Most of the land planned for the 521-home Schulz Ranch subdivision will be auctioned off next week to pay for a loan of one of the project's developers.
Schulz Ranch Developers, managed by Lennar Communities of Reno, defaulted on a $26 million loan in March it had taken out with Missouri-based First Bank to fund work on the subdivision. About $12 million of that hasn't been paid as of this month, according to the bank, and the property is being foreclosed.
Thirteen parcels totaling 90 acres of the approximately 125-acre subdivision will be auctioned July 29. This does not include the property that contains the remains of the Champion Motor Speedway.
The city approved the Schulz Ranch project in 2005, the same year the speedway in South Carson City closed after opening 42 years earlier. It is now the largest approved but undeveloped subdivision in the city.
Developer Reynen & Bardis owns the land where the speedway sits. City supervisors have told the business it needs to clean up the old speedway, but the business has said it doesn't have the estimated $140,000 to fix the hazard caused by dilapidated buildings and old stands covered in trash and graffiti.
Representatives from both Lennar and Reynen & Bardis have said they will probably sell their properties. Both businesses have been struggling in the slow housing market.
The city, however, needs to extend a one-year extension to turn in final plans for the subdivision, so they or whoever buys the land, can work from those plans and won't have to re-start the long and expensive process to meet city requirements, according to the developers.
Ted Erkan, Reynen & Bardis division president, said he doesn't know what it will mean for the subdivision if the Lennar-managed property is sold, and "we'll have to cross that bridge when we get there."
The city is scheduled to start cleaning up the raceway next month. It will bill Reynen & Bardis, or whoever owns the property at the time, for the work after it is finished.
But the city will get paid back for its work faster if it gives developers an extension, Erkan said, and "that's best for all parties involved."
Supervisor Pete Livermore said the city has a meeting this week with Reynen & Bardis' bank to try to convince it to give the business a loan to clean up the speedway.
Because of the business's mismanagement, he said, the city is forced to clean up a hazard without knowing when it will be paid.
"It's unfortunate, but that's what it is," he said.
- Contact reporter Dave Frank at firstname.lastname@example.org or 881-1212.