Finnito: Developers file for bankruptcy after Beverly Hills project unravels

UPDATED, Friday, September 29, 2017, 2:00 p.m.: After struggling to develop a massive “landlocked” lot in Beverly Hills, a group of Finnish investors have filed for bankruptcy at the project, The Real Deal has learned.

The Beverly Bellevue Estate LLC, the entity behind the property at the Kirkland Drive cul-de-sac, had big plans for the nearly 11-acre site. Its website called for the development of three large mansions with the potential for five more, or perhaps even a five-star gated community. Tiula Architects was to design the project.

But the team behind the project, Helsinki, Finland-based Timo Lindberg and Pasi Raitala, never quite got it off the ground. They were hampered by its location — it has no access to public roads and is surrounded by other residential homes. There are four easements to the property.

They filed for Chapter 7 bankruptcy on Sept. 20, according to documents filed with the city.

Megan Zucaro, who has the listing for the site, said the property has received a few offers in the $5 million to $7 million range. Lindberg and Raitala, who paid nearly $16 million for the site, are reluctant to accept that figure, she says.

“I’ve watched many people go down financially because they live the dream of trying to accomplish what they wanted to build in Beverly Hills,” Zucaro said. “It’s a different animal when you don’t have people on the ground.”

Zucaro, head of Real Estate Concierge, said the company swapped a 23,000-square-foot mansion in the Dominican Republic, plus an extra $4 million in cash, to the first mortgage lender — Donald Okada — for the property in 2014.

Okada, an architect who is now in the restaurant business, said he only accepted the deal to rid himself of a problem-ridden situation with what he described as a fraudulent partner. Okada was to receive the property in the Dominican Republic as part of the deal, but faced trouble along the way. He was only able to resolve the problem after taking his partner to court,he said.

In the U.S., however, the deal continued to languish. Okada, who has been attempting to foreclose on the Beverly Hills property since Beverly Bellevue Estate stopped making payments, says Lindberg and Raitala owe him nearly $3 million.

According to Okada, him and his former partner handed the Europeans all the tools for success, including unsigned contracts and plans for construction. “For the past three years they did absolutely nothing to bring that property to fruition,” he said.

“Everybody is trying to make a quick buck,” Zucaro said. “It’s not all bliss.”