Kennedy Funding Inc., and its partner, Anglo-American Financial LLC, the investor groups that won control of Saguaro Ranch in the Tortolita Mountains earlier this month after a trustee sale, plan on selling the entire property to a developer.
“Kennedy Funding is not a developer, it’s a lender,” said Dave Green, a Kennedy Funding spokesman. “There are a significant number of buyers out there right now and we are in dialogue with a number of them about purchasing the property.”
Kennedy Funding and Anglo-American Financial took ownership of Saguaro Ranch, including McClintock’s restaurant, with a winning bid of $14 million at a trustee sale held as a result of their foreclosure action after Saguaro Ranch developer Stephen Phinny defaulted on a $50 million loan recorded in December of 2005. Kennedy Funding and Angle-American were the beneficiaries on the defaulted loan.
Records at the Pima County Recorder’s Office show the borrowers as Saguaro Ranch Investments LLC and Saguaro Ranch Development Corp.
Saguaro Ranch had plans to develop 180 single-family homes in the Tortolita Mountains on a 1,035-acre tract near North Thornydale and West Moore roads. Some lots in the project sold for $1 million before the real estate market hit the skids.
The two Saguaro Ranch corporate entities, along with PCC Investments Inc., Saguaro Guest Ranch Management Corp. and Saguaro Ranch Real Estate Corp., filed voluntary Chapter 11 bankruptcy petitions with the U.S. Bankruptcy Court for the District of Arizona on Feb. 13, 2009.
At the time of the filing, the bankruptcy petition’s Schedules of Assets and Liabilities reported Saguaro Ranch’s assets as approximately $147 million, with liabilities of approximately $38 million. Kennedy Funding and Anglo-American Financial were listed as the largest secured creditor with a claim of $23.9 million.
A protracted battle developed in Bankruptcy Court over Saguaro Ranch’s reorganization plans, three of which were submitted to the court and all rejected. After U.S. Bankruptcy Judge Eileen W. Hollowell denied a motion June 9 for an emergency stay of the foreclosure auction, the way was clear for the trustee sale to proceed.
Green pointed out that Kennedy Funding is looking to dispose of all the Saguaro Ranch assets.
“We won’t be selling pieces off,” he said. “It will go all in one piece and we are talking with a number of potential buyers who believe in the long-term prospects of Saguaro Ranch.”
Calling Saguaro Ranch “a spectacular property,” Green said, “Whoever buys this property will hit a home run. We don’t think it will be difficult to sell because of the quality of the development, its home sites and views. Saguaro Ranch is not like a lot of land around the country that’s undevelopable.”
Green noted that access to money for such projects is tight these days because banks are not lending as freely as in the past.
“Whoever picks up Saguaro Ranch will probably use a lender like Kennedy Funding, which has been in business for 25 years and has a very good track record,” Green said. “Many borrowers are turning to firms like Kennedy Funding because of their access to money.”
While Green could not speculate on what price range the Saguaro Ranch property would sell for, he confirmed that any sale would include McClintock’s restaurant, which has been closed for the summer.