Crumbling Cash Foundation?
Naples Development Hits Major Financial Snag
Already mired in a development delay of epic proportions, Matt Osgood and his controversial plan to put several dozen luxury homes at the eastern gate of the Gaviota Coast recently have run into an entirely new financial roadblock. According to public documents, the Orange County-based Osgood missed a roughly $3.1 million mortgage payment last May and, as a result, was served with a notice of default in early December from his primary creditor, First Bank. In short, unless Osgood can figure out a way to renegotiate his $63 million loan and/or come up with some serious cash by the March 12 deadline, he runs the very real risk of the historic Naples property going into foreclosure.
“We will have to wait and see, but it certainly looks like this whole thing is starting to crumble,” said Naples Coalition lawyer Marc Chytilo this week, pointing to a decision made by the county’s Board of Supervisors four months ago to rescind a portion of Osgood’s hard-earned development approvals, a series of lawsuits swirling around the debate, and the recent financial woes.
Fully acknowledging the less-than-ideal fiscal turbulence currently rocking his 71-mansion vision for Naples, Osgood was confident on Tuesday that his issues with First Bank would be resolved. Balking at notions of bankruptcy or even possible foreclosure, Osgood opined, “This doesn’t put Naples at risk. … In fact, I would say this is fairly common in these current financial times. It might take three days or three months, but we will get this thing restructured.”
To him, the aforementioned money crisis ravaging the country, the loss of property value in Santa Barbara County (Osgood figured this week that Naples had lost 30 to 58 percent of its value), and, of course, the publically popular vote by the Supes last October basically to erase the coastal portions of the development approvals and permits all suggest that a restructuring was in order for his massive loan, even without the missed mortgage payment late last spring.
According to Osgood, he not only is in “ongoing negotiations” with First Bank as the deadline approaches, but he also recently worked out a restructuring for his other Naples-specific loan (this one for about $18 million) held with a “private individual.” “It is hardly ever a smooth process,” added Osgood.
Though Osgood said it isn’t necessarily related to the default situation, real estate firm Kerry Mormann and Associates began advertising late last week two configurations of lots for sale at Naples. In and of itself, Naples lots on the market is far from new news—not only has Osgood repeatedly threatened to start selling off individual lots if things don’t work out in his favor, but Mormann and Associates have, on previous occasions, offered up various incarnations of Naples listings—but the timing of the newest properties does seem to be more than mere coincidence. Specifically, two chunks are on the market: The 110-acre coastal bluff is priced at a cool $55 million, and a 90-acre “horse facility” property at $15 million.
As for the project itself, with its future tossed into an unprecedented state of limbo thanks to the Board of Supervisors’ vote to take back the coastal part of their approval, things, at least in Osgood’s words, “still have a long way to go.” While the inland area development approval still stands, it has not yet begun to move forward as the California Coastal Commission is slated to hold a hearing, sometime this year, on the lot mergers required to make it a reality; Osgood’s once-upon-a-time approved plans for the coastal potion of his several-hundred-acre property essentially are back to square one.
For their part, both Chytilo and the folks from the Environmental Defense Center (who are representing the Surfrider Foundation in the fight against development at Naples) relished the apparent money trouble currently facing the developer. “We thought the thing was financially unstable from the beginning,” stated Chytilo, “and this only confirms that belief.”