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Two Oceanfront Dana Point Gems Are Up for Sale

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TIMES STAFF WRITER

There is nothing so crass as a “for sale” sign on two of the largest undeveloped parcels on the Southern California coast. But the two Dana Point properties are for sale nevertheless, and people in this quiet Orange County beach town have been wondering for months what will happen to the land.

Now, they have a few clues.

One parcel, a 232-acre swatch at Monarch Beach owned by Qintex, the debt-ridden Australian company, will probably be sold in the next few months, according to the accountant presiding over the sale of Qintex assets. The land is one of the last large undeveloped beachfront parcels so close to Los Angeles.

Among the possible buyers, he said, are two big Japanese concerns that own half of Qintex’s three other resorts and hold an option to buy half of the Monarch Beach property.

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Qintex had planned to build a $1-billion resort on the Monarch Beach property and a nearby parcel before the company slid into receivership late last year.

The receiver, John Allpass of accounting firm of KPMG Peat Marwick’s office in Brisbane, Australia, said this week that negotiations to sell the property continue and a deal is expected “shortly.”

Allpass wouldn’t say who is trying to buy the land. But the Japanese concerns--the consumer credit company Nippon Shinpan and the huge trading firm Mitsui & Co.--are a possibility, he said.

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Qintex executives didn’t return phone calls for comment.

Meanwhile, Qintex was also going to build another hotel on property called the Headlands about a mile south on Coast Highway. Qintex had an option to buy the land but lost it when it couldn’t meet the payments late last year. These 115 acres atop a bluff are the town’s most prominent geographic feature and a local landmark.

The owners--the wealthy Chandler and Sherman families--don’t seem in a hurry to sell. But a source familiar with the families’ business affairs said Thursday that the property is for sale again and an arm of the New York financial services firm of Morgan Stanley Group Inc. has been hired to market it.

“We get a lot of interest in it,” the source said. “But until somebody actually signs a check, it just means they like the view.”

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The families’ representatives wouldn’t comment.

The price is likely to be more than the $120 million that Qintex agreed to pay for the property, real estate brokers said. But this time, the land may be harder to sell.

The reason: Whoever buys it must still get permission from the city to build. While Dana Point has zoned the land for a resort hotel, sentiment to keep the wind-swept bluffs vacant is said by local officials to be growing. And Dana Point will soon reconsider the zoning of the entire city in a series of public hearings.

“There are some individuals here who’d like to see the land become a park,” said Eileen Krause, a City Councilwoman and former mayor.

That could scare off some buyers who don’t relish the possibility of a protracted public fight over building permits for a beloved local landmark.

But turning the property into a park isn’t likely to happen, Krause and other city officials conceded.

The city would probably have to buy the Headlands to make it into a park. But Dana Point takes in only $11 million a year in tax revenue and is unlikely to be able to afford a big chunk of prime beachfront.

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A number of investors who could afford it, however--including Japanese investors, who like to buy resorts--are said to be interested in buying, real estate brokers said.

Qintex must sell the Monarch Beach property for more than $250 million to recoup the $242 million it borrowed to buy the land and the interest it has paid on the loan since, people familiar with the transaction said. The receiver would not disclose the asking price.

Unlike the Headlands, though, the Monarch Beach property is already approved by the city as a hotel site, which may make it easier to sell. A 1,100-room copy of San Simeon’s Hearst Castle has been approved.

This property also has a golf course; the Headlands isn’t big enough for one. That may make the Headlands more difficult to sell, prompting some brokers to believe that the owners are trying to find a way to sell the two parcels to the same buyer again.

Since the Monarch Beach property apparently hasn’t been marketed widely either, local real estate brokers speculate that the two Japanese companies are negotiating to buy it, since they already have an option to buy half the resort.

Nippon Shinpan is a credit card company and Japan’s largest consumer finance concern. Mitsui is the world’s largest trading company and Japan’s largest developer.

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The two already own half of Qintex’s three resorts, which they bought when Qintex was in the midst of an earlier cash crunch and needed money.

Asked if the two companies would buy the property, Allpass, the receiver, said: “I’m not saying it will be. It’s a possibility.”

The two companies’ local offices referred questions to Japan, where executives couldn’t be reached.

The other resorts--as well as Qintex’s Australian television network--are profitable but they’re for sale because Qintex affiliate companies that control them are in receivership. The proceeds will be used to repay more than $1 billion in debt.

Mitsui recently bought half of Laguna Niguel’s Birtcher, one of the nation’s largest developers, although Birtcher has little experience in resort development. In the event that it buys Monarch Beach, Mitsui could attempt to develop the resort itself or bring in a resort developer as partner.

PRIME COASTAL LAND FOR SALE Two of the last remaining undeveloped seaside parcels near Los Angeles are both up for sale. One, the 232-acre Monarch Beach property in Dana Point, is being sold by debt-ridden Quintex of Australia. The other, the 115-acre Headlands, was nearly bought by Quintex late last year, but the company allowed a purchase option to lapse. it is still for sale.

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