Adams Canyon Santa Paula Property Sold at Auction

By Sheryl Hamlin

By order of the Court Appointed Receiver, Case # DC-13-12415, in the District Court of Dallas County, Texas, 14th Judicial District, 4,658.64 acres at 3035 Adams hudson_marshallCanyon Road, Santa Paula, Ventura, County, auctioneer Hudson & Marshall held a live auction on October 29, 2015 in Oxnard, where about 35 people were present. About a dozen bidders started and within minutes only a few bidders remained with the winning bid at $6.0 million.

The close of escrow is December, 18, 2015, at which time the entire purchase price plus closing costs and half of the escrow fees will be due. There was a $50,000 fee to bid and 10% of the final price due by the day of the auction.

The auctioneer started at $10 million, then dropped to $4 million and gradually raised the price to $6 million.

The property currently has farming and grazing leases on 90 acres and the seller will be assigning water rights: 279 shares of Farmers Irrigation Company, Inc and 4 shares of Middle Road Mutual Water Company. At 4,658 acres, this amounts to $1288 per acre plus the value of the water rights.

Adamscanyoncover_e4e4151f6f40d40774f414aaab77a307LAFCO voted by a one vote margin to keep Adams Canyon in the Santa Paula sphere of influence (SOI) thus keeping the potential of this project alive. Without such vote, there would have been no auction today because the property’s value would have decreased. By remaining in the Santa Paula SOI, any future project does not need another SOAR vote.

The Adams Canyon Project was the subject of three previous votes with the final in 2007, a reduced project of 495 homes barely passing. The pro forma for the 2007 proposal can be read here. Note that the writers of this proposal included the full 495 homes which is incorrect because the Peck/Foothill project reduces the Adams Canyon Specific Plan by 79 units.

Speaking to the buyer after the auction, he said that there was a group involved in the purchase and that they had plans to make it even better than it is now. The buyer did not give his name.

According to the auctioneer, the property had notes of $44 million with Wells Fargo Bank. This means that the owner of the notes will have to agree to write down the difference between the $44 million and the sale price of $6 million. The seller can accept or deny the bid.

Recall that there were three projects requiring SOAR votes during the time period: Adams Canyon, Fagan Canyon and East Area 1.  Fagan Canyon failed while the other two passed. Ironically, the Fagan project would have been the most seamlessly integrated into Santa Paula and its infrastructure with the highest possibility of success. Adams Canyon will involve millions in infrastructure costs and East Area 1 is an island connected by a bridge that will never be truly integrated into the city of Santa Paula. Part of the Fagan property in the initiative is now on the market for $29.3 million which includes 1,281 acres.

The U.S. housing market is extremely volatile. In September new home sales dropped 15.2 percent from August 2015 and pending sales dropped 2.3 percent.


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