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Financial troubles trip up SLO developer

By   /   Monday, February 9th, 2009  /   Comments Off on Financial troubles trip up SLO developer

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Unpaid taxes totaling nearly $300,000 are the latest problems piling up for Robert Fowler, the owner of a 100-acre tract near the Santa Margarita Ranch in San Luis Obispo County.

California officials have issued a $293,757 tax lien against Fowler. Last fall, he received a default notice on the 100-acre parcel in Santa Margarita that he bought for $2.2 million in 2006.

His parcel is close to a 111-home development at the Santa Margarita Ranch that was approved by the SLO County Board of Supervisors late last year and is tied up in litigation over that approval.

According to state tax records, Fowler owed about $619,000 in taxes, penalties and interest for the 2005 tax year. Payments and adjustments brought down the total owed. Until June, Fowler was an officer at Ventura-based developer R.W. Hertel & Sons, a company whose creditors have sought to force it into bankruptcy.

In an interview with the Business Times just prior to press time, Fowler said he was trying to regroup after a series of reverses brought about by the collapse in the region’s housing market.

“As you might imagine, being a homebuilder, things have been very difficult in the past few years,” he said.
Fowler also said the default notice on his Santa Margarita property had been rescinded, that he was making $20,000 a month payments on his taxes and that he was blindsided by the tax lien.

Hertel & Sons had its contractor’s license suspended in August, state records show. A spokesman for the contractor’s license board said the suspension occurred because Hertel & Sons failed to pay a $24,000 civil judgment to Santa Clarita-based Andy’s Precision Stripe & Seal.

On Jan. 26, Andy’s and two other creditors filed documents seeking to force Hertel & Sons into an involuntary Chapter 7 bankruptcy. The creditors say they are owed more than $42,000, bankruptcy court documents show.

Two phone numbers listed for Hertel & Sons were disconnected, but Fowler said the company, like many others, fell victim to the housing market collapse.

“We had four projects going, and all four lenders pulled the loans on us. That put us out of business,” he said. He left the firm in June.

Combined, Fowler and Hertel & Sons owner Ron W. Hertel own at least $11 million in San Luis Obispo real estate, including portions of a subdivision in southern Atascadero called El Jardin de Las Lomas, according to a search of title records. Countrywide Financial Corp. supplied the loans Hertel and Fowler used to buy the Atascadero subdivision properties and Fowler’s Santa Margarita tract.

Fowler said that starting in 2006, Hertel & Sons’ financial woes forced it to shut down offices in Stockton, San Luis Obispo and Ventura and lay off about 50 employees. The Ventura office closed over the summer.

In May 2008, a Los Angeles County court ruled that Hertel & Sons breached its contract with road contractor Andy’s, according to court records. The court awarded the Santa Clarita firm more than $24,000 after no one from Hertel & Sons showed up during the case, court records show.

Later in May, Hertel & Sons abruptly halted construction on a $25 million hotel and condominium resort in Eagle Point, Ore., according to reports published in the Mail Tribune in Medford, Ore.

By early August, lender Bank of the Cascades had taken back the property, according to the newspaper’s reports. Fowler said the bank had funded the purchase of the land and improvements to it but “just decided to quit funding” on the construction phase.

In mid-August, the state contractor’s licensing board had suspended Hertel & Sons’ license for failure to pay the $24,000 judgment to Andy’s, according to state records and a contractor’s license board spokesman. Hertel & Sons’ building in Ventura was sold Jan. 13 for $1.3 million, title records show.

Santa Margarita Ranch has become one of the most controversial developments on the Central Coast, facing lawsuits from environmentalists and community groups after it got the green light from the county board of supervisors on Dec. 23. Shortly after that vote, a new board was sworn in that is more cautious of new development.

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