Partner in Whiteface Project Files for Bankruptcy Protection : Simi Valley: Big Sky Ranch, part of the Sand Canyon development, has defaulted on county property taxes.

One of the biggest players in Simi Valley’s vast Whiteface development plan has filed for bankruptcy protection and defaulted on thousands of dollars in Ventura County property taxes.

The Big Sky Ranch Co. had planned to use 1,000 acres of land in Sand Canyon on Simi Valley’s northern edge for the construction of Wyndmere, a development of 1,100 houses and a golf course for senior citizens.

But after the deal fell through in late 1992, Big Sky started ignoring its county bills on a total of 3,100 acres, including Wyndmere--even though a tax break under a 1965 state farmland conservation measure called the Williamson Act allows the company to pay only pennies on each tax dollar, public records show.

Then in May, Big Sky sought protection from creditors under Chapter 11 of the U.S. Bankruptcy Code because its former partner in the deal filed a claim for $2 million in unpaid pre-development fees, said James Wadsworth, president of Big Sky’s parent company, W & B Builders.

And according to delinquent tax rolls released last week, Big Sky now owes the county $156,088 in property taxes.

But until it emerges from Chapter 11, Wadsworth said, the company has no intention of settling the outstanding bills.

“There’s been a shortage of cash in the partnership to cover the taxes,” Wadsworth said. “There’s been a number of obstacles to developing the land. It’s difficult today with the depressed economy. We’ve just not been able to move forward with the plan at this time.”

W & B has also ignored about $85,916 in back taxes owed on grazing land near the Big Sky property owned under the name of Alamos Canyon Co., because of the cash shortage, he said.

Ventura County Assistant Tax Collector John McKinney called the situation sad.

“It’s unfortunate when you have developers who are getting a tax break through the Williamson Act who aren’t complying,” he said.

Supervisor Vicky L. Howard added: “Most of the money we collect in property taxes goes up to the state--about 80%--and it makes it hard for the state to pay their bills. And then they turn around and take it out on us. So the county really gets nicked in a situation like this.”

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Wyndmere was to have been a big project for W & B Builders, which is partly owned by Watt Industries, a giant Santa Monica home building firm, Wadsworth said.

The Lowe Development Corp. of Brentwood planned to buy the land and develop Wyndmere there, offering detached homes and a golf course to buyers age 55 and older, said Stuart Cramer, Lowe’s vice president.

But while still in escrow in late 1992, Lowe decided--for reasons Cramer would not outline--to back out of the project.

“We looked at everything and chose not to proceed,” he said. The agreement between Lowe and Big Sky gave the latter company a year to pay back about $2 million in pre-development fees that Lowe had fronted for Wyndmere, he said.

When Big Sky failed to pay by last fall, Lowe filed a legal claim and began foreclosure proceedings.

Then Big Sky filed for Chapter 11 protection on May 3--the day before the foreclosure sale was to take place, Cramer said. U.S. Court documents show the company owed creditors $2,315,949 while holding property worth $23,237,083.

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Wadsworth acknowledged the bankruptcy filing was meant to give Big Sky time to pay Lowe back, but he added: “It was a legal maneuver to protect the assets of the overall partnership.”

Some of the land--once used for filming of the “Little House on the Prairie” TV series--still provides modest income to Big Sky from filming fees. And some of the land is used for cattle grazing, but no profit comes from that, Wadsworth said.

Unless Big Sky can sell the Wyndmere parcel or any of the others, the taxes will have to wait, Wadsworth said. But he said Big Sky has no intention of letting the taxes wait another three years, which would trigger foreclosure and sale of the land by the county tax collector’s office.

“We’re in the process of marketing the parcels, and there’s just few buyers out there today,” he said.

Howard said of the situation, “It’s a really difficult time, and I think there are probably a lot of folks right now--large companies and individuals--who are having trouble meeting their bills.”

But she added: “I’m a little surprised at developers when they don’t pay their taxes, because there’s heavy penalties on not paying.”