Santa Margarita Ranch property on auction block
December 8, 2008
By KAREN VELIE
A thousand-acre parcel of the controversial Santa Margarita Ranch, owned by developer Ronald Hertel, is in default and will be sold at auction December 30.
Also on the block, this one slated for December 22, is a Pismo Beach Hertel development project; both will be offered at sales to be conducted near the entrance of the San Luis Obispo County Courthouse.
The properties being sold are at the center of numerous multi-million-dollar default judgments against Hertel in favor of commercial lenders. Transamerica Financial Life Insurance Co. is foreclosing on Hertel for failure to make payments on a $7.6 million loan on a parcel located on the Santa Margarita Ranch.
Hertel owns a portion of Santa Margarita Ranch in his name (the parcel in default), and another section jointly owned with Rob Rossi, Robert Fowler, Richard Willrodt , Clayton Woosley, Douglas Filipponi, and Cindy Wittstrom, according to a farm subsidy database.
Between 2004 and 2006, the group was paid more than $62,000 in federal livestock, wheat, barley, and safflower subsidies on one parcel in Santa Margarita Ranch, according to the database. Through farm subsidies, government funds are paid to farmers to help supplement their income.
In addition to the Santa Margarita Ranch judgment, Hertel owes Heritage Oaks Bank $7 million for a 2006 construction loan on an undeveloped parcel located at 360 Park Avenue in Pismo Beach. This auction will help the bank recover a portion of the money loaned for the proposed construction of 14 condominiums.
Hertel paid $1 million for the Pismo Beach property in 2002. He has not yet started construction of the condos or grading of the lot.
These two auctions, coupled with mounting default notices from Coast National Bank, illustrate the financial troubles in which Hertel and his partner Robert Fowler are enmeshed. Sources have provided CalCoastNews with information of an ongoing fraud investigation of Hertel and Fowler. Officials from the SLO County district attorney’s office denied the existence of an investigation.
On December 8, the Contractors State License Board suspended R. W. Hertel and Sons’ license for failure to comply with an outstanding civil judgment, and as the result of a contractors bond suspension.