Miraflores seeks Chapter 11 without building promised homes in Richmond

Miraflores Community Devco has filed for bankruptcy after failing to build 190 homes planned in Richmond.

The San Leandro-based developer led by Scott Hanks filed for Chapter 11 bankruptcy, listing between $10 million and $50 million in both assets and liabilities, the San Francisco Business Times reported.

Nine years ago, Miraflores had proposed building 22 four-story buildings with 190 condominiums on 8 acres, which was to revitalize the East Bay city’s Park Plaza. The project at 223 South 47th Street west of the 80 Freeway near two BART stations was to be called Miraflores.

The city had purchased the land in 2016 through its Redevelopment Agency and used federal grant money to help clean up pesticides and toxic solvents on the site.

In 2018, Miraflores Community Devco bought the former flower nursery founded a century ago by Japanese immigrants for $4.2 million. It then took out $10 million in loans tied to the property, former mayor Tom Butt said on his blog last spring.

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 was 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.

Lenders have pursued foreclosure and the City of Richmond has declared the developer to be in default of its agreement, Butt said, adding the property had become a “major dump.”

“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,” Butt said.

Earlier this year, he said the developer had 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.”

Executives of Miraflores Community Devco, including Hanks, were behind Fremont Hills Development, a bankrupt real estate firm that launched a partially built Mission Hills Square development in Fremont, according to records cited by the Business Times.

An affiliate of Los Angeles-based Parkview Financial bought the project last year for $40 million.

Hanks, who signed the bankruptcy, is CEO of the Scott Development Companies and principal at Helios Real Estate Development, both based in the Bay Area.

— Dana Bartholomew

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