Friday, Jan. 09, 2009

Diablo Grande fixing water problems, looking to rename itself

Bedeviled development being renewed, renamed

The new owners of Diablo Grande are working on several fronts to get the troubled development moving forward, according to a report from Laurus Corp., partners with World International LLC, an investment group that owns the property.

World International bought the 28,500-acre residential and golf resort development in the hills west of Patterson out of bankruptcy court three months ago. In response to a request from The Bee, Laurus representatives report that they are in final contract negotiations with Sierra Golf Management to continue operating the golf courses.

Sierra Golf took over course management last spring after the courses were temporarily closed because of financial problems encountered by the previous owners. Club members say they have been pleased with the new management.

Laurus also has been working to resolve water quality problems at the resort. The development is served by Western Hills Water District, formed by the original developers. The state Department of Public Health has cited the development for high levels of trihalomethanes, a chemical byproduct of disinfecting processes. Trihalomethanes are believed to increase the risk of cancer in drinking water. Stanislaus County has stopped issuing building permits at the resort until the water problem is resolved.

The new owners have installed a carbon filtering system as a short-term solution. They have agreed to install a chloramine system, which mixes chlorine and ammonia to disinfect the water, as a long-term fix. The carbon filtering system is undergoing testing, according to the Laurus Corp. report. Bids on the chloramine system are due Thursday. Installation should take up to six months.

World International has hired an architectural firm to redesign the Diablo Grande master plan. The owners plan to work with the county on review and approval.

County officials said last week that they had not been contacted by the new Diablo Grande owners.

Laurus and World International are looking for joint ventures with luxury home developers to get new construction under way. The development has about 400 homes built; the master plan includes 2,200 to 2,300 homes.

The collapse of the housing market in the past two years led to the bankruptcy filing by the original owners last year.

The new owners also are contacting upscale wineries about expanding the winery at the resort.

The new owners are market-testing new names for the development and expect to announce a name in the coming weeks.

"This has been a fresh start for Diablo Grande, and we intend to keep the upswing momentum going," said Frederique Szita of the Laurus Corp., in a statement.

Bee staff writer Tim Moran can be reached at tmoran@modbee.com or 578-2349.