An affiliate of Cal-Coast Companies has declared bankruptcy after defaulting on a $24.9 million public loan tied to land approved for 206 for-sale homes on the waterfront in San Leandro.
Monarch Bay For Sale Residential LLC, controlled by the Los Angeles-based developer, filed for Chapter 11 bankruptcy after a loan default linked to 15.9 acres at 2599 Fairway Drive, within a larger Monarch Bay Shoreline development, the San Francisco Business Times reported.
Despite the unpaid loan and bankruptcy, San Leandro officials insist they still support the project along Monarch Drive between Marina Boulevard and Fairway Drive. The bankruptcy reorganization is expected to take nine months, delaying a key transformation of the city marina.
“City departments continue to work diligently with the developer, Cal-Coast, towards project development,” Tom Liao, community development director for the city, told the Business Times. “Presently, city staff has been in ongoing coordination with Cal-Coast on efforts to obtain permitting approvals and continue to do so during the bankruptcy process.”
In late 2022, the City of San Leandro provided the loan to Cal-Coast when it bought the land for $29.9 million.
Plans by Cal-Coast call for 206 for-sale homes, including 144 single-family homes and 62 townhouses, including 21 affordable units.
It’s part of a 75-acre Monarch Bay Shoreline redevelopment of the city marina along Monarch Bay Drive, between Marina Boulevard and Fairway Drive.
The joint development between Cal-Coast and San Leandro includes 491 for-sale homes and apartments, a 210-room hotel, a 16,000-square-foot restaurant, a 2,500-square-foot library and a revamped nine-hole golf course. It also includes a market, shops and a 9-acre waterfront park.
The development agreement was inked in 2020, but the project stalled during the pandemic.
Cal-Coast made payments on the public bridge loan until January, when it fell into default. The loan was meant to help the developer secure long-term financing.
Because the affiliate filed for bankruptcy, the property is now held by a U.S. Bankruptcy Court Trustee.
“Monarch Bay filed a petition for Chapter 11 relief in order to facilitate a modification of its existing loan agreement with the City of San Leandro and intends to work cooperatively with the City of San Leandro to successfully complete the project,” David Shemano, attorney for Monarch Bay for Sale Residential LLC, told the newspaper.
San Leandro began looking to redevelop its marina in 2008 when it lost federal funding to dredge the incoming channel, and the city chose to dismantle the docks to make way for homes.
Cal-Coast Companies, founded by Edward Miller in 2008, is the developer on behalf of Rescore Property for the 374-unit Rise Hollywood and the 367-unit Rise Koreatown apartments in L.A., according to its website. The firm also does business as Cal-Coast Development.
— Dana Bartholomew
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