Kiley Ranch Communities files reorganization petition

Kiley Ranch Communities, one of the region's highest profile residential and commercial developments, has filed for Chapter 11 bankruptcy reorganization.

Kiley Ranch Communities was planned as a live-work-play environment in Spanish Springs, with residential communities that also included the Caviata and Waterstone condominium communities which have since been recast as apartment communities after sales proved to be slow.

The Kiley plan was to bring in stores, offices and other businesses that would employ residents of the 800-acre Kiley Ranch and allow them to work and shop close to home.

But the erosion of the housing market and commercial development severely impacted Kiley Ranch Communities' ability to repay loans it took out in 2007 and 2008. The company borrowed a total of $45 million in four different notes from the since-failed Colonial Bank. The notes now are held by North Carolina's Branch Banking and Trust Co., which assumed Colonial's assets.

Matt Kiley, president of Kiley Ranch Communities, declined comment about the company's reorganization.

In its filing in U.S. Bankruptcy Court in Reno late last month, Kiley Ranch Communities listed assets of $10 million to $50 million, and liabilities of $50 million to $100 million. Its largest unsecured creditors are CAV Investments of Reno, owed $11.68 million, and Kiley Community Property Trust, owed $2.37 million.

Kiley Ranch Communities will be represented in bankruptcy court by Stephen R. Harris. Judge Gregg Zive will oversee the proceedings.

Some parcels of Kiley land were scheduled to go to foreclosure auction on the courthouse steps on Aug. 24, but the auction was postponed until Dec. 28.

Scott Barnes, a land specialist with Colliers International, has been following the developments at Kiley Ranch and says buyer interest could be high on the land, which includes a mix of retail and office sites, residential lots, and open space.

"Buyers are expecting to get 30 or 40 cents on dollar, and this land is pretty desirable," Barnes says. "It is good land, and a lot of it has been graded."

Barnes says current economics high retail and office vacancies and soft home sales mean that any buyer most likely would have to hold the land for several years before developing it, which may limit bidding to a few cash-heavy individuals or entities.

"I think anybody that would buy it would be assuming a three- to five-year hold on the land," he says. "But there are some people with cash that are making great deals right now."