur Donald Panoz. The reorganization plan for Diablo Grande appears to be a sale to allow another owner to take the project forward.
One of the parties interested in buying Diablo Grande was revealed in recent bankruptcy filings, when questions of an attorney conflict of interest arose. The Raintree Group was named as a potential buyer.
A Philippines-based company called The Raintree Group specializes in developing hotel properties, but neither Sanders nor an attorney for Diablo Grande were able to confirm that the Philippine company was the same Raintree Group interested in buying Diablo Grande.
Sanders said the development is working on water problems that were identified as the financial problems surfaced. The former problems concern unpaid bonds to finance the water system and water quality.
State water officials cited the development for having trihalomethanes, a compound believed to raise cancer risks, in concentrations higher than allowed, and for failing to meet standards for appearance and odors.
Diablo Grande representatives are working on water issues, Sanders said. "The water quality has improved quite a bit," he said Wednesday.
The Western Hills Water District has reached an agreement with Veolia, the company that operates the water treatment system at Diablo Grande, to continue operating the system, San-ders said. The water district had fallen in arrears with payments to Veolia prior to the bankruptcy.
The water district also is preparing paper work to start foreclosure proceedings against property owners who are in default on property assessments owed to the water district, Sanders said.
"Diablo Grande LP isn't the only one in default," Sanders said, adding that some homeowners and "quasi-developers" also are in default.
Sanders said the direction the development is heading should be clearer by the end of this month.
Bee staff writer Tim Moran can be reached at tmoran@modbee.com or 578-2349.
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