Orange County News Blog

​We missed this yesterday, but still think you should know: The company that owns Brightwater -- the company that wanted to build 300-something homes on Huntington Beach wetland -- announced it was filing for Chapter 11 bankruptcy Wednesday.

Both naturalists and Native Americans strenuously fought approval for Brightwater's planned Bolsa Chica development. The plan was ultimately given the okay -- just as the housing market crashed.

Now, California Coastal Communities Inc. faces a $182 million debt. They're looking to restructure in court.

Read two choice bits of the Weekly's coverage of the Bolsa Chica resistance here and here, or go through the archives here.

​According to Associated Press economics writer Chrstopher S. Rugaber, "Consumer sentiment rose more than expected in August and expectations hit the highest level since the recession began, indications that Americans' pessimism about the economy may be lifting."

Rugaber cites findings from the New York-based Conference Board that show the Consumer Confidence index rose to 54.1 from an upwardly revised 47.4 in July. Economists had expected a slight increase to 47.5.

That seems to fly in the face of a new report by Manhattan Beach-based Financial Finesse, which says that even though Wall Street sees signs of recovery, "Main Street isn't exactly buying it."

​My sole Moreno Valley experience happened in 1998, when some methed-out gabacho stole my run-down 1983 Camaro from the parking lot of the former Huish Family Fun Center in Anaheim right next to Camelot (it's now an industrial park). When the cops told me that they found my car in Moreno Valley, my first reaction was "What the fuck is the Moreno Valley?" When I found it it was about an hour away and far from Rialto, Norco, Corona, Chino, and the other cities where distant cousins lived, my next reaction was, "Why the fuck would anyone want to live here?"

My vulgar bewilderment was further stoked by the actual drive there--baking hot, horrible 91 Freeway traffic, in an unreliable Ford Explorer driven by an honest-to-goodness Cajun who was our family mechanic. The Moreno Valley reminded me of rural Mexico: underdeveloped, barren, shoddy, filled with weird people, but with a lot of lawns. Sprinklers on all the time. Eerie. I picked up my car, drove away, and never gave the town another thought.

The Moreno Valley is now the poster child for American housing gone wrong, and the New York Times weighed in with one of their stock magisterial pieces, the kinds that read purty but don't say jack shit about reality. The Orange County connection is that two of the homeowners profiled in the piece moved to the MV because they couldn't afford apartments in OC, which should clue the rest of the nation into how stupid they were to buy into Moreno Valley. Reporter Jennifer Steinhauer doesn't note that even people in Colton ridicule Moreno Valley residents for living there. It's not an area "filled with people priced out of Los Angeles and Orange Counties, or looking to escape louder, less-safe cities," as the Times notes; it's a place for fools who weren't smart enough to buy a house in Calimesa. Shit, even Beaumont is better than Moreno Valley, and Beamount is sketchy.

UPDATE: Here's Village Voice editor (and OC boy) Tony Ortega's take on the story.

​

Lenny Dykstra, the pride of Santa Ana known as "Nails" during an illustrious Major League Baseball career with the New York Mets in the 1980s and Philadelphia Phillies in the 1990s, details his post-career, financial free-fall in bankruptcy documents just posted by The Smoking Gun, which notes that among his remaining assets is a $10,000 German shepherd.

AG Jerry Brown and his suede-denim secret police are coming after OC loan modification companies.

​ California Attorney General Jerry Brown is cracking down on 133 Orange County-based home loan modifiers, reports Orange County Register "Mortgage Insider" Matthew Padilla. Anyone who read Clockwork's Welcome to the Poorhouse: Problem Makers Become "Solvers"--which was about loan companies and officers who helped facilitate the mortgage meltdown now being in the business of helping modify the loans of those underwater--or the looooong string of comments to that post will recognize some of the company names.

The post, which was based on a Salon reporter's visit to a loan modification seminar in Long Beach, included a reference to Shawn Kolahi and Irvine-based Loan Processing Center, which turns up on Brown's list of Orange County companies that have not registered with his office.

A commenter named "Jason" posted an article about disciplinary charges being filed against lawyer Sean Rutledge with United Law Group in Irvine. Kirkland Holdings/United Law Group at 2400 Main St., Second Floor, Irvine, also turns up on Brown's list.

