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March 21, 2018

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Let's not forget the local politicians who brought this SNAFU to Pacifica, including Mary Ann Nihart, Karen Ervin, et al., who advocated for the project, but who did not ensure that due diligence was performed.

What does Pacifica get as a result? A huge scar on a clay hill right in the middle of town.

Developers make tons of money whether the project ends up bankrupt or whether they build it out for a profit and anything in between. So before you get all excited about this guy climbing the social ladder or helping out minorities and women, bottom line, he takes himself a big fat salary on any investors funds and gets paid whether it works or doesn't. Matters not. I promise you, it doesn't matter to him either way. I also promise you that he knew the project would never sell as approved. Matters not to him. The only ones that lose are the banks or private investors who put up the money for the infrastructure, etc. Well, maybe the dumb real estate brokers that put in their time and money marketing something that would never sell. They lose too, but that's it! That's how it's done. That is also why each project is its own individual company. That project is bankrupt, not his company.

That my friends is how he or any developer ends up super rich.

This project will work only if they split the lots in two and build twice as many homes at a price of around $2M. That price point is no longer out of reach for people, even for Pacifica. Not sure city council would approve that, but the alternative is to let all the infrastructure go to waste because they've spent millions on that. Time will tell, but it's still amazing that the developer and no one else on their team (yes, I know they're from outside the area) did any research. Likely they had people interested in selling telling what them what they'd like to hear. Really, really bad idea.

This property is not being marketed well. But they did the hard part of putting in the access and utilities. If they sit on it, they might come out ahead in 10 years.

A dump down the hill on Buel Avenue is currently listed for $1 million.

It can work if you build homes for half the price these guys had planned. Clearly, there is no demand for $4.5 million to $5 million homes in Pacifica with an ocean view. The problem is that there was more than $14 million in debt on the project. These guys have deep pockets. They can sit on the project. The prices were slashed below $2 million per lot. I believe the first lot sold for a bit over $2 million. Rumor on the street was that they slashed the prices of the lots to $1.5 million to $1.7 million and still couldn't move any. The lot down by the Post Office is not part of Harmony @ 1.

Techies in their late 20s and 30s want to be in the city, where they can walk to nightlife and restaurants. Pacifica is a bedroom community. More well-to-do people are moving in here. The nightlife is pretty much nonexistent. Restaurants are pretty much the same old same old.

Yes, it never works, especially with mediocre local schools.

Big Banker, in perhaps 25 years would this be a profitable venture? There are 13 lots for sale, each requiring approval, and on top of that the houses are already designed. Each lot was listed at $3 million, if I remember correctly. That is a lot of cost.

I guess I'm asking if you see a way this subdivision could someday be valuable?

T-Bone, as far as these developers being m-----, I wouldn't say that. They tried to market the property to wealthy people in San Francisco and Silicon Valley. They even bought full-page ads in Asian newspapers. The original lenders are from outside the area and were sold on the idea of the ocean view and proximity to San Francisco and Silicon Valley. They also pitched the idea that a house of similar size and LEED-certified would cost twice or three times the amount in San Francisco, Hillsborough, Atherton, Woodside, Portola Valley, etc.

Did the management and sales team do a good job? Probably not.

At the time this project was planned, the high end of Pacifica housing was about $1,000,000 to $1,500,00 and they tried to shatter the record high sales price. This strategy rarely works.

TPG Capital and/or the John Marren Trust now own the property. By looking at the debt on the property and the amount of the foreclosure, it looks like the second lender bought out the first and foreclosed on the whole amount. TPG Capital is in San Francisco and Fort Worth, Texas.

Does that mean that the second lender now owns the property/project? Who is this lender? Any idea what its plans are?

So Harmony @ 1's sad saga concluded with the lender taking the project back. The bid was $14,556,709.00. The second lender would have lost its money had the first loan foreclosed, so it did a credit bid of $14,556.709.00. This eliminates the first filing a Notice of Default and foreclosing.

Six days without a comment! Come on, Riptiders, didja eat too much chocolate Easter bunny?

What a bunch of phonies. Fooling Pacifica City Council was the easy part though!

The developer is a complete m... He didn't do his homework. And who are the real estate people who told the developer this project would ever fly? There were many, and none of them are from around here or knew anything about Pacifica. Every broker this i... hired was from outside the area. This has nothing to do with using anyone's money. It's simple really: a poorly informed developer who had no clue about the local real estate market and Pacifica. No matter how hot the market gets, there will never be homes selling for $4 million on that hill. Ever.

[Editor's note: Two deletions due to our terms of service re name calling.]

Sonora Shores:

The Notice Of Trustee Sale on Sonora Shores was posted for foreclosure sale on April 3. The amount due is
$14,386,901.90, Cash or Cashiers Check.

The Notice Of Trustee Sale was published in the Pacifica Tribune March 14, March 21, March 28.

Harmony is no A project but rather a number of projects each requiring approvals. Each lot is a separate APN. The land of each lot is to be sold individually and built individually: 13 lots means 13 projects. The business plan was a dumb-ass idea 10 years ago and still is. The math overall, selling each lot to a private builder/family/speculator, just doesn't work out for the buyer. I'm sure everyone had fun developing the proposal.

What a surprise! Thanks to a former City Council "digging for dollars" so hard, forgot to do due diligence?
https://www.mercurynews.com/2014/09/23/4million-value-homes-living-in-harmony-above-the-pacific-ocean/

I don't know the foreclosing beneficiary or the people in the Sonora Shores group, but here are a couple of different scenarios on what can happen:

1. Sonora Shores just lets the property foreclose and the lender sells it to someone to finish the project.

2. Sonora Shores and the lender get together and work out a loan modification (possible but not likely, being that they sold only one lot).

3. Sonora Shores files bankruptcy and goes in front of the judge and tries to reorganize.

4. Sonora Shores finds a partner to infuse cash into the project to keep it going (not likely due to the amount of debt on the property).

So, Big Banker, what's your opinion of the likely outcome for the scarred hill now? I personally have been hoping nature would take it over as my view looks directly at it, so would appreciate your thoughts on this.

Those deals use other people's money. This is what he explains in his book "The Peebles Principles."

If you bought a house using a bank, or seller financing, you used Other People's Money (OPM) also.

Is there a more recent version of the zoning maps than the 2001 version online?

Yes, Mr. Peebles' book is worth reading. Chilling.

BB: The reason Peebles is "one of the most successful African American CEOs in the country" and his net worth is more than $700 million is precisely because he knows how to pick deals. Those deals use other people's money. This is what he explains in his book "The Peebles Principles."

Erin: The entire quarry site is zoned commercial. The zoning can't be changed to allow any residential, on any part of the site, without approval by a vote of the people.

Please clarify that half the quarry is zoned for planned development (requiring a vote) and the other half is zoned for service commercial (not requiring a vote unless residential is included). Service commercial seems a bit nuts when you consider what storage warehouses would look like and the rents he could secure with those. Yuck! An unnamed local said we could have the biggest pot farm in the Bay Area and make a fortune in revenue for the city. I'm sure there would be no shortage of volunteers in the quality control department.

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