Investors scoop up 1,200 acres in Rancho Murieta
A group led by current homeowners paid an undisclosed price for 1,200 acres at Rancho Murieta, including the two 18-hole golf courses and more than 700 acres of undeveloped land that's being eyed for hundreds of additional houses.
The deal, which closed Friday, is the latest chapter in the occasionally turbulent history of the isolated slice of suburbia 20 miles southeast of Sacramento along Highway 16.
Four decades after it was founded, the county's first master-planned community has only about 2,500 homes – half as many as originally planned. Part of the problem was unstable ownership; during the 1980s and early '90s, Rancho Murieta was controlled by a swashbuckling Yolo County agribusinessman who lost the property to foreclosure.
"People who live here love it," said John Sullivan, a Rancho Murieta homeowner and leader of the group that just made the big purchase. "We've had our turmoils in the past and it's our mission … to finish the job."
Sullivan's group wants to build hundreds of homes on the property. He also plans to build an 83-room hotel and other amenities on a separate parcel that he and other investors bought last year near the community's gas station on Highway 16.
The hotel, expected to cost around $12 million, would serve visitors to Rancho Murieta's equestrian center, Sullivan said.
"The closest hotel is 14 miles away – we're looking forward to getting that hotel finished as quickly as we can," he said.
The purchase serves as further evidence of recovery in the area's housing market, said Greg Paquin of the Gregory Group, a Folsom real estate consultant.
"Clearly that's part of the message – the market's good," Paquin said.
Sullivan said his group includes the owners of the equestrian center.
Sullivan has been involved in various leadership roles at Rancho Murieta for years and is associated with two development firms, Cosumnes River Land and Lone Pine Investments.
The housing and the hotel would require approval from the Sacramento County Board of Supervisors. The housing project is probably two years away from securing approval, while the hotel proposal is much further along.
The county approved more than 600 new homes on different parcels at Rancho Murieta before thehousing market collapsed in 2007. Those plans are still pending, with permits held by several different developers.
Those 2007 approvals were controversial. The Environmental Protection Agency and other regulators questioned the potential loss of habitat. Some current residents were fiercely opposed, saying the new homes would violate earlier promises about open space.
The group that bought the land Friday could propose a development plan that would meet with fewer objections. The 700 acres could handle 1,100 new homes, but Sullivan said "our plan is to be somewhat lower in the density."The land is generally north of the Cosumnes River and east of the main entrance on Murieta Parkway.
"Most of the investors have been residents for decades," Sullivan added. "We've been in Rancho Murieta since almost the beginning, one way or another."
Rancho Murieta was developed by the pension trust fund of Operating Engineers Local 3, a major union based in the East Bay.
The union has operated an apprenticeship training program at Rancho Murieta for years. Union trainees operating heavy machinery carved out the golf courses, man-made lakes and other features of the property.
In 1985, the union pension fund sold the community to Jack Anderson, a highly successful tomato farmer from Davis.
Anderson added Rancho Murieta to a growing portfolio that included 200,000 acres of farmland, the Dunes casino in Las Vegas and the gleaming "Emerald Tower" office building on Capitol Mall in Sacramento.
The sale followed several years of litigation, in which Anderson claimed the pension fund had reneged on an earlier deal to sell him the property.
In 1993, the pension fund took Rancho Murieta back. It foreclosed on the property after Anderson defaulted on a $27 million note, one in a series of defaults and other financial troubles that would bring his empire to ruin by the end of the 1990s.
Officials with the union and its pension fund couldn't be reached for comment Tuesday. Ken Noack Jr., a Cornish and Carey Commercial broker who represented the pension fund in the sale, said he wasn't sure why the union wanted to unload the property.
Noack said the union will lease about 50 acres back from the new owners to continue running the training center.
"They'll be here for the foreseeable future," Sullivan said.