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ENLARGE
TRUCKEE, Calif. — Economic conditions and a big winter may have saved Donner Summit — for now.
In late June, a notice of default was filed in Nevada and Placer counties against Royal Gorge, the Donner Summit resort and housing development proposed by Irvine, Calif.-based Armed Forces Bank.
The filing noticed Royal Gorge's owners they are $16.74 million behind on paying a loan on the property. Area conservationists welcomed the news after years of opposing development on Donner Summit.
Royal Gorge owner Kirk C. Syme did not return calls or e-mails for comment on this story Monday. Employees at Royal Gorge pointed to a statement he released on the resort's website.
“Local newspapers have recently reported on a ‘Notice of Default' filed on our property by our lender. Please be advised that we are working cooperatively with our lender to resolve this matter,” Syme, a developer from Burlingame, Calif., wrote. “An unfavorable weather cycle last season and a tough economy have proven to be very challenging for Royal Gorge and many other businesses in the region. But we are confident we will resolve this matter with our lender and continue operations ‘Business as Usual.'”
A group that includes Syme purchased the 4,000-plus acre resort in 2005 for more than $30 million. The property rests mostly in Placer County but includes some portions of Nevada County as well.
Plans to develop a 950-unit subdivision in the area drew concern from conservationists, who said projected needs for water use by the development — which included a dam and building in the area of the headwaters of the Yuba and American rivers — would damage the fragile mountain ecosystem on Donner Summit.
“That the effort to develop Donner is in default is no surprise,” said Tom Mooers, executive director of the Nevada City-based Sierra Watch, which has opposed the project. “It was not an economically sensible development plan even when the economy was clipping. Donner Summit is a place so many of us are committed to protecting ... and what we've been working for years is to make sure the development project never got off the ground.”
Conservation groups are going to watch the upcoming proceedings carefully, Mooers said. Armed Forces Bank could set a sale date for the property by mid-September. Officials at the bank would not comment for this story.
“There are three routes this property could go,” Mooers said. The first two are that the property could remain with the Syme group or be sold to a similar group willing to proceed with the same “development nightmare” pursued by Syme; or it could “die of 1,000 cuts” and be subdivided and developed piecemeal over the next few decades, Mooers said.
Thirdly, the property could be bought by a land trust and kept for conservation purposes, preserving the miles upon miles of cross country skiing trails the resort has to offer, Mooers said.
“There are a lot of people who care about Donner Summit who could pitch in and make that happen,” Mooers said. “It's an iconic place. The crossroads of the American West. And, the price is never going to be cheaper. If not now, when?”
The default filing leaves at least one agency in limbo. In Serene Lakes, the Sierra Lakes County Water District recently sent a letter to Royal Gorge, which falls within the district's boundaries, about the district's upcoming water rights application with the state, said Wade Freedle, who serves as the district's board president.
District officials asked Royal Gorge for about $400,000 to pay for California Environmental Quality Act reports which would be necessary if Royal Gorge was to be included in the district's water-use figures in the application. Royal Gorge would more than double the district's water use figures, Freedle said. But, without a response from Royal Gorge, district officials will need to move on with the process later this summer, said Martin Bern, board secretary.
In late June, a notice of default was filed in Nevada and Placer counties against Royal Gorge, the Donner Summit resort and housing development proposed by Irvine, Calif.-based Armed Forces Bank.
The filing noticed Royal Gorge's owners they are $16.74 million behind on paying a loan on the property. Area conservationists welcomed the news after years of opposing development on Donner Summit.
Royal Gorge owner Kirk C. Syme did not return calls or e-mails for comment on this story Monday. Employees at Royal Gorge pointed to a statement he released on the resort's website.
“Local newspapers have recently reported on a ‘Notice of Default' filed on our property by our lender. Please be advised that we are working cooperatively with our lender to resolve this matter,” Syme, a developer from Burlingame, Calif., wrote. “An unfavorable weather cycle last season and a tough economy have proven to be very challenging for Royal Gorge and many other businesses in the region. But we are confident we will resolve this matter with our lender and continue operations ‘Business as Usual.'”
A group that includes Syme purchased the 4,000-plus acre resort in 2005 for more than $30 million. The property rests mostly in Placer County but includes some portions of Nevada County as well.
Plans to develop a 950-unit subdivision in the area drew concern from conservationists, who said projected needs for water use by the development — which included a dam and building in the area of the headwaters of the Yuba and American rivers — would damage the fragile mountain ecosystem on Donner Summit.
“That the effort to develop Donner is in default is no surprise,” said Tom Mooers, executive director of the Nevada City-based Sierra Watch, which has opposed the project. “It was not an economically sensible development plan even when the economy was clipping. Donner Summit is a place so many of us are committed to protecting ... and what we've been working for years is to make sure the development project never got off the ground.”
Conservation groups are going to watch the upcoming proceedings carefully, Mooers said. Armed Forces Bank could set a sale date for the property by mid-September. Officials at the bank would not comment for this story.
“There are three routes this property could go,” Mooers said. The first two are that the property could remain with the Syme group or be sold to a similar group willing to proceed with the same “development nightmare” pursued by Syme; or it could “die of 1,000 cuts” and be subdivided and developed piecemeal over the next few decades, Mooers said.
Thirdly, the property could be bought by a land trust and kept for conservation purposes, preserving the miles upon miles of cross country skiing trails the resort has to offer, Mooers said.
“There are a lot of people who care about Donner Summit who could pitch in and make that happen,” Mooers said. “It's an iconic place. The crossroads of the American West. And, the price is never going to be cheaper. If not now, when?”
The default filing leaves at least one agency in limbo. In Serene Lakes, the Sierra Lakes County Water District recently sent a letter to Royal Gorge, which falls within the district's boundaries, about the district's upcoming water rights application with the state, said Wade Freedle, who serves as the district's board president.
District officials asked Royal Gorge for about $400,000 to pay for California Environmental Quality Act reports which would be necessary if Royal Gorge was to be included in the district's water-use figures in the application. Royal Gorge would more than double the district's water use figures, Freedle said. But, without a response from Royal Gorge, district officials will need to move on with the process later this summer, said Martin Bern, board secretary.
