News Room
City finds solution for Deer Creek Subdivisionss
By Mary Weston-Oroville Mercury-Regsiter
September 24, 2003
The city is working on a solution that would allow a subdivision to be developed after lying vacant for over 10 years.
The 150-unit subdivision runs northeast of Grand Avenue behind the county buildings on Table Mountain Boulevard and along the west side of the Feather River in Oroville. Many of the lots, some overlooking the river, have already been developed with sidewalks, curbs and gutters.
However, the subdivision has more liens and assessments against it that the property is worth. The city has been working with Tower Investments to solve the problem. Finally, the investment company and the city have come up with a plan to allow the subdivision to go forward. "We have a developer that's ready to build houses there," said Chris Welborn of Tower Investments.
The city doesn't own the subdivision, but it has an obligation to foreclose on the delinquent property owners and have a foreclosure sale. The city became obligated to foreclose in 1992 when the city issued assessment district bonds to cover the cost of public improvements required to develop the subdivision. Later, the Oroville Public Finance Agency used the assessment district bonds as security to issue revenue bonds, according to a report by Finance Director Sandra Sato.
"The property owners never made a single payment on this subdivision," Sato said. Subsequently, the owner filed bankruptcy, and the city has tried to sell the property. But there have been no bidders at foreclosure sales because the property value was less than the delinquent penalties and interest owed on the property, according to a report by Sato.
Now, Tower Investments has bought enough of the bonds on the open market to cure the delinquencies and find a developer to finish the subdivision. Tower will deposit money and bonds in an escrow account, and the city will initiate a credit bid at a foreclosure sale to get title to the property. Then, the title will be given to the investment company, and the developer will buy the property.
"This will be an economic boost to Oroville," Sato said. She said the subdivision has the potential to jump-start development, which has already taken off, in the area. The location of the property along the riverfront is also in tune with the city's riverfront development plans.