The Fresno City Council on Tuesday authorized Mayor Alan Autry to move forward on a plan to buy the Running Horse golf course development and then sell it to billionaire developer Donald Trump.
The council's decision enables the city to draw up contracts that could allow it to buy all the pieces of the bankrupt 480-acre development by February, Autry said.
"Today was a major step in that direction," Autry said after the council met in closed session.
Assistant City Manager Bruce Rudd said the contracts could be presented to the council in two to three months.
Tuesday's announcement left unclear several critical aspects of the proposed deal, such as what price the city would propose paying for the Running Horse properties and how Trump would be legally bound to follow through on his promised purchase and not leave the city holding property it doesn't want to develop on its own.
"I'm not going to say that there aren't questions still to be answered," Autry said.
But with the project languishing in bankruptcy and the city desperate to see it completed to bring a hoped-for PGA Tour event to Fresno, "The only reason the city is involved is that time is not an ally," he said.
As for the risk to Fresno taxpayers, "The contract's going to reflect that. That money won't be at risk," Autry said.
The project's original developer, Tom O'Meara, promised a Jack Nicklaus-designed golf course and 780 high-priced homes at the southwest Fresno development, but only completed two holes and a few homes.
Contractor Mick Evans acquired the project in March and then filed for bankruptcy protection the next month. Court documents show the property's value of $20 million to $40 million is outweighed by up to $70 million in debt, making it unlikely that all of the estimated 300 creditors will be paid back in full.
Autry's plan calls for the city to issue bond anticipation notes, a form of bridge financing that the city plans to pay off with money from the sale to Trump. The city would use dual escrows to buy the properties and then sell them to Trump in a matter of minutes.
But attorneys involved with the case say the city's plan could be complicated by the many lien and deed holders involved in the bankruptcy, who could take court action that would slow the process.
Autry said Tuesday that the city still is talking with parties that have claims on Running Horse properties. While the city plans to buy a number of properties from a major lender after a trustee sale scheduled for Friday, other properties have multiple owners, complicating the process.
"We're going to do everything we can to work with the property owners," Autry said.
Michael Cohen, Trump's attorney, said Tuesday that he couldn't discuss details of the negotiations, but that he had been meeting with Running Horse home builders and other contractors who now hold liens on some of the project's properties.
"The mayor and the city manager and the council members that are supporting this really have a tremendous vision for Fresno," Cohen said. "The only way that there's going to be a project ... is if the city takes control."
Council members contacted after the meeting wouldn't discuss more specific details of the closed-door meeting. State law allows city councils to hold closed-door discussions of real estate matters that, if held in public, could harm taxpayers by damaging the city's ability to command the best price.
"They came in and asked us to support what they want to do," Council Member Blong Xiong said after Tuesday's meeting. "What we approved was for staff to go back and bring back options, whatever those options look like."
Some unsecured creditors and investors in the project have criticized Autry's plan to work with Trump as a buyer, saying that the city should open the process to other potential bidders.
Autry said Tuesday that he believed Trump was the only bidder to come forward who can complete the project, which he sees as critical to helping to spur revitalization of that part of the city.
"Yeah, I've been carrying the water" for Trump, Autry said, "and I'll carry the water of everybody else who wants to invest in southwest Fresno."
A few rules are needed to help foster a feeling of community. We encourage a free and open exchange of ideas in a climate of mutual respect, but any post that violates someone's right to use and enjoy fresnobee.com is prohibited. Before you post, please read the terms of use and obey these simple guidelines.
Here are the ground rules:
Contents of this site are © Copyright The Fresno Bee. All rights reserved.
E-Mail
Print
@Nyx.CommentBody@