Trump offers $10 million for bankrupt project

Donald Trump wants to buy the bankrupt Running Horse residential project for $10 million, his attorney said Monday, and turn it into what the billionaire developer called "a world-class community" capable of hosting a PGA Tour event in 2008 and beyond.

But two Fresno attorneys representing Running Horse's new owner scoff at Trump's proposal, saying the project designed to have up to 780 upscale homes and a Jack Nicklaus-designed golf course is worth far more.

For his $10 million, Trump would buy Running Horse's approximately 420 acres plus all options to buy the additional parcels necessary to complete it, said Fresno attorney Albert Berryman, who is representing Trump in the project's bankruptcy.

Berryman said a letter of intent outlining the $10 million proposal was sent late last week to Fresno attorneys Riley Walter and Harry Pascuzzi, who are representing Running Horse and new owner/developer Mick Evans.

Berryman said the proposal signed by Trump has "many conditions," one of the most important being that Trump take over the project "free and clear" of all liens on the property.

If these conditions are met, Berryman said, "We are very interested in pursuing further discussions."

In a telephone interview Monday afternoon, Trump declined to discuss details of his proposal but said that, should it be accepted by the bankruptcy court, "We would make [the project] much more glamorous" than originally planned.

Walter said Trump's proposal is little more than "just throwing something out there to see if there's interest. At that price, there's no interest ... $10 million? That's a nonstarter."

Evans took over Running Horse about two months ago and sought Chapter 11 bankruptcy protection in April. The Manteca-based owner of a golf-course construction company is owed more than $9 million for work on the project and is among about 300 creditors.

Total debt on Running Horse could be $65 million or more. Construction on the project stopped last year when original developer Tom O'Meara ran into cash-flow problems; only two holes have been finished.

Walter said Evans would not consider Trump's $10 million proposal because the project is worth more than that. Should Evans decide to sell Running Horse, Walter said, "his duty is to get the best return he can for the creditors."

Pascuzzi said it's still unclear what Running Horse is worth. But he had no trouble listing its assets: more than 400 acres of developable land, considerable work already done on a Nicklaus-designed course, a good chance that a nationally televised PGA Tour event will be played there starting in 2008, and a City Hall intent on making a success of a troubled project.

"Put all that together in your hat and it's worth more than $10 million," Pascuzzi said.

Yet, nothing has been simple about Running Horse for the past nine months, and events over the past several days only add grist to what is turning into one of the most unusual residential projects in Fresno history.

A lingering question since construction on the golf course stopped has been where the $4.5 million PGA Tour event on Oct. 22-28 would be held. Tour officials scouted other Fresno-area courses and in recent weeks acknowledged they might take the event to another city for one year. That issue appears on the verge of a resolution.

On Sunday, the Palm Beach Post on its Web site said the tournament will be played in Port St. Lucie on Florida's east coast, but did not cite a source.

PGA Tour spokesman Bob Combs on Monday afternoon said the Tour has signed no contract with an alternate site and declined to discuss the Palm Beach Post article. He said there soon will be an announcement on the new site.

Combs said Fresno "remains a market of very significant interest to us over the longer term."

On Monday morning, creditors and their representatives met for the second time at the federal courthouse in downtown Fresno. In a reprise of the first meeting in May, the two-hour hearing alternated between two extremes.

On one hand, there were the heartfelt comments of investors and lot buyers who, in some cases, have millions of dollars tied up in the project and could lose most or all of their money.

On the other hand, there were the frank comments of Evans and Walter, who made it clear that, in light of the numerous legal, business and deadline issues involved, the Running Horse bankruptcy might not have a happy ending for many.

Among the meeting's highlights:

The PGA Tour originally had a six-year deal for a tournament at Running Horse. Evans said the contract must be renegotiated since Running Horse "is out of compliance" with it.

Figuring out what is owed to each creditor, whether the creditor is secured or unsecured, and secured creditors' pecking order will be one of the biggest challenges, Walter said.

Time is of the essence, Walter and Evans emphasized. The PGA Tour event is pivotal to the project's success, but work must begin soon if the course is to be ready for a 2008 tournament. The next two months are critical, Walter said.

Running Horse has two options: Evans lands a $15 million loan and resumes work on the course, repaying creditors as lots are sold. Or, he sells. But, Evans added, he doesn't have a firm commitment on the loan. Trump is the only potential buyer who has publicly shown serious interest.

Add all this to City Hall's concerns that Running Horse's nearly 1 1/2-mile-long trench -- where the sunken fairways are to go -- is raising public health and safety issues, and it's clear Trump isn't without leverage.

Trump surprised Fresno in late May when he flew into town on his personal jet to tour the dusty, weed-infested project. City officials, who hope Running Horse will be the catalyst to more development in a southwest Fresno that hasn't had much in decades, trooped to the site to meet with him.

On Monday, Trump said he still is interested in turning the project into a "bigger and better" version of what O'Meara had in mind. It won't come cheap even at a good price, he added. For example, he said, he must buy other unsightly parcels near the project because "you can't have areas that aren't attractive right next to your entrance."

His next step, Trump said, is deciding whether to transform his letter of intent into an actual offer: "We're looking into that."

And Trump, too, has a timeline. If he's to do the deal, he said, construction must begin "in 30 to 45 days."