The decision regarding Boeger Land Investments LLC came out of a closed session at the board's July 20 meeting, according to County Counsel Anita Grant.
At Tuesday's board meeting, supervisors approved a consent agenda that included adopting a resolution authorizing commitment of monies paid through the firm's Chapter 11 Bankruptcy plan to the system upgrades.
Developer Matt Boeger has maintained Boeger Land Investments LLC as a holding company for a 50-percent portion of a 110-acre lakeside property called the Marina at Lyons Creek, as Lake County News has reported.
Boeger is a principal in Boeger Land Development and president of Cristallago Development Corp., which this spring received the Board of Supervisors' approval on its housing and resort development in the north Lakeport area.
He told Lake County News in an interview last year that the marina property was purchased out of bankruptcy, with an already large accrued tax liability.
The Lake County Tax Collector told Lake County News that the tax liability, through this past June 30, was $1.4 million, but court documents filed this month put the amount at $1.9 million.
In June 2009, Boeger Land Investments filed for Chapter 11 bankruptcy protection after Westamerica Bank, which holds a $500,000 note on the property, attempted to foreclose on the property, according to court documents.
The marina property originally was proposed to be connected to an easement to Cristallago, but the final plans didn't include the marina, according to Emily Minton, a county planner who has worked on the project. Boeger said last year he still planned to develop the property under a club structure that would be available to Cristallago residents.
The land is important for another reason – it includes an easement that will provide water for the Cristallago development. Boeger told the Lake County Planning Commission in September 2009 that the water rights and the easement is held free and clear by North Lakeport Water System Inc.
The easement document shows that the two partners in the property, Boeger Land Investments and Clovander Inc., granted the North Lakeport Water System Inc. the easement.
Earlier this month Westamerica Bank lodged a conditional objection to the confirmation of Boeger Land Investments' second amended plan of reorganization.
Documents filed on July 12 showed the bank wanted to see the Board of Supervisors' support for a financing plan to pay off the back property tax.
The filing reported that a new private lender, Diversified Lending & Real Estate of Ukiah, has agreed to put up $1,285,000, of which $800,000 will be used to buy the county's property tax debt, with the remainder going to the firm to pay other costs. Boeger will remain in control of the firm.
Westamerica will retain its lien and get a new interest only note payable quarterly at prime plus 2 percent, which will be due in three years.
The bank's filing noted that the county had “tentatively agreed that the entire $800,000 it receives will be used to fund a water treatment facility” that will benefit the marina property and surrounding areas.
However, it also stated that there was a “critical uncertainty” about the county's support for the plan, and pointed out that, at that time, there was no resolution authorizing the agreement.
Grant said the board's resolution was to respond to Westamerica's questions about what the county intended to do with the property tax funds. She said the bank wanted to know if it could secure its own claims on the land.
She said the board is continuing its commitment to use the money to improve the north Lakeport water system if it receives the funds.
Westamerica noted in its filing that if Boeger Land Investments “is prepared to honestly and reasonably respond” to the bank's concerns, and if the plan had the county's backing, it would withdraw its objections to the reorganization plan.
Court documents show that another hearing on the Boeger Land Investments case is scheduled for Aug. 5 in Santa Rosa.
E-mail Elizabeth Larson at
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