Thursday Oct 07 2010
40-acre industrial park foreclosure a false alarm
By: Gloria Young Journal Staff Writer
4.8-acre section of Auburn Airport area parcel affected
City officials say a 40-acre piece of land at the Auburn Airport industrial park listed in pre-foreclosure is an error. The foreclosure trustee company that placed the listing, Assured Lender Services Inc. of Orange County, should show only a 4.8-acre section of the parcel, according to Bob Richardson, Auburn city manager. Fine Particle Technology, based in San Diego, owns the the two buildings at the site. Carpenter Advanced Ceramics, now known as Morgan Technical Ceramics Auburn, leases the smaller of the two buildings at 13395 New Airport Road. Auburn City Attorney Michael Colantuono explained Wednesday that the mistake arose because the entire 40 acres is under one assessor’s parcel number. “The city has granted long-term leases of portions of that site to various businesses that built buildings (on the leased property),” he explained in a phone message. “Because they have long-term leases, they can get mortgages against those leases. One of the buildings is apparently in default and the lender is foreclosing on that leaseholder.” The result would be that the bank could take over the building and the lease and then lease it to other tenants, he explained. “We very quickly figured out they were foreclosing on only one building and it does not affect other tenants out there,” Colantuono said. Ceronix owner Don Whitaker, whose company is located at the airport, discovered the 40-acre foreclosure listing in late August. It got his attention because, although his buildings are not on city land, the businesses on the parcel are his nearby neighbors, including sculptor Douglas Van Howd and Auburn Printers. “What impact does (the foreclosure) have on the other property owners?” he asked. Whitaker took the matter to Auburn Airport Manager Ivan Karnezis. “He was totally surprised and said he’d look into it,” Whitaker said. But that was (several) weeks ago and he hasn’t gotten back with an answer since then, Whitaker said Wednesday. “I thought if I asked the airport manager, I could get an answer,” Whitaker said. “No one is upset. We’re curious.” According to Richardson, the city owns the 40-acre parcel outright and has no loans against it. “Unfortunately, the document (from Assured Lender Services) provides misleading information creating an inconvenience for our tenants, who are at no risk of any interruption of their leaseholds,” Richardson said. Not only does it cause concern for businesses at the airport, but potential purchasers may be knocking on doors thinking (those addresses) are part of the transaction, when they’re not, he added. It presents an unusual problem for the city. “You’re talking about a leasehold structure created 30 or 40 years ago (now) at a time of unprecedented foreclosures across the country,” Richardson said. “As we’ve seen with major banking institutions such as Bank of America, more and more mistakes are being made in the foreclosure process because of volume. This appears to be simply another example of that.” Correcting the problem has been slow going. “Our attorneys contacted (Assured Lender Services) a month-and-a-half ago and informed them of their errors,” he said. “So we expected to see more movement on the part of the trustee than we have so far.” In the meantime, foreclosure proceedings against the Fine Particle Technology buildings and land lease appear to be moving forward. “The notice of a trustee sale has not been issued yet,” Richardson said. “But as far as we know, it is going to auction.” The Auburn Municipal Airport is on 285 acres, with 80 acres designated for the airport industrial park. Reach Gloria Young at email@example.com.