A settlement has been worked out to resolve the long-standing financial problem arising from the default of Mello Roos Bonds that were sold to build infrastructure in the Wildwood Estates Development. Nevada County counsel Alison Barratt-Green explains the developer had plans to build out in phases but came up short on cash.
Financial woes arose soon after the Community Facilities District was formed when the then-property owner abandoned the project, failed to complete construction of the infrastructure, filed bankruptcy, and failed to pay the special taxes that were designed to cover the annual debt service on the bonds. That sequence of events caused the bonds to go into default in 1992. Owners of the bonds have not received principal or interest payments on the bonds since 2002. If approved, the settlement is expected to return owners of the bonds at least 28 cents on the dollar of their investment. Barratt-Green says the settlement has no impact on the county general fund.
Under the settlement, Nevco Land Acquisition, LLC will purchase the property known as Phases 2 and 3 of Wildwood Estates, which is still subject to the defaulted bonds. Nevco Land Acquisition has agreed to pay appraised value for the property, assuming the property is clear of all delinquent taxes, assessments and bond debt. Supervisor Hank Weston, whose district covers Penn Valley, says he is very pleased to finally have a solution that will repay bondholders and the county at least a portion of the money owed to them, and lift the burdens that have plagued the property for over 22 years.