Low prices draw buyers to big Whatcom land parcels

Large tracts of land in the Birch Point area once held by Trillium Corp. are finding new owners after moving through the foreclosure process.

Trillium had envisioned eventual construction of thousands of homes on the parcels before the real estate market collapse. Real estate agent Mike Kent, who was involved in the recent transactions, said the price of large Whatcom County residential parcels has dropped low enough to attract new investors from outside the area.

When the purchase price is low enough, investors can afford to hold onto the property for a few years and wait for market conditions to improve. The recent sales closed at prices between $10,000 and $12,000 an acre, Kent said. That's a fraction of what banks and other investors were willing to lend on the parcels just a few years ago.

"They're buying on value," Kent said.

The most recent sales:

• A 353-acre parcel that had been turned over to Polygon Financial of Bow, after Trillium defaulted on a $16 million loan that was partially secured by the property.

Whatcom County tax records indicate that Ocean View Farms LLC of Delano, Calif., purchased the property from Polygon on Jan. 12, 2012, for $3.7 million. It had been assessed at $11.8 million for tax purposes. In ongoing litigation with Polygon, Trillium founder David Syre's attorney presented the court with a 2009 appraised value of $38 million for the site, which had been planned for eventual development of more than 1,000 homes.

• A 435-acre tract that had been taken over by DaPaul Inc. and Tumwater businessman Dan Sandy, in a foreclosure.

Sandy sold the property to Jun Yu Development of Richmond, B.C., for $4.5 million. The original foreclosure notice listed Trillium's unpaid debt as $11.2 million on the property, including a principal loan of $7.6 million plus interest.

Earlier in 2011, Jun Yu paid $3.2 million to buy the Birch Bay Waterslides from Homestead Northwest, the Lynden real estate development company that filed bankruptcy Jan. 18, 2012. Also in 2011, Jun Yu purchased another 231-acre Birch Point tract for $2.6 million. That property had passed from Trillium to investor Dennis Wise of Fairbanks, Alaska, after Trillium defaulted on a $15 million loan that had been partially secured by the property.

What do the new owners plan to do with these holdings, and when? There are no immediate answers.

Kent said the investors behind Jun Yu are "holding their cards really close" for now, but he predicted that they will share their plans as they develop them.

Ocean View Farms of Delano is a subsidiary of Munger Farms, a producer of blueberries, pistachios and almonds that proclaims a website motto of "Spreading goodness around the world."

Another Munger subsidiary, Sarbanand Farms, paid $13.9 million for about 300 acres of agricultural land near Sumas in July 2011.

Munger spokesman Cliff Woolley said the company may be ready to talk about its plans within a few days.

Real estate agent Kent predicted that the next big sale will be the 200-acre Horizons at Semiahmoo property, formerly developed by Fred Bovenkamp as a site for as many as 650 luxury homes. Frontier Bank of Everett was owed $40.6 million in loans and unpaid interest that financed the roads, sidewalks and utilities that now lie dormant on the site.

Frontier failed in April 2010, and the loan passed to Union Bank, which obtained control of the property via court-ordered receivership in mid-2011.

The bank is attempting to sell the property. Kent said no asking price is listed, but it is likely that the property could be purchased for about $7 million.