Miraflores Community Devco defaults on apartment project in Richmond
City wants to buy back property from developer linked to prior bankruptcy
A project envisioning nearly 200 apartments on more than 7 acres of city-owned land in Richmond has become mired in foreclosure proceedings.
Seven years after Hayward-based Miraflores Community Devco agreed to develop a vacant lot at 223 South 47th Street, the project has fizzled after the city declared the developer in default, the East Bay Times reported, citing a city update.
After the developer took out $10 million in loans against the property without permission from the city, lenders are pursuing foreclosure. The property’s taxes are delinquent and the land has fallen into disrepair.
“Hints of trouble began to surface years ago, accelerating in 2022, but staff did not want to let the community know that the project they had anticipated for so many years was headed for the toilet,” former Mayor Tom Butt, who termed out in January, wrote on his e-Blog this month.
“As late as a few weeks ago, the developer appeared at a community event at Miraflores Park and told the community to anticipate a groundbreaking this summer, knowing full well it was a lie,” he said.
Plans for Miraflores called for 22 four-story buildings of 190 units west of I-80 near two BART stations in Richmond’s Park Plaza.
Until 2006, the Miraflores property was home to flower nurseries run by Japanese immigrants since the turn of the last century. Later, the city’s redevelopment agency bought it.
The city’s redevelopment successor chose Miraflores Community Devco to develop the land in July 2014, then inked a development agreement in 2016. The property, purchased for $4.2 million, was transferred to Miraflores in 2018.
Despite not breaking ground, the developer last year requested the city modify the project from a for-sale development to a workforce rental project, changing the project’s financing.
Richmond officials say Miraflores has been uncooperative in providing full disclosure of the modified plan. They say it also failed to pay taxes, and defaulted on loans on the property in violation of the development agreement.
According to the DDA, the city does not have any liability in the event of default and may choose to repurchase the property.
The Richmond City Council has been negotiating the “price and terms of payment” of the property since at least July.
As the project remains stuck in limbo, state business and federal court records show that the developers involved are intertwined in a broader web of fraud, bankruptcy and immigration schemes, and appear to have been behind other now-defunct developments in the Bay Area, according to the East Bay Times.
The principal executives of Miraflores Community Devco were also behind Fremont Hills Development — a bankrupt real estate firm that launched the uncompleted mixed-use Mission Hills Square development in Fremont, according to state business records.
The project was spurred by Golden State Regional Center, whose owners were indicted in March 2019 for running a fraudulent “golden visa” program, which offered U.S. residency to foreigners who invested at least $500,000 in domestic businesses that created at least 10 jobs in low-employment Census tracts.
— Dana Bartholomew
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