Count a little-known construction firm from Ventura County as the latest player in a stranger-than-fiction drama over a bare hilltop with views of some of the most valuable real estate in Los Angeles.
The 66-acre patch of open land includes six parcels that intersect with Franklin Canyon Park, a popular hiking area north of Beverly Hills. Ever-brash spec developer Mohamed Hadid had a vision of extravagant megamansions on the site, but a years-long legal and financial battle has instead given rise to an ensemble cast that includes a purported Saudi royal, a conservation-minded LLC and the City of Beverly Hills.
The property has been on the market for months. A bankruptcy court sent it to auction in September, and Moorpark-based Sahara Construction Company took until late October to enter the fray. Seemingly out of nowhere, the firm suggested it might be interested in making a $37 million offer.
“First and foremost, Sahara only became aware of this opportunity last week,” Jesse Finlayson, a lawyer representing the company, wrote to an attorney who represents the bankrupt Franklin Canyon entities. “My client is moving as quickly as possible under the circumstances.”
Strada Vecchia connection
Sahara Construction was already familiar with another of Hadid’s predicaments – a late proposal by the company on the doomed Strada Vecchia mansion in Bel Air recently prolonged a bankruptcy court’s auction of that property as well.
Hadid’s plans for Franklin Canyon were over the top even by the extreme standards of Los Angeles spec development: 11 lavish estates perched above the steep hillside — including one 100,000-square-foot home — along with a horse stable, helipad and three guard towers, the New York Times reported.
But the developer’s vision, which would impede access to the popular Hastain Trail, stoked a fierce backlash and extensive legal battle. After years of court fights, a conservation-oriented group with undisclosed funding, Give Back LLC, began buying Hadid’s debt on the property, accumulating roughly $30 million worth. Give Back has been trying to wrest control of the land so it can preserve it for public use.
Give Back appeared to be on its way to making good on its plan when Sahara showed up with its letter of interest at the eleventh hour.
Sahara operates as a general contractor and builder and had $28 million in revenue in 2020, according to the letter of interest. Its projects include major infrastructure and civic works, such as water treatment plants, warehouses, highways and correctional facilities.
The court-ordered deadline for auction bids on the Franklin Canyon Land was October 25 at 5 p.m., the same day Sahara sent its letter of interest.
The company acknowledged its last-minute proposal wasn’t going to meet the requirements to be designated as a qualified bid.
“Nevertheless,” Finlayson wrote, “we are hopeful that you, and ultimately the Bankruptcy Court will see fit to modify the bidding procedures and/or extend the bidding deadline to conduct reasonable diligence regarding the potential purchase.”
Sahara submitted a $1.5 million refundable deposit along with a letter touting its “excellent” relationship with the Bank of America.
In its proposal on the Franklin Canyon land, Sahara mentioned it was “contemplating” a donation of four of the parcels for public use and building on the remaining two. The company didn’t elaborate on the proposal and Paul Ventura, a co-owner, said he was unable to speak when reached by phone last week. He did not return a subsequent call.
A partial donation of the property would likely do little to satisfy the cadre of development opponents — including some members of the Beverly Hills City Council — who want the entire chunk of land preserved for nature and the public.
The man leading that preservation effort, high-powered Beverly Hills attorney Ronald Richards, said he doubts that Sahara is sincerely interested in the Franklin Canyon properties at all.
“As far as I’m concerned,” said Richards, who manages Give Back LLC, which has been attempting to take control of the property for preservation, “it’s just an attempt by Hadid to get somebody to basically create a further delay in the proceedings.”
The Franklin Canyon parcels are not currently entitled for development, Richards emphasized. Considering the property’s history, any new development plans would also likely face a public outcry, a reality that for months has likely contributed to potential buyers’ lackluster interest.
“It’s not like somebody found a hidden golden nugget,” Richards said. “All of a sudden a construction company from Ventura County found something that nobody else in the City of LA found? Everybody missed this one?”
“I think they’re trying to ingratiate themselves with Hadid,” he added, “and I think they don’t understand the complexities of this property.”
In the letter of interest, Sahara’s lawyer said the firm’s representatives “have spoken to Mr. Hadid on a handful of occasions” because of the Strada Vecchia negotiation, but otherwise had no connection to the spec developer.
Hadid did not return an interview request.
Other BK bid
Sahara’s interest in Strada Vecchia — the Bel Air property that’s home to Hadid’s notorious, half-built “Starship Enterprise” mansion and has also been the subject of years of legal battles — dates back a few months. In September, Sahara was one of four parties to bid on the property at a bankruptcy auction designed to raise funds for the mansion’s mandated demolition; after months of delays, Sahara, which bid $5 million for the property, is still in negotiations with a court receiver over a potential deal. Specifics of Sahara’s plans for that property also are unclear.
To Richards, the firm’s entry into the Franklin Canyon drama amounts to more games from Hadid, who directed the entities that own the Franklin Canyon parcels to declare bankruptcy days before Richards was set to foreclose on the land in January.
Since then, Richards said, Hadid has been working the legal system to stall for time, including by “sending fake buyers to the court” — such as a purported Saudi royal who Hadid claimed was willing to pay $34 million for two of the six parcels. The mysterious buyer never materialized.
“Sophisticated and legitimate buyers investing $33.5 million in real estate do not act this way,” Richards wrote in one legal filing, “only sham buyers who have not acted at arms’ length and in good faith do.”
After Sahara’s letter of interest, a judge extended the proceedings until Nov. 30, granting the construction firm more time to formally present its bid.
Richards is meanwhile pursuing a check-mate strategy: a proposal to pay off the property’s other remaining creditors, with the aim of persuading the judge to finally grant control to Give Back.
“Our plan is to pay all the costs of the bankruptcy estate,” he said, “so we can end it.”
The judge’s decision this week could finally decide the fate of the hillside.