Venture to Pay $200 Million for Firm : Genstar USA Officers to Join in Buyout

A group of executives at Genstar USA, a La Jolla-based land development company, has formed a joint venture with a subsidiary of Houston-based American General Corp. to buy Genstar USA for $200 million from parent Imasco Ltd. of Montreal.

Genstar USA’s assets include 14,000 acres of master-planned land, half of it in San Diego County, in five states. Local Genstar USA projects include property in Rancho Penasquitos, Santee, Mira Mesa, San Marcos, Sorrento Hills and the South Bay area.

Eleven Genstar USA executives have formed a San Diego-based company called Newland Group that is headed by Chairman Frank Dembinski, President Robert McLeod and Executive Vice President Paul Cote.

American General, a financial services company, is providing financing for the deal and will own 75% of the joint venture. The sale is scheduled to close later this month.

Imasco acquired Genstar USA’s former parent company, Genstar Corp., for $2.6 billion in 1986 and has since divested nearly all of its assets except the land company and a trust company called Canada Trustco.

Genstar USA’s largest San Diego County project is 3,000 undeveloped acres in Penasquitos. Genstar’s as-yet-unnamed Santee project totals 2,500 acres and will ultimately see the construction of 5,500 housing units, Cote said.

Primarily a residential developer, Genstar USA owns commercial property as well. The Sorrento Hills site, near the intersection of Interstate 5 and Interstate 805, is destined for office and industrial buildings, Cote said. Genstar USA recently obtained the Sorrento Hills property in a swap with the City of San Diego involving undeveloped land in Penasquitos.