News - Local

Tuesday, Jun. 30, 2009

Problems piling up for North County businessman David Weyrich

He's facing lawsuits, has lost his jets and is selling his 280-acre estate in Paso Robles

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Financial and legal troubles are mounting for prominent North County businessman David Weyrich, who is facing more lawsuits, has lost the jets central to one of his enterprises and has put his multimillion-dollar estate up for sale.

Weyrich — with holdings in wineries, hotels and thousands of acres of North County real estate — is being pursued by creditors seeking millions of dollars. He is also accused of fraud in connection with a land deal at his high-end residential subdivision in Templeton, according to court documents and other filings on public record.

Since Weyrich, his main partner and others sold their national billboard business for a reported $610 million in 1998, Weyrich has invested much of his share in real estate and tourism-related businesses.

“In the stock market, you have no control over where (the money) is going,” he told The Tribune in 2002. “I invested it in real estate or things I’m working on that I have control over. There you weigh the risk and you're driving the car.”

For a time, Weyrich founded and owned the local chain of Gazette community newspapers, which he later sold.

His current holdings include about 500 acres of Santa Ysabel Ranch in Templeton, an estimated 1,500 acres in the Nacimiento Lake area, the Carlton Hotel in Atascadero, the Villa Toscana resort near Paso Robles, the Paso Robles Jet Center at the Paso Robles Municipal Airport, and York Mountain and Martin and Weyrich wineries. Weyrich lives at a 280-acre private estate in Paso Robles, now for sale for $9.5 million. The property includes a 7,500-square-foot main house, a guest house, garages that can accommodate up to 10 cars, a pool, tennis courts and about 95 acres of planted vineyards, according to a listing on a local real estate sales Web site.

Fighting allegations

Weyrich did not respond to several requests for an interview with The Tribune. His attorney declined to speak to The Tribune without Weyrich’s permission. And the law firm did not respond to e-mailed questions with a request to reach him personally for answers. Weyrich did not respond to calls to his offices in Villa Toscana nor to an interview request left with the jet center headquarters at the Paso Robles airport, although the general manager agreed to pass along the message.

However, according to recent filings, Weyrich appears to be fighting all the lawsuits in court, and is denying all charges of fraud.

This spring, Minneapolis-based Wells Fargo Equipment Finance and Superior, Colo.- based Key Equipment Finance seized four of Weyrich’s jets that were part of his now-collapsed North American Jet Charter business and collateral for loans from those firms, according to court records.

Weyrich and his wife, Mary, were sued for more than $22 million by both creditors in July 2008. Although the lenders have taken and disposed of the collateral, they continue their lawsuit against the couple because the jets were not worth what Weyrich had pledged, according to the lawsuits.

The Federal Aviation Administration issued a notice of revocation of Weyrich’s FAA certificate this month, according to Ian McGregor, spokesman for the agency.

The city of Paso Robles has also notified Weyrich that his leases for buildings at Paso Robles Municipal Airport will be terminated because he is no longer in compliance with lease requirements, including that he conduct an air-charter business at the airport, according to Assistant City Manager Meg Williamson. The notification of termination letters were filed in May, she added. Weyrich and the city are discussing what steps they will take next, Williamson said.

Weyrich used the buildings for his headquarters of Weyrich Development, the North American Jet Charter company and the Paso Robles Jet Center, the fuel service operator for the airport.

The businessman also owes $464,000 in back taxes to the state and $142,530 to American Express, and he was issued a notice of default in May on a $1.6 million debt to Heritage Oaks Bank, according to county recorder filings.

False promise alleged

In March, Gabriela Koenen filed a lawsuit against Weyrich for allegedly luring her through false advertising to buy a lot for a custom-built, million-dollar home at his Santa Ysabel Ranch in Templeton. She says she was attracted to Weyrich’s claims that he was going to create a world-class equestrian center and a hot springs facility for Santa Ysabel Ranch residents. Koenen also believes those claims helped enhance the value of her property by more than $300,000. But Weyrich then sold hundreds of acres intended for those amenities to Gary and Lynda Totah, causing her property to lose much of its value, she alleges. Weyrich sold the property to the Totahs in October 2008 for $3.9 million, according to documents filed with the county recorder.

Such claims represent only one side of the story. Although Weyrich could not be reached, a broker selling houses and lots in the development, David Crabtree, said he did not believe her claim of false advertising was warranted because she had bought the home from someone other than Weyrich.

“It seems that if there were liability, it would be on the part of the person who sold her that lot,” Crabtree said.

Koenen’s lawsuit also claims Weyrich is delinquent in paying more than $250,000 worth of dues to the Santa Ysabel Homeowners’ Association. (In a separate small claims suit, the Heritage Ranch Homeowners’ Association is suing Weyrich for not paying an estimated $20,000 in its association fees.)

The Department of Real Estate has issued a desist-and-refrain order to Weyrich Development because of its delinquency in paying the homeowners’ association dues, a Department of Real Estate spokesman, Tom Pool, confirmed Tuesday. The company cannot sell or lease any homes until it pays its dues, Pool added. However, he could not confirm how much was owed. The license for the broker on record for Weyrich Development, Wayne Weyrich, expired on May 19.

Payment overdue?

In other lawsuits filed in February and March, San Luis Obispo private lenders Cliff Branch and Jim Smith allege the Weyrichs failed to pay back $1.6 million that was promised them more than six months ago, according to the suit. The Weyrichs pledged three billboards and two properties, including the family’s Cayucos beach home, as collateral, according to court records.

“To date, the Weyrichs have not repaid us one penny,” Branch told The Tribune last week. “At this point, Mr. Weyrich won’t even return my phone call. We will continue to pursue our interests through the courts.”

However, other liens on the properties are impeding settlement outside court, attorneys for the plaintiffs and defendants told Paso Robles Superior Court Judge Roger Picquet at a case-management hearing on Monday. A trial date is set for Oct. 6.