The untold El Dorado Ranch Story

UPDATE on the El Dorado Ranch [EDR] development status which I have done a series of LinkedIn articles about.

Bottom line it's stuck 10 years ago when this Baja, Mexico development stopped and work was not completed for basic infrastructure to lots sold at high dollar amounts primarily to U.S. citizens buying at this development. Lots that sold from $40K to $100K or more in U.S. dollars were to be developed "electric lots", not the worthless, undeveloped dirt lots that exist in reality now at EDR. There are also approx. 65 unfinished condos also that are rotting away exposed to the elements.

Although a new EDR investor was announced last year officially [and her name is Stephanie Summers] by the EDR developer Pat Butler and this was documented in a youtube video... nothing but some minimal empty electric boxes cleaning has really happened so far this year. The unfinished EDR condos sit just as they have been for years... unfinished also. This investor deal which never took off is dead from all appearances or was never really a viable deal or actual deal as described by the developer and the "new investor" at this meeting: El Dorado Ranch Developer Meeting 2016

https://www.youtube.com/watch?v=9iaVn1JECrY&t=931s

At this EDR developer meeting back in November of 2016 it sounded as if money from an investor and her funding sources was coming in right away and it was guaranteed to come in. And thus unfortunately, it appears there is NO new investor or investor money as described by the developer and the person who said they were the new investor.

In summary just to be clear, NO investor money ever came in to complete the EDR development. At this point, it has become surreal as this development with the electric infrastructure not completed to approximately 1500 lots or more that were sold as mentioned for top dollar remains in a stalled state of limbo. And this can be documented... nothing happening to deliver the electric infrastructure that was paid for by buyers nor is there any completion of unfinished condos. That's after all the hype that something was going to happen this year.

Litigation against this EDR developer and development & sales team re: the unfinished electric infrastructure has not been successful on either side of the border to the best of my knowledge. But there are still law firms looking into filing claims against EDR.

There is a great series of articles just published about housing fraud in Mexico: Mexico’s Housing Debacle.

https://www.latimes.com/projects/la-me-mexico-housing/

"They sold us only promises", one Mexican for buyers filing complaints buyer says. Another comment: “When I saw the model homes, I said ‘Wow.’ But it was all smoke and mirrors.” And the Mexico developer called Homex has been exposed... "Instead of completing infrastructure, Homex 'just took the money for other things … and left behind problems,'”. [None of the firms involved would comment for this LATimes article.]

                                           Follow up story needed

A follow up article could be a story on the thousands of American and Canadian buyers who have been left with no infrastructure at El Dorado Ranch in San Felipe, Baja California. Many building lot buyers have been waiting ten years for electricity to lots they bought and some built on. Some of the same situations outlined the LA Times articles have been a problem here at El Dorado Ranch in San Felipe, Baja, Mexico. Some people have spent close to a million dollars building their retirement homes here, only to depend on smelly generators and other non optimal solutions to be able to exist. There were thousands of lots sold that didn't get the promised infrastructure, along with a dilapidated sewage treatment plant that was designed for a small RV park and now services way too many residences in another part of El Dorado. Also, there is a ghost town of partially finished condos that have been sitting for nearly ten years and are inhabited sometimes by wild dogs, owls and homeless people. 

The MX judicial system doesn't work for buyers filing civil claims against EDR it appears. But buyers who secured U.S. judgments for unfinished EDR condos in the courts of California have not been collected on either as far as I know.

Thus I believe it's another important story to do. The El Dorado Ranch [EDR] story.

A military contractor subsidiary commercial lender named Textron Financial [TXT] was the primary lender at this EDR development.

Textron Financial sued the EDR developer Pat Butler aka J. Patrick Butler for not repaying guarantied development loans to EDR companies. TXT got the purchase contract receivables from EDR in a cash out program where the developer took in many millions of dollars on this arrangement.

HSBC MX was the trustee bank involved at EDR. HSBC has a deferred prosecution agreement involving many issues [lack of money laundering controls, etc.] with U.S. Dept of Justice. Many observers are aware of HSBC MX problems. There has been HSBC MX trust dept issues also. Stewart Title MX was also involved at EDR and were used as a marketing tool. Concord Servicing out of Arizona also does HOA dues collections for the El Dorado Ranch developer/development which originally had a main office in the U.S. in Colorado as Club Acquisition Company.

                                        Blame the buyer

The "blame the buyer" themes are rampant on social media re: San Felipe and El Dorado Ranch. The idea behind blaming the buyers at EDR is they [the buyers] should have done more due diligence, not spent too much money in Mexico, or just take the losses and chalk it up to a bad experience. Now social media is being used to promote the idea that EDR will be bailed out by an 'investor' who never brings in any money so far.

Personally I think the ties to a military contractor TXT and the big bank HSBC plus credit facility administrator JPMorgan is why this EDR story may be a cover up.

JPMorgan was the administrator for the revolving credit facility of 20 big banks that Textron Financial was the middleman lender for. I think and believe after looking into it that this credit facility was set up so banks and TXT Financial could create derivatives and commercial paper from packaged resort industry receivables. El Dorado Ranch [EDR companies] was a borrower of this TXT resort credit facility.

So there's much to the EDR story and many large entities involved that made money and then apparently lost money when EDR failed to repay their TXT commercial loans. And then the underlying receivables based on dirt lot sales defaulted when buyers walked away from their overpriced lots [which in some cases were not improved with electric infrastucture as sold] and the high interest [13 - 14 %] payments.

This whole EDR sales operation was run out of the U.S. using sales tour buses to bring buyers down from CA, AZ, etc. A California RE sales company named R-MAC licensed in CA handled that EDR sales operation.

El Dorado Ranch I believe is the largest U.S. expat community in Mexico and there's a good story here for the media which is being ignored or covered up.