A Walnut Creek commercial lender that has repossessed two troubled golf course communities near Auburn has filed a claim against Nevada County, alleging a failing sewage treatment plant at DarkHorse Golf Club has halted home building at the upscale development.
“This has gone on for two years. We can’t build any more houses,” said Bob Bridge, vice president of real estate assets at Owens Financial Group.
Owens loaned $18 million to DarkHorse developers Ed and Chad Fralick in late 2004 to finish the luxury golf community, then repossessed the course and 75 lots in 2007 after the Fralicks sold only 32 homes, Bridge said Tuesday.
Now, stuck with lots that are losing value and unable to build on them, Owens is paying nearly $14,000 a month to haul DarkHorse wastewater two miles to a treatment plant at the nearby Lake of the Pines community.
“This golf course is like most golf courses,” said Bridge. “If you lose only a little bit, you’re doing good.”
Owens also repossessed the Auburn Country Club, which went into foreclosure in June.
The lending company’s claim, precursor to a lawsuit if negotiations fail, marks the latest drama in the region’s troubled-racked luxury golf club industry, which was soaring high just as the housing bubble burst.
A number of golf course residents who bought million-dollar homes have watched as memberships declined, clubs reverted to lenders, and private courses turned public to gain needed revenue. Now, lenders, too, must contend with unforeseen problems inherited after repossessing large golf properties.
The Owens claim alleges that Nevada County didn’t adequately inspect the developer’s incomplete water treatment system and shouldn’t have allowed residences to hook up to it. New-home permits at DarkHorse have been blocked until the sewage treatment system is brought up to state standards.
Nevada County officials declined comment Tuesday.
