Tuesday, Sept. 16, 2008 • Lenders take control of Dyer Mountain; project continues as planned

Publisher’s note: This story originally appeared in the Tuesday, Sept. 16, 2008, edition of the Lassen County Times.

Dyer Mountain near Westwood, the site of a proposed 6,700-acre four-season resort, has a new owner.

Dyer Mountain Associates, the group behind the project for nearly 10 years, lost control of the property at a foreclosure auction on the steps of the Lassen County Courthouse on Wednesday, Sept. 3.

Auctioneer George Wickman said the property “went back to the beneficiary” who held the fourth deed of trust.

According to Ron Heckman, a spokesperson for California Mortgage Realty, the investor provided a $100,000 credit bid for property in Lassen County and a $100,000 credit bid for property in Plumas County.

Doug Lutz, the director of lending at CMR, said his company represents a “combination of investors” who hold all four deeds of trust on the property.

Lutz said the property was “acquired by an investor” who is “trying to get his hands around the property and decide what to do.”

Sara Duryea, one of the principals with Dyer Mountain Associates, said the new owner plans to develop the property and is working with three buyers, one of whom DMA had courted.

“I want the project to succeed,” Duryea said. “It was an enormous personal investment for me. I share the vision the people of Lassen County have for this project.”

Dyer Mountain Associates failed to come up with a buyer for the property as prescribed during the company’s bankruptcy proceedings that began in March 2008.

On Aug. 7, Dennis Montali, a United States bankruptcy judge, gave DMA an opportunity to sell the property for at least $51 million by Friday, Aug. 29, to satisfy its creditors. If the property was not sold or the creditors were not satisfied with the new buyer’s ability to pay, the judge ordered Dyer Mountain could be sold at auction on any date after Tuesday, Sept. 2.

Wickman said the investor who foreclosed on the fourth deed of trust assumed all the debt involved with the first three deeds of trust, and the next step would be to record a trustee’s deed — a deed that would formally end the foreclosure process.

Craig Settlemire, Lassen County counsel, said the project to build the four-season resort can continue despite the change in ownership because the developer agreement between Lassen County and DMA is attached to the land, not to a particular owner or developer.

“We’re waiting for the new owner to come forward and see what they want to do,” Settlemire said.

According to Settlemire, the new owner could choose to exercise the right to move the four-season resort forward or could choose to let it go and use the property for some other purpose.

“It will be interesting to see what the new owner wants to do,” Settlemire said.

Bob Pyle, the Lassen County supervisor who represents the Westwood area and Dyer Mountain, said, “However it works out is how it’s meant to be. If DMA doesn’t have the money, maybe somebody else will. Maybe it’s a good thing. There’s a silver lining in every black cloud.”

At this moment, Pyle said his main concern is collecting the property taxes DMA owes Lassen County. He said the county’s position is very secure, and the county will collect the back taxes.

Lassen County Supervisor Jim Chapman, who cast the lone dissenting vote when the developer agreement went before the board, said he was disappointed but not surprised by the foreclosure sale.

“It’s sad,” Chapman said. “This thing has been in the general plan since the 1960s. These people stepped forward and said, ‘We’ll do it for you,’ but they didn’t do a thing. They had all these various speculations and a lot of scenarios and schemes cooked up, but I said. ‘I’ll believe it when I see it.’”

Chapman said he became concerned as the vision of the project changed over time, and that’s why he voted against the developer agreement when it came before the supervisors for approval.

“I wasn’t happy then, and I’m not happy now,” Chapman said. “This project has not served us well. The developer agreement is about how are you going to make this project work. What was initially presented to the board and to the voters and what was presented in the developer agreement was like night and day. It wasn’t even the same project.”