CALIFORNIA CITY — The attempt to sell Silver Saddle Ranch and Resort may see success on a second attempt, according to an update from the property’s state-approved receiver on Oct. 14.
Regulatory Resolutions, operated by Thomas McNamara, agreed to the sale of the 130-acre property for $2.1 million to the proposed buyer Aaron Mamann after a previous arrangement was canceled.
The motion for the court to approve the sale is scheduled for Nov. 6. If approved, the closing date would occur within 60 days, according to the receiver.
Both properties are located in Cal City’s Second Community.
Mamann also fielded a separate offer to purchase the approximate 1,020 acres of the adjacent Galileo Project parcels, which are also under state receivership for an additional $900,000. The request to have the sale approved will be filed separately.
The receiver filed a motion on Oct. 13 with the San Diego Superior Court to approve the sale. In its motion, the receiver stressed the desire to unload the storied property as it represented its largest and most costly asset. The motion cites water costs alone ran more than $285,000 since it was placed in the receiver’s hands in October 2019.
“While the Ranch may be the Receivership Estate's most valuable asset, its costly upkeep, utilities, and insurance will soon deplete the limited funds of the Receivership Estate if it is not sold,” the motion states.
A footnoted in the motion states that because of limited funds in the receivership estate account, “the Receiver has temporarily withheld payment of his and counsel's fees and expenses in order to ensure the Receivership Estate has sufficient funds to pay ongoing Ranch expenses.”
Silver Saddle Resort was part of an investigation and lawsuit filed by the California Department of Business Oversight in 2019 that looked into fraudulent land sale activities in California City.
DBO contends that businessman Thomas Maney and other associates conned people into purchasing land shares on the Galileo Project with the promise of earning a significant return on investment down the road. The alleged scheme targeted Filipino, Chinese and Spanish-speaking individuals, according to an Oct. 1, 2019, DBO news release.
DBO also stated that many victims spent as much as $30,000 in a scheme that lasted eight years. Silver Saddle Resort was the mechanism by which the sales were made, facilitating sales events and provided investors with a free night’s stay and tours of the ranch.”
According to the receiver, the resort operated at a loss that eventually hit $1.5 million a year but continued to operate on subsidies from other related business the defendants operated.
When the state filed suit against Maney and others, it filed an injunction requiring the resort to be placed into receivership, for the defendants to seize all further land sales and freeze related assets.
Proceeds from Silver Saddle Resort and eventually the Galileo Project parcels will be used to reimburse the receiver’s costs and provide remuneration for investors who sunk money into purchasing Galileo property.
The land sale scheme later became the subject of an eight-part LAist podcast “California City.”
The proposed call to approve the land sale isn’t the first time the receiver has anticipated selling the resort and the project land.
The ranch and the property were initially marketed in May under real estate company Kidder Matthews, with Teresia Knight and Greg Myers as the listing agents. The price was adjusted a few times before stabilizing at $1.87 million.
According to the motion, more than 33,000 emails were sent to Kidder Matthews’ west coast offices regarding the property, who communicated with 48 individuals interested in the property and provided tours for 12 groups.
In July, the receiver eventually accepted an offer from Kevin Feterik, who had partnered with local businessman Leland Krelle, for $1.77 million. The receiver also accepted a separate $775,000 offer from Feterik to purchase the Project land. The receiver moved to expedite the sale.
However, the receiver soon received complaints from Maney and from local businessman Rick Jones. According to court documents, Jones “claimed his offer was not given a full and fair evaluation.”
A previous motion stated that “Mr. Jones expressed a concern that he did not have a full and fair opportunity to pursue an offer which he provided to the broker. The Receiver took this claim seriously, his team exchanged correspondence with Mr. Jones, and he convened conference calls with the brokers.”
In that same brief, the receiver’s attorney, Edward Chang, noted that the real estate company handling the transaction and Jones have “sharply contrasting descriptions” of the sales process.
The receiver requested the court to cancel the escrows and refund Feterik’s deposit.
Feterik initially resisted the attempt to cancel the escrow. In a response filed with the court, calling it an “eleventh-hour plea to unwind a valid contract and that “it wreaks of impropriety and sour grapes based on obtuse contentions that do not withstand the requisite scrutiny required under the law.”
According to the receiver, Feterik eventually withdrew his objection and the receiver re-opened the sales process for both Silver Saddle and the Project properties. The resort was listed at $1.87 million and the Galileo Project at $919,746.
All parties, including Feterik and Jones, were encouraged to submit a last, best and final offer with a Sept. 14 deadline.
Two offers were made, which the receiver claims were unacceptable. One offer fell too low beneath the listing price. The second offer was made by Jones the night of Sunday, Sept. 13 for $1.8 million, with an $800,000 offer for the Project property.
According to the receiver’s motion, the offer “was submitted along with a joint venture proposal involving the Galileo Project investors” and also involved financing contingencies, compared to a previous all-cash offer by Jones.
Prior to the Sept. 14 deadline of 10 a.m., the receiver contacted Jones’ attorney for clarification of whether the offer “was contingent on acceptance of the joint venture proposal,” but no response came and the deadline elapsed.
The receiver’s motion later stated in footnotes that a joint offer with investors would have required rescinding an offering made by Maney and approval by the state, which would further complicate the sale. While Jones’ attorney eventually responded that the offer wasn’t contingent on any joint venture, the deadline had passed and Jones’ offer since rejected, though the receiver invited him to submit another offer through Kidder Matthews.
According to a written declaration from Knight, the listing agent, she and her partner attempted to contact Jones multiple times and spoke with him twice. Knight stated she emailed Jones the submission forms for the offer, confirmed the acreage size of the ranch listing and offered another tour, which was declined.
“Despite this significant outreach, l did not receive any offers from Mr. Jones, nor have I received any further communications from him,” Knight stated in her declaration.
The sales process continued and Mamann offered an initial offer of $1.8 million for the ranch and $600,000 for the Project land. Four days, Mamann upped the offer to $1.9 million and $650,000 respectively. The receiver countered at $2.1 million/$900,000, which was accepted. An escrow account was opened on Sept. 29 with a $100,000 deposit.
Ranch: What’s included
When Kidder Matthews began marketing the Silver Saddle property, the company developed a sales brochure and highlighted the resort’s features, including a host of amenities.
According to the court document, the ranch includes six primary buildings: a club
house with a restaurant, saloon, game room, library, hotel lobby, fitness center, and offices; an Administration building used by staff; a Sales Pavilion and three buildings with a total of motel-type rooms to house guests.
In addition to these structures, the ranch includes a stable and adjacent corral for animals, as well as a variety of amenities which were offered to guests: two swimming pools, a hot tub, man-made lakes, an RV park, and space for various sporting activities (miniature golf, basketball, tennis, volleyball, and badminton courts, etc.).
The receiver noted in the motion that “many of these amenities were modestly constructed, outdated, and poorly maintained.”
However, the sales pavilion, parking, and other related improvements are located on a 24-acre parcel is owned by the City of California City and leased to Silver Saddle Resort and Club which expires April 17, 2027.
“As part of the proposed sale, the Receiver and the Proposed Buyer will work cooperatively during the escrow period to secure the City of California City's consent to an assignment of the ground lease to the Proposed Buyer,” the motion states.