Business

Wednesday, Sep. 03, 2008

Biz Buzz: Rabobank sues Atascadero developer Kelly Gearhart over $5.8 million in loans

Lawsuit seeks to foreclose on property in Atascadero and to collect more than $5.8 million from builder Kelly Gearhart

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Rabobank is suing Atascadero developer Kelly Gearhart and his wife, Tamara, for repayment of more than $5.8 million in loans and two unsecured lines of credit that the Gearharts borrowed from the bank in 2007 and 2008. The bank is also seeking to put a Gearhart limited-liability corporation, Graves Creek Estates, under a court-appointed receivership.

The lawsuit, filed on Aug. 21, states that Gearhart was given a $6 million loan secured by real property located at 501-630 N. Ferrocarril Road in Atascadero. The property is part of a senior community subdivision developed by Gearhart. The Gearharts are listed as the owners of record on the property, with the exception of Unit 11, which is owned by Graves Creek Estates, the lawsuit states.

The principal balances were due in January and April, according to documents filed with San Luis Obispo Superior Court. But those balances remain unpaid, Rabobank alleges.

The suit seeks to foreclose on the property and asks for a court-appointed receiver able to manage the property and collect whatever rents are available from tenants residing on the property.

Rabobank, which merged with Mid-State Bank & Trust last year, is not the only entity seeking to put a Gearhart project into receivership. Hurst Financial Corp. investors Murray Powell of Templeton and David Rios of Santa Clara County recently filed a motion with Superior Court asking that another Gearhart entity, Morro Road Homes LLC, be put into receivership.

Their purpose is to take control over Gearhart’s books to help determine what happened to $2 million loaned to Gearhart for construction of a commercial building. Hurst had contracted on behalf of its investors with Gearhart for the loan amount plus interest to be paid back in April, but no building has been constructed and the money remains unpaid, Powell said.

Powell and Rios have sued both Gearhart and Hurst Financial, alleging fraud, mismanagement and breach of contract. The property has since been placed in default, along with millions of dollars worth of Hurst-financed properties under Gearhart’s control.

According to Gearhart’s attorney, Ty Green, the builder cannot be reached for comment.

—-Melanie Cleveland

New owner takes over Wild Birds shop in SLO

A Paso Robles couple has purchased the Wild Birds Unlimited franchise in San Luis Obispo for an undisclosed sum.

Ted and Bonnie Pope, who owned the Wild Birds shop in Marigold Plaza for the past 11 years, said they recently closed a purchase deal with Gene and Terry Fahey. Wild Birds is a retailer that sells feeds, bird houses and accessories for people interested in backyard birding.

Bonnie Pope said she and her husband will have more time for birding, fishing and family. The Popes will remain in the area.

—Tribune staff report