But to give an idea of the murky nature of the business, which often has companies and officials changing their names and affiliations, there is also a United Law Group in Las Vegas singled out by the AG's office. Meanwhile, names very similar to those mentioned in the Poorhouse piece and comments, located in the same OC cities, take up Brown spots as well.

Turns out we were waaaay off in our guestimate as to the asking price for Villa Rockledge in Laguna Beach. Like, $26,250,000 waaaay off. Here's the price according to Unique Homes: The World of Luxury Real Estate:

$26,500,000
Laguna Beach, CA
Rockledge By The Sea. Boasing 190 feet of oceanfront with secluded beach access. Enjoy panaromic coastal views, Catalina sunsets and crashing waves. Privacy, security and seclusion are offered in this desired location.
David Schaar
Prudential California Realty
949-499-5900

Actually, with seven structures on one lot, they out to just put all the on-camera "talent" from The Real Housewives of Orange County and Laguna Beach: The Real Orange County, as well as rejects from The Hills, there in one place and shoot one big reality show. Think how much they'd save in location shooting! Speaking of saving, Villa Rockledge is a steal compared to these Laguna Beach properties that are also posted on Unique Homes:

$31,500,000
Laguna Beach, CA
New construction and the finest oceanfront property available in Southern California are yours at this craftsman-style home with private beach access, three kitchens, guest quarters, a pool, beach cabana, wine cellar, movie theater and top-of-line electronics.
Barry Elms
Prudential California Realty
949-497-3331

$29,900,000
Laguna Beach, CA
"Casa de Concha" is a grand five-bedroom, nine-bath Spanish Colonial-style mansion with spacious public rooms, a sparkling pool and a private garden in a fantastic setting. Enjoy outstanding ocean views!
John McMonigle
Coldwell Banker Residential Brokerage
949-640-3604

Who says no one is buying or selling new houses? Arkbuild--a collaboration between Santa Ana's Taller San Jose community organization and the Orange County Community Housing Corporation's Stepping Up program--is looking for low-income residents interested in becoming first-time homebuyers of three new homes in the historic Logan neighborhood.

Arkbuild--whose mission is to build homes for low income first time homebuyers, teach young people about careers in the building trades, provide tutors to students from extremely low income families and stabilize and revitalize neighborhoods with ownership housing--is encouraging those who qualify to enter a lottery for the new three- and four-bedroom homes that are expected to be completed by Sept. 12.

Villa Rockledge, a six villa compound with a main house and private beach in Laguna Beach, is up for sale. The asking price is undisclosed $26,500,000 (see here), but it's been renting for $15,000 a week. That must mean they want at least $200,000 for it--even in this depressed market!

Described as a "Historic California treasure by the creators of the fabled Mission Inn," "a mecca for Hollywood's Golden Age" and an entrant on the National Register of Historic Places (Jeez, make up your mind: which is it?), the fabulous property first took shape on high cliffs nearly a century ago. It was the vision of Frank A. Miller and Arthur Benton, developer and architect of Southern California's famous resort hotel the Mission Inn in Riverside. Built on a site Miller purchased in 1887, the estate was created as a gift to his wife, Marion. (Its original name, Mariona, is carved above the entrance.) Construction ran from late 1918 through 1922.

Let's take a closer look, shall we?

Monday we told you about Sunstone Hotel Investors Inc., a San Clemente-based real estate investment trust, walking away from its mortgage for the swanky, 258-room W Hotel in downtown San Diego. R. Scott Reckard and Roger Vincent over at the Los Angeles Times report today that one of Orange County's upper-crustiest inns is on the ropes: St. Regis at Monarch Beach.

Yes, that's the infamous resort where American International Group (AIG) sponsored a luxury retreat just days after accepting a federal bailout.

The companies that own the resort are in default on a $70-million loan from Citigroup Global Markets Realty Group, people knowledgeable about the debt said Tuesday.

Negotiations continue in an effort to avoid an auction, according to those sources. But unless something is worked out, the St. Regis will go on the block July 7, to be sold to the highest bidder, according to a "terms of public sale" document obtained by The Times.

Sunstone Hotel Investors Inc., a San Clemente-based real estate investment trust, will default on the June mortgage payment for its swanky W Hotel San Diego property and turn over the 258-room downtown hotel to lenders, after failing to lower interest payments.

