A 68-acre business park along Highway 227 near San Luis Obispo County Regional Airport — under development since 1999 but with only one building completed — is on the verge of foreclosure.
Pacific Capital Bank, parent company of San Luis Obispo’s First Bank, says East Airport Development LLC owes the lender almost $11 million that it borrowed as a construction loan, according to court filings.
The property is scheduled for public auction Feb. 11 outside the entrance to the San Luis Obispo County Courthouse at 976 Osos St. in San Luis Obispo.
East Airport Development’s partners are two brothers, Jim and Angelo Morabito — who also own Paul’s Dry Cleaners of San Luis Obispo — developer John Kuden, building contractor Rob Burke and attorney Neil Tardiff.
Although the property was successfully subdivided into 26 lots and has completed its infrastructure of roads, curbs and gutters, only one building stands on the 68 acres.
Donnie Walter, of Walter Brothers, owns that parcel and built the offices for the state’s Department of Industrial Relations offices. It is not part of the property now being foreclosed on.
The rest of the business park property — also known as Tract 2368, and valued at one time at more than $22 million — was pledged to the bank as collateral for the nearly $10.9 million now owed.
The partners also personally guaranteed the loans, according to Pacific Capital Bank, which filed a complaint against the partners for breach of guaranty. Burke owes an estimated $3.2 million; Tardiff $1.1 million; Kuden $1.061 million; and the Morabitos, almost $2.5 million each, according to the bank’s lawsuit.
The original loan was due January 2008, but was refinanced to extend the loan to July 9, 2009, the filings state.
Burke asked the court for a preliminary injunction to stop the foreclosure. But San Luis Obispo Superior Court Judge Barry LaBarbera denied the motion Jan. 12, saying “real estate development is inherently speculative,” according to LaBarbera’s written denial.
The Morabitos also filed a lawsuit in 2008 against Kuden and Tardiff, which included allegations of breach of agreement and intentional and negligent misrepresentation.
Part of the issue, they allege, is that Kuden and Tardiff failed to complete the project in a reasonably timely manner, according to their lawsuit.
“All the things the county imposed on us slowed us down, but so many things went wrong,” Angelo Morabito said. “What toppled it over finally was our economy — and all the banks going out. Even if we could find a buyer — and we’ve had offers — the buyer can’t find money.”
Kuden referred questions to Tardiff, who along with Burke, could not be reached for comment.
— Melanie Cleveland
French Hospital garners care awards
French Hospital Medical Center in San Luis Obispo was recently honored for its cardiac and orthopedic care with awards from two organizations. For the second year, Thomson Reuters recognized French as one of the top 100 hospitals in the United States for cardiovascular care out of 970 hospitals analyzed.
The award criteria were based on clinical outcomes for patients diagnosed with heart failure and heart attacks and for those who received coronary bypass surgery and angioplasties with data from 2006 and 2007.
Additionally, HealthGrades, an independent healthcare ratings organization, recently gave French a five-star rating for patient quality outcomes in heart-attack treatment for the second straight year.
That ranks the hospital among the top 15 percent in the nation for heart attack treatments, according to French.
The hospital also received a HealthGrades Joint Replacement Excellence Award and a five-star rating for total hip replacement and joint replacement for the eighth straight year.
Hospitals receiving a five-star rating have mortality or complication rates that are below the national average. The HealthGrades study analyzed patient outcomes in Medicare hospitalization records from 5,000 hospitals during 2006, 2007 and 2008.
— Julia Hickey