JAN 2, 2013 2:39pm ET

Receivership Sale Helps Preserve Sierra Nevada Land

JAN 2, 2013 2:39pm ET
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A landmark deal was recently completed to preserve more than 3,300 acres of the Sierra Nevada terrain that is home to one of the largest cross country ski resorts throughout the country.  

The Truckee Donner Land Trust and the Trust for Public Land, working together as part of the Northern Sierra Partnership, acquired the rights to the area near Lake Tahoe, Calif. that is rich in history and biodiversity for $11.25 million.

Included in the sale is the Royal Gorge Cross Country Ski Resort with its 3,000-plus acres of trail systems; the Summit Station day lodge; and the surrounding watershed area of Serene Lakes; the area around Lake Van Norden; and 350 acres of pristine land in Negro Canyon.

The sale was handled by Tom Olson and Alan Scott, who lead the brokerage division of Douglas Wilson Companies, which was the appointed receiver for this transaction.  

Perry Norris, executive director of the Truckee Donner Land Trust, called the deal “arguably one of the most important conservation victories for the Sierra in a decade.”

In 2005, the partnership of Kirk Syme and Mark and Todd Foster proposed to build a 950-unit recreation-centered conservation community, including trailside cabins, luxury condominiums, single-family homes, new ski areas and lodging, retail stores and parking lots at the site.

However, planning constraints related to availability of public services such as water, sewer and access, a determined community effort to “Save Donner Summit” and the overall economy and real estate collapse were too much for them to overcome. The developers eventually defaulted on a $16.7 million loan and the property’s lender, Armed Forces Bank, successor by merger to Bank Midwest, sought the appointment of a receiver in 2011 to handle the disposition of the asset.

“In my 30 years in this business, this is one of the most challenging—and yet rewarding—transactions I’ve been involved with,” said Douglas P. Wilson, the chairman of San Diego-based Douglas Wilson Companies. “We usually find a bump or two when we are named as receiver, but this time we faced a range of complexities as well as the community’s sensitivity about the land.”

As receiver, Douglas Wilson Companies faced many backdrops in order to complete this transaction along the Donner Summit, which is known as the trail used by the first wagon train through the Sierra Nevada as well as the site of the first transcontinental railway and the first transcontinental telephone line.

For example, Royal Gorge assets were comingled with other assets owned by the defaulting entities. Other problems that affected the sale of this land included: documents and contracts were in the wrong names, agreements for trail rights and liquor licenses were unclear, state requirements for upgrades on the Lake Van Norden dam were in dispute, and there were conflicting claims for water rights.

Initially, Royal Gorge and Negro Canyon were offered together with the 33-room Rainbow Lodge as a portfolio at $26 million. But the brokerage division, Wilson said, couldn’t find anyone who wanted it all.

“It quickly became clear that we were looking for two buyers and decided to sell the Royal Gorge property apart from the lodge,” Wilson added. “History will reflect that this is one of the most impactful acquisitions in the region in terms of its size, location and history of the property.”  

REO