The hotel has been hurt by "significant and continuing deterioration in demand for luxury lodging" as well as the opening of luxury boutique hotels nearby, Sunstone officials say in their Sunday announcement carried by the Associated Press.

Sunstone--which bought the W in June 2006 for $96 million from developers including Starwood Hotels, Gatehouse Capital and Multi-Employer Development Partners--now believes the hotel is worth much less than the $65 million balance on its mortgage. At the end of last year, the hotel posted an occupancy of 69 percent, and the AP pegged the debt-per-room at $250,000. So it was apparently cheaper for Sunstone to simply walk away.

"As of March 31, the company owned 43 hotels in the upper-upscale segment operated under brands including Marriott, Hilton, Hyatt, Fairmont and Starwood," reports the AP. "It has been restructuring its credit facility and soliciting bids for new mortgage debt on several of its hotels."

Things are tough all over.

The nation will be pulled out of the housing crisis by an unlikely demographic, according to study by The Concord Group of Newport Beach, a "strategic" analyst of the real estate industry.

"Like the early Baby Boomers in the 1946 to 1964 era, the 80-million strong Generation Y today will make up the wave of future homeowners in the U.S.," reports what is believed to be the first major national housing survey of its kind.

Generation Y, states the report, is generally bullish on the housing market, possessing "a surprisingly strong sense of optimism about the future, despite cautious near-term sentiment." Young homeowners are willing to pay more for housing if the development is near their jobs, according to the study, which also found:

• 50% say they are likely to purchase a home within the next three years.

• 50% say tax credits or lower interest rates would motivate them to purchase a residence sooner.

• 70% believe home prices will be higher or at today's levels in two years.

• 62% say wealth creation is a very big advantage of real estate ownership.

"Generation Y is going to have more impact on the national housing market than any group since the early Baby Boomers," states Emma Tyaransen, a Concord principal.
 
The data supports a Concord prediction that "transit-oriented development will command a premium in the near future," added Tyaransen. "It also proves that suburban development will continue to play an important role in the housing market that emerges from the downturn." 

Collectors for credit-card companies have the phone ringing off the hook, but the messages in the mailbox are worse. Other creditors, the ones not calling because they have miraculously been paid on time, inform that finance charges are being jacked up due to late payments to other creditors. Non-payment notices arrive from Edison, the water district and the county assessor, who reiterates that not only is the huge property tax bill late but so is the late charge on it, and--unless you're a senior citizen--no extension will be granted.

There was no relief earlier in the week when the quarterly statement showed the incredible, shrinking 401k won't serve as a stimulus plan, let alone a bail out. It can't even bail itself out. And how about that new mortgage applied for at these low, low, low interest rates everyone crows about? Denied!--due to . . . wait for it . . . high credit-card balances!

By the time you get to the last letter, the one above the Victoria's Secret catalog, it's almost comical. Almost. It's from the IRS. Uncle Sam wants $547 in less than 10 days lest penalties and interest start accruing. This lovely scenario is brought to you by my life. A misunderstanding on the 2007 return spurred the pay-now-or-else letter. Thankfully, a payment extension was later granted so once the 2008 refund arrives, it will pay off the 2007 misunderstanding.

Better news comes from the state taxman, neither by phone nor snail mail but email.

Habitat for Humanity of Orange County says its mission is to end substandard housing, which is something everyone can get behind, and "to provide hardworking, low-income families an opportunity to share in the American Dream of homeownership," which is something that has gotten a bad rap amid our housing meltdown.

Now, with less SanTana property!

Walk by the CityPlace lofts during the night, and you'll quickly reach for your cell phone for illumination. The SanTana development, created by controversial grease-a-palm developer Robert Bisno, is a spectacular disaster; lofts that once went for $700,000 are now going for half that rate, if not more--and still, many sit alone.

Perhaps this is why the latest edition of the Greater Santa Ana Business Alliance auto-erotic rag called CityLine published a small note letting readers know he has sold off a chunk of his CityPlace holdings for a couple of million dollars. I don't have the paper in front of me, and I'm not sure if the land in question holds lofts or the land on which he proposed to build a 27-story tower, but what's undisputable is that Bisno is as hurting for money to fund his Robert Moses dreams as SanTana's other big-time, Claudia Alvarez-owning developer, Michael Harrah. An assignment for those interested: compare Harrah's real-estate holdings in SanTana from 2004 to today, and you'll be pleasantly surprised.

