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Old Posted Jan 11, 2008, 11:11 PM
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Foreclosure lawsuit throws new twist into Panhandle saga
Sacramento Business Journal

Friday, January 11, 2008

As if annexation of undeveloped Natomas land known as "The Panhandle" hasn't been contentious enough, now one of the applicants is being sued by a bank that loaned money to buy part of the land.

Comerica Bank wants to foreclose on part of The Panhandle belonging to Dunmore Land Co., alleging in a lawsuit filed late last month that the developer has missed payments on a $4.7 million loan.

The company is owned by former Dunmore Homes president Sidney B. Dunmore. He kept it when he sold Dunmore Homes last year for $500 to an investor, who put the new firm into bankruptcy to reorganize.

Dunmore Land is one of the applicants seeking annexation of The Panhandle into Sacramento; the other is Vaquero Land Holdings LLC, which is not involved in the Comerica lawsuit. The owners want to build more than 3,000 homes on 595 undeveloped acres there.

A decision on the possible annexation has been delayed several times by the Sacramento City Council, but the lawsuit isn't the reason, said the city's new-growth manager, Scot Mende. The city is more concerned with getting the correct land uses than with who ultimately owns it. If the bank forecloses, any subsequent user would likely stick to what's approved under development agreements.

So what's been holding it up? The city and Sacramento County are still working out the complicated tax-sharing agreement that's part of any annexation.

There also was a change late last year to the area in question. The city won't annex the southern portion closest to the "pan" -- a developed industrial area with a lower utility tax rate. If the northern "handle" is annexed, it would leave an 840-acre island of county land surrounded by the city. The city is expected to take up the issue again Jan. 29.
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