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Owner of stalled Pacific Palisades development files for bankruptcy
The Colorado Springs developer bemoaned how difficult it is to build in California
Days after the City of Los Angeles revoked its construction permits, the legal entity tied to a long-stalled development at 16815 Bollinger Drive filed for Chapter 11 bankruptcy.
The partially-built home in the wealthy Pacific Palisades neighborhood has been the subject of neighborhood turmoil since construction halted in April 2016.
Colorado Springs-based Legacy Group — the development firm attached LG Bollinger LLC — is looking for a lender to refinance the project or a buyer for the site, said Marc Hoffmann of Legacy.
Hoffman’s partner at Legacy, Randy King, was named in the bankruptcy filing. Their LG Bollinger LLC, which filed as a “single asset real estate business,” owes money to less than 50 debtors and expects to have enough funds to be available for distribution, the filing shows.
The entity purchased the 7,916-square-foot lot in June 2015 along with borrower Christopher Rhoades of Helios DRE Joint Ventures, property records show.
At that time, an initial Coastal permit allowed the owner to remodel the 1947-built home on the grounds that “less than 50 percent of the exterior would be remodeled,” Palisades News reported. However, when over 90 percent of the exterior was removed, neighbor Steven Dersh, owner of Almont Real Estate, filed a complaint with the city in December 2015. After a year passed and the house remained fenced up with no progression, Dersh discovered his complaint got lost in the bureaucratic process and demanded a follow-up, calling the project an “eyesore.”
The City determined that more of the estate had been demolished than permits allowed. It demanded that the developer either re-apply for permits to make the building conform to code or demolish the site.
Hoffman said the company filed for bankruptcy to buy some time and submitted a new permit concurrently.
“We’re trying to meet as much of the city’s requests as we can,” Hoffmann said. “It almost seems like they don’t want businesses to succeed in California.”