Click here for a foodier take on CityPlace's troubles!

Whenever they's a wrinkle eating away at vain people, I'll be there. Whenever they's a cop not doing a double take as a pair of hooters goes by, I'll be there. . . .. I'll be in the way guys yell when they're in a gentleman's club an' I'll be in the way trophy wives laugh when they're gossiping about their nannies' flat butts an' they know their celery, parsley and air lunch's ready. An' when folks smile like the Joker an' can't shut their eyes when they sneeze--why, I'll be there.

To think I thought I had it bad.

As Los Angeles Times "Booster Shots" blogger Shari Roan recently revealed, demand for cosmetic surgery fell 12 percent in the U.S. last year; nearly every procedure declined in popularity, typically by 10 percent to 20 percent; and even Botox--plucky, confused, misunderstood Botox--fell by 8.4 percent among women in '08.

Goddamn you, Dow Jones!

The hot question raised at this afternoon's Orange County Great Park study session was whatever became of Lennar Corp.? You know, big Miami-based developer? It's Chinese-made drywall stinks? Victimized by copper thieves in Anaheim's Platinum Triangle? Recently faced financial woes and serious allegations but its CEO still got $1.1 million in '08? (Don't worry, folks, it was a pay cut!)

Partner with the City of Irvine in the Great Park development? You know? That Lennar?

Great Park board member and Irvine City Councilwoman Christina Shea notices the company suits haven't been around lately to mingle, glad-hand and nosh from the City Hall lobby's reception trays lately. "Where is Lennar," she asked today. "Why are they not showing up to these any more? . . . Lennar is not stepping up as a partner."

The answers were important to her as she considered what to possibly offer in regards to the park's 36-month development plan. As a board member, she was charged with sharing her opinions about phase one of building the park, which includes setting priorities for bringing to 500 acres of land lawns, a lake, a sports park, bicycle paths, a cultural terrace and a "working farm" agricultural district.

Great Park CEO Michael Ellzey had said previously the board's views will help shape the concrete development proposals that are scheduled to go before them at their April meeting.

It was good to be back in Henry's. I'd been a regular customer of the yuppified farmers market since it opened in February 2003 on the other side of Costa Mesa's Great Wall of College Avenue that blocks the sights and sounds of the Target store loading docks from my humble abode. Everything changed as my fortunes declined. In fact, you can track my falling finances by simply examining my grocery stores of choice. I went from being a regular at Henry's to Trader Joe's to Ralph's to Stater Bros. to Fresh and Easy to the 99 Cent Only Store--and then back to Fresh and Easy because it's closer than my nearest 99 Cent Only Store, although I do want to go back for reasons explained at the end of this post.

However, on this fine day, I find myself needing some quick ingredients for some concoction I've already started in a pot. I'll take the financial hit on a couple items for the sake of convenience and in hopes I'll make up most of the difference by biking instead of burning gas to more economical stores miles away.

My mood improves and there's a bounce in my step as I get reacquainted with Henry's aisles. I always loved this place, obviously too much considering the number of purchases I made on plastic that have now come back to haunt me. I might otherwise feel guilty even being here since my pay grade no longer affords these everyday higher prices, but I rode over on the same bike, am wearing the same clothes and will stuff my purchases into the same canvas bags as I did when I thought I could afford to shop here, so what the hell?

Prepared remarks for a town hall meeting? Isn't that why they used to unload on Bush? No, it was because ol' Dubya's questioners seemed even better briefed than he was. Observers say President Obama truly chose folks at random during his first presidential visit to Southern California and Orange County, and the first visit by a sitting president to the Orange County Fairgrounds in Costa Mesa. More on that is coming from Weeklings who were actually there, but in the meantime chew on these prepared remarks the White House released before Obama even spit 'em out:

It's always good to get out of Washington for a little while and come to places like Costa Mesa - because the climate's a lot nicer and so is the conversation. So I'm looking forward to taking your questions in a few minutes and talking with you about your concerns.

