Mini-City Plan Near Palmdale May Be Revived

A land auction expected next month in U.S. Bankruptcy Court may resurrect long-dormant plans to develop Ritter Ranch on the outskirts of Palmdale, where a 20,000-resident mini-city was once planned.

A Texas real estate company, RR Property Holdings LLC, is seeking to buy the remaining 7,400 acres owned by Ritter Ranch Development LLC, whose 1998 bankruptcy filing halted plans to build 7,000 homes in the Leona Valley area.

At least one other unnamed party is also interested in purchasing the land, but under bankruptcy law will be required to top the Texas company’s $6.5-million offer by at least $500,000, officials connected with the sale said.

The Texas firm has indicated it would build on the property, but has not said whether it would proceed with plans approved by Palmdale in the early 1990s for a master-planned community, said attorney Robbin Itkin, the court-appointed trustee for the bankruptcy proceeding.

A representative of RR Property Holdings said he did not know whether the company would follow the existing plan or file a new one. “I’m unaware of anything being ruled out,” said attorney Bill Freeman. “I think the city has to meet again and has to decide how the property will be developed.”

Freeman declined to identify the principals in RR Property Holdings, saying only that they are backed by an institutional investor.

Palmdale Mayor James Ledford welcomed word of the pending sale: “I think it’s good news. The economy is ripe. The critical need for housing is ripe.”

A master-planned housing community identical or similar to the one already approved is the only development that could realistically take place on the vast tract of land, Ledford said.

Ritter Ranch originally covered more than 11,000 acres, but only 7,400 remain. When an early building phase was approved, about 4,200 acres were permanently deeded for parkland, even though construction never took place.

The original 11,000-acre parcel was put on the market for $27 million in 1988, when real estate was booming, and has changed hands several times. The development’s slide into foreclosure and bankruptcy was attributed to the real estate market crash in the early 1990s.

Itkin said the Texas company has put down a large deposit, which it will lose if it fails to go through with the purchase. U.S. Bankruptcy Court Judge Geraldine Mund is expected to set a mid-January auction date during a hearing Friday or early next week.

A spokesman for bankruptcy petitioner Ritter Ranch Development LLC was unavailable for comment.