Post by jeffolie on May 30, 2009 12:43:23 GMT -6
CALPERS $922M loss
CALPERS management ought to be sent to jail for losing this money. The state of California is on the hook for the pensions and retirements of a lot of civil servants at a time when California voters are sick and tired of increasing taxes and proved it by rejecting ballot measures that would have increased taxes. California government is a tragedy without humor.
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The California Public Employees' Retirement System would lose its entire $922 million investment in a Southern California land deal under a plan that could be approved by a bankruptcy court judge Monday.
The ruling would wrap up one of the pension fund's worst real estate ventures. CalPERS' housing portfolio, once estimated to be worth $9 billion, was reported to be $6 billion last fall, with projected losses on the deal factored in. CalPERS' total investment portfolio is $180 billion.
CalPERS bought a majority stake in the 20,000-home Newhall Ranch project in January 2007, hoping for long-term returns on a major undeveloped tract in Los Angeles County.
But the project's developer, LandSource Communities Development LLC, faltered as the real estate market crumbled. It filed for Chapter 11 bankruptcy protection in June.
CalPERS considered buying back into the project through the bankruptcy process. The new stake would have been no greater than $55 million, court records showed.
That deal is now off, CalPERS spokeswoman Pat Macht said Friday.
"We conducted a thorough review of the proposal and decided not to participate because it doesn't fit well with the strategic direction we're taking in real estate," she said.
Macht said CalPERS' real estate portfolio managers now are looking mainly at commercial properties that generate immediate income.
But while the pension fund is moving on, Lennar Corp., the Miami-based home-building giant that sold its stake in the Newhall Ranch project to CalPERS in 2007, is hoping to get back in.
Lennar sold its 50 percent stake for $660 million. Now, it wants to buy a 15 percent slice for $140 million in a deal that would put an affiliate in charge of the development.
The project, which developers plan to build over several decades, was proposed in the early 1990s, but legal challenges over water rights and other environmental issues delayed construction.
Marlee Laufer, a spokeswoman for Newhall Land and Farming Co., the LandSource subsidiary developing the project, said the deal would provide the financing to break ground as early as 2012.
www.sacbee.com/business/story/1903524.html
CALPERS management ought to be sent to jail for losing this money. The state of California is on the hook for the pensions and retirements of a lot of civil servants at a time when California voters are sick and tired of increasing taxes and proved it by rejecting ballot measures that would have increased taxes. California government is a tragedy without humor.
========================================================
The California Public Employees' Retirement System would lose its entire $922 million investment in a Southern California land deal under a plan that could be approved by a bankruptcy court judge Monday.
The ruling would wrap up one of the pension fund's worst real estate ventures. CalPERS' housing portfolio, once estimated to be worth $9 billion, was reported to be $6 billion last fall, with projected losses on the deal factored in. CalPERS' total investment portfolio is $180 billion.
CalPERS bought a majority stake in the 20,000-home Newhall Ranch project in January 2007, hoping for long-term returns on a major undeveloped tract in Los Angeles County.
But the project's developer, LandSource Communities Development LLC, faltered as the real estate market crumbled. It filed for Chapter 11 bankruptcy protection in June.
CalPERS considered buying back into the project through the bankruptcy process. The new stake would have been no greater than $55 million, court records showed.
That deal is now off, CalPERS spokeswoman Pat Macht said Friday.
"We conducted a thorough review of the proposal and decided not to participate because it doesn't fit well with the strategic direction we're taking in real estate," she said.
Macht said CalPERS' real estate portfolio managers now are looking mainly at commercial properties that generate immediate income.
But while the pension fund is moving on, Lennar Corp., the Miami-based home-building giant that sold its stake in the Newhall Ranch project to CalPERS in 2007, is hoping to get back in.
Lennar sold its 50 percent stake for $660 million. Now, it wants to buy a 15 percent slice for $140 million in a deal that would put an affiliate in charge of the development.
The project, which developers plan to build over several decades, was proposed in the early 1990s, but legal challenges over water rights and other environmental issues delayed construction.
Marlee Laufer, a spokeswoman for Newhall Land and Farming Co., the LandSource subsidiary developing the project, said the deal would provide the financing to break ground as early as 2012.
www.sacbee.com/business/story/1903524.html