$5 million for Kings Beach properties
A California developer has offered $5 million for a collection of downtown Kings Beach properties being sold in a felony bankruptcy and fraud case.
The developer, S.K. Brown Investments, will still have to go to a Dec. 11 auction of the property in San Jose and outbid any other potential buyers. But if no one challenges the bid, the property will be sold to the company for $5 million, said Dwight McCarthy, a representative for S.K. Brown.
The land for sale houses several shops along Highway 28, including Lucky 7 Tattoo, Kentucky Fried Chicken, Scraps Dog Bakery, a small strip mall, a trailer park and undeveloped land.
Brown is a commercial developer based in Granite Bay, Calif., but with experience across California, said McCarthy. Brown has owned a home at Tahoe for the last 25 years.
“He is one of, if not the best, purchaser one could expect to have out of a situation like this,” said McCarthy.
No other bidders have registered for the Dec. 11 property auction, he said.
Michael Dunsford, a local real estate agent with Century 21 who has worked on the sale, said Brown knows the Tahoe-specific hurdles with which he will have to deal in order to redevelop the properties.
“S.K. Brown has done a whole lot of homework. He knows what he is getting into,” said Dunsford.
In the felony bankruptcy and fraud case,.Santa Clara businessman Michael Schneider allegedly sold phony deeds of trust to investors in a 10-year scheme where he pocketed the investments or kept investors fooled into paying loans long after they were paid off, investigators said.
The investment company Schneider ran was called California Plan Inc. and was headquartered in San Jose.
The wheels began to fall off the scam when the group of investors Schneider was allegedly defrauding became so large he could no longer keep up with interest payments.
When the scheme collapsed, many elderly investors lost their retirement savings.
Schneider is charged on suspicion of stealing more than $17 million from Santa Cruz County investors alone. Other victims live across the state and the amount alleged in the fraud case totals more than $35 million, according to investigators.
Schneider’s properties all across the state, including 15 pieces of property in Kings Beach, were confiscated in the fraud and bankruptcy case. A trustee is working with the courts and Realtors to sell off the land and raise money to repay some of Schneider’s debts.
Schneider is being held on a total of $15 million bail, $10 million in Santa Cruz County and $5 million in Santa Clara County, for more than 100 fraud-related felony charges.
The courts and the bankruptcy trustee have determined that $5 million is a fair offer for the Kings Beach properties. At the Dec. 11 auction in San Jose, any competitors will have to offer $5.25 million as the floor bid and bid up by $100,000 per offer until a winning bidder is awarded the properties.
Dunsford said that if S.K. Brown is the winning bidder, he plans to keep in place the tenants already housed in the downtown properties.
“He doesn’t want to displace anybody,” Dunsford said.
Following the purchase of the property, the new owner, whether it be S.K. Brown or another development company, will likely begin planning for redevelopment along Highway 28.
A section of property along Highway 28 from the liquor store Spirits of Tahoe to the Kentucky Fried Chicken (but excluding the miniature golf course) has preliminary approvals for a mixed-use village.
The old buildings would be torn down, according to the existing conceptual plan, and new two-story buildings would be built with a mix of housing and commercial
Realtors and community members say the change of ownership could spark a revitalization of downtown Kings Beach.
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