Before I do, I want to say a few words about the AIG bonuses you've been hearing about. I know a lot of you are outraged about this. I'm outraged, too. It's hard to understand that a company that is relying on extraordinary assistance from taxpayers to keep its doors open would be paying anyone lavish bonuses. It goes against our most basic sense of what is fair and what is right. It offends our values.

Crunching numbers from the latest Forbes list of the wealthiest Americans, Orange County Business Journal concluded that local billionaires lost a combined $5.8 billion of wealth since September. That's not all that has shrunk: there are 793 billionaires on the latest Forbes list, compared with 1,125 a year ago.

A big hole is ripping through the safety net, according to the Orange County Funders Roundtable, a coalition of local foundations that today released results of a countywide study that found 58 percent of responding nonprofits are facing declining revenues in 2009 and more than 66 percent are seeing a greater demand for services. "It's a perfect storm," says Michael Ruane, Children and Families Commission of Orange County executive director, of the study's conclusions. "Reduced donations, increased demand for services and the impact of the state budget crisis on the safety-net providers are putting incredible pressure on our local nonprofits."

The numbers are staggering:

-46 percent of surveyed nonprofits have lost granted funds and contracts that were anticipated;
-43 percent have major donors that were unable to provide continued funding;
-33 percent have already tapped into their reserves;
-and 13 percent are using lines of credit to sustain operations.

Increased demand for food, shelter and medical care by Orange County's newly poor is contributing to the strain on nonprofits, which report more requests for social services coming from first-time assistance seekers. Former two-income families are turning to food banks so they may feed their children. This must be addressed, the roundtable insists, because child abuse and neglect increase dramatically during times of economic distress. 

I was feeling pretty shitty this morning about having to talk to a credit-card company and charge-card company about their hardship programs. Then the New York Times reminded me things could be much worse.

In light of the current financial meltdown, reporter Erik Eckholm puts a fresh spin on the Orange County Register's lauded series from 1998 about poor families struggling to survive in cheap motels. Eckholm's piece opens with Greg Hayworth, a 44-year-old Syracuse University graduate who made a good living in the real estate and mortgage finance business before it crashed, the bank foreclosed his home and he was later evicted from a rental house. Now he, his wife and three children "represent a new face of homelessness in Orange County: formerly middle income, living week to week in a cramped motel room."

That would be the Costa Mesa Motor Inn, where a charity helps pay the $800 monthly room rate. It is estimated 1,000 families live in Orange County motels. "The motels have become the de facto low-income housing of Orange County," Wally Gonzales of the nonprofit Project Dignity tells the NYT.

It's enough to make you wonder how county Board of Supervisors Chairman John Moorlach squares this phenomenon with his vaunted Christian beliefs.

Previously in Welcome to the Poorhouse:
Problem Makers Become "Solvers"
From My Bank to Your Ears
Ring-Ring-Ring!
A New Blog Series

One reason I find myself in the financial fix I am in is because I took took a gamble. The plan hatched with my mortgage broker was to temporarily pay a low, low mortgage--that did not lower my principal--to free up enough cashflow to pay down my credit-card debt. This would improve my credit score enough that, in a year or two, I could refinance one last time into a low, comfortable, fixed-interest rate.

Yes, people were talking at that time about the housing bubble possibly bursting, but it wasn't like my home's value could possibly drop lower than my new mortgage. Besides, as my broker said, it is better to keep the principal higher because should things turn south my bank would be more likely to foreclose on someone with a lot of equity than to eat all my mortgage debt.

Well, things haven't gone quite as planned, but I would not blame my broker. He isn't one of these shady subprime guys who foisted a loan product on me that I could not afford. Seems like I was lucky to avoid one of these hucksters in these parts, according to a troubling piece in Salon by Alyssa Katz, the author of a forthcoming book on the foreclosure crisis.

As Katz reports, some of the scummiest purveyors of subprime loans are concentrated right here in Orange County--and they have now reinvented themselves as "loan modification specialists" who are "heroically" fixing the mess they helped get us all in--for a profit.

Please do not take it personally if I do not answer the phone when you call. Bill collectors used to call my home every morning beginning at 8:30. Then it was 8 a.m. Now it can be any hour of the day. They now call my home,  my cell phone and my work lines. One called my wife's main office line, for a bill that is under my name. After she pointed that out--ripping them a new one in the process--they stopped calling her there.

