reposted from the Santa Barbara Independent:
Osgood Files Suit Against FirstBank, Claims Bad Behavior as It Works to Resell Gaviota Property
Thursday, July 29, 2010
The strange and increasingly epic odyssey that is Matt Osgood’s quest to build Naples took yet another turn as the would-be coastal developer filed a lawsuit this Tuesday against the very bank that helped him purchase the historic eastern Gaviota holding several years ago.
The suit alleges that St. Louis-based FirstBank — which loaned Osgood some $63 million in 2005 to help make his Naples vision a reality and then, after he missed a series of mortgage payments, foreclosed on him earlier this spring — has not only been ignoring a backroom deal that allowed him to retain managing interests and first-refusal buyer rights, but charges that the bank has actively been shopping the property to a series of potential buyers (including a couple past and present Las Vegas hoteliers) without disclosing Osgood’s continued connection to the 1,100-acre ranch.
“I would rather not have this type of attention surrounding me,” explained Osgood in the wake of the filing, “but we had an agreement in writing with the bank that has not been honored and, in a few instances, in a rather flagrant way.”
Within the 86-page filing, Osgood and his attorneys allege FirstBank — specifically its Executive Vice President Alan Rye and a few other employees — has been working behind-the-scenes to not only sell the land to potential groups like the Commonwealth Opportunity Fund and another group headed up by Vegas hotelier Phillip Ruffin, but has also failed to disclose to interested parties that Osgood has both first-refusal rights and a limited buy-back option. The suit also claims that FirstBank, in some instances, explicitly said no such agreement even exists.
Moreover, Osgood’s legal team contends agents of FirstBank (whose representatives did not immediately return calls for comment on this story) have worked to influence a current Naples Ranch employee, Shannon Conn, numerous times in the wake of the foreclosure, promising the single mom financial security if she would help convince part-time Montecito resident Steve Posner to consider buying the property on his own rather than, as it has been rumored, pursuing it in tandem with Osgood.
Widely reported at the time of the foreclosure on May 13, the terms of the actual backroom deal between Osgood and FirstBank are detailed in the lawsuit (as is a copy of a letter signed by Rye and Osgood on May 12) and explain how Osgood, for a period of six months, would retain the rights to manage the property, the rights to access it, the option to purchase it back for $50 million, and a first refusal right should an outside party make an offer to FirstBank. “Basically, they are ignoring those agreements and outright telling other people that those agreements don’t even exist,” summed up Osgood.
The lawsuit further alleges that FirstBank, without Osgood participating, has taken meetings with both Santa Barbara County — which currently has several Naples-flavored lawsuits hanging around its neck as well as a stalled but very real 3-2 vote of approval by the County Board of Supervisors in 2008 for Osgood to put 70-plus luxury homes on the property — and “environmental groups which oppose such development” to discuss a potential willingness “to agree to alternative plans to develop the property that would substantially reduce the value of the property.”
Also revealed in the documents was Osgood’s attempt, with the help of an outside investor, to buy the land back after the May 13 foreclosure for around $38 million, and the fact that FirstBank declined the offer and reportedly refused to make a counter.
Marc Chytilo, Naples Coalition lawyer who represents the grassroots outfit of eco-minded organizations and individuals in strong and longstanding opposition to Osgood’s development dream at the easternmost gates of the Gaviota Coast, would not comment on any possible meetings between FirstBank and Coalition members. He did, however, say he was aware of the lawsuit and was anxious to find out more about it, though, as he put it, “The bottom line is, we don’t care who owns it. We will fight any and all development plans at Naples.”