My cell phone's history of received calls is now a collection of area codes I do not recognize, 877, 336, 623, 973 and on and on. Now, if I do not recognize the number, I do not pick it up. Same with text messages. That strategy has already caused me some embarrassment when it came to the source for a news story trying to reach me. I can't wait until my service ends in May.

I'm sorry, but it's just too dicey, when you are living on the financial edge, to deal with these people over the phone. They used to call when a bill was late, which is fine. I understand that. I can't always pay when they call, but I understand that. Now, however, they've gone to calling days before a bill is even due. It's as if they've figured out when I get paid and they want to get their mitts on my money before all the other bill collectors can.

Seeing news daily about folks stung by drastic wage cuts, fending off foreclosure, paying more for everything, drowning in credit-card debt and hanging dwindling hope on Uncle Obama, a thought comes to mind:

Hey, that's me!

Then comes a question: Why not blog about it? Then an answer: Um . . .  okay. I'll lay out my situation in this first post. I'll return with new posts from time to time. Please chime in with advice, complaints, sympathy, ridicule or your own mucked-up circumstances so we can cry in our Schlitz together.

Nifty little site making the rounds: PadMapper. It takes Craigslist rental listings and puts em on a Google Map. Click on the flag over Orange County to get a look at our for-rent housing scene. You can filter by criteria such as price, location, size and pet-acceptance.

Shockingly, it looks like there's no opportunity for your next bro-pad, lady-lair or post-foreclosure-I-just-don't-want-to-sleep-in-the-rain domicile to be in Coto de Caza.

The Register's John Gittelsohn blogs on Mathew Padilla's Mortgage Insider about House of Cards, a CNBC documentary that names Orange County as the birthplace of the sub-prime loans that infected the world financial system. Gittelsohn notes that among the locals featured in the 90-minute program, which first airs Thursday, are Bill Dallas, founder of Ownit; Lou Pacific, a Mission Viejo real estate consultant; Daniel Sadek, founder of Quick Loan Funding; and . . . drum roll, please . . . John Gittelsohn.

Mr. Gittelsohn, when it comes to shameless self promotion, I remember Gustavo Arellano. I know Gustavo Arellano. You, sir, are no Gustavo Arellano!

More interestingly is the fact that Gittelsohn's post got linked to lefty Atrios' Eschaton blog. And what's more interesting than that are some of the 188 comments (at this writing) the Atrios post generated.

Home foreclosures continue to wrack the Santa Ana-Anaheim-Irvine area, increasing 0.40 percent in December 2008 compared to the previous year. The rate of foreclosures among outstanding mortgage loans rose from 0.90 percent in December '07 to 1.30 percent 12 months later, according to First American CoreLogic, "the largest provider of real estate, property and ownership data and advanced analytics for information on foreclosures, delinquencies, median home prices, home price indices, home valuations, sales activity and mortgage loan originations." The firm, which pegged the

number of outstanding foreclosures in the three-city area for December '08 at 5,991, relies on the actual number of active mortgage loans rather than the total number of households in a given area to come up with its data, which it contends provides more accurate results.

On the bright side, foreclosures in 

Santa Ana-Anaheim-Irvine in December '08 were lower than the national rate of 1.7 percent. But behind every silver lining there seems to be a cloud these days: the mortgage delinquency rate has increased dramatically in the OC cities, jumping from 2.80 percent in December '07 to 4.80 percent in December '08. The percentage is based on mortgage loans that were 90 days or more delinquent.

You can check how your own zip code or individual properties are doing here.

In mid-November, I wrote a post about my friend having to give up her Great Dane Milo (pictured at left) and asked for help from ustedes. With an assist from LAObserved, I received dozens of email from folks interested in adopting Milo. I'm glad to report Milo quickly found a home, and perhaps the most deserving home possible.

As my friend recounted, there were many people interested in adopting Milo, both those who were familiar with Great Danes and those who weren't. But one family had a compelling story. It seems they were longtime owners of two Great Danes until one recently passed away. The family was sad, but the lone Great Dane was even more depressed. My friend took Milo to the family to see if Milo would get along with both the lonely Great Dane. They did. She's happy to report that Milo now spends his days following his new pal around wherever they go, in the secure setting of a loving family. God bless you, Milo, and gracias to all of you who wanted to help.

Now, back to reality...