A foreclosure sale for parts of LochenHeath, including the golf course, is scheduled for Nov. 17, and the LochenHeath Homeowners Association (HOA) is reportedly working to purchase the course.

The development is located on East Grand Traverse Bay just north of Grand Traverse Resort and Spa.

Several lots that have been approved and laid out, large areas of not-yet-developed land, as well as the LochenHeath Golf Club will be up for public auction at the Grand Traverse County Courthouse at 10 a.m.

An Oct. 13 legal notice shows Pinnacle Arizona Development Partners L.P. of Scottsdale, Ariz. defaulted on its mortgage and owes $120,058,400, which includes interest and late fees.

“Last year’s foreclosure was just on the golf course pursuant to some construction liens in favor of Gourdie-Fraser and Molon Excavating. This year’s foreclosure is on more in favor of the lender, R.E. Loans (Wells Fargo),” says Sharon Vreeland, Acme Township Manager.

Gourdie and Molon, both Traverse City firms, won a judgment in 13th Circuit Court against LochenHeath Land Co. and Pinnacle for $112,000 in unpaid fees.

“I believe the homeowners association is currently working toward assuming control,” Vreeland says.

The head of the HOA, Al Ruggirello, couldn’t be reached for comment, and Jim Maitland, who was approved by the HOA board to represent LochenHeath at the township level, had no comment.

Citing problems with its private lender and the economy, Pinnacle suspended operations at LochenHeath in early 2008 and laid off some 30 employees. The infrastructure at LochenHeath remained open for residents. Grand Traverse Resort & Spa then entered into an agreement with Pinnacle to operate the golf course during 2008, but didn’t open it last year.

The LochenHeath development consists of site condos or single-family residences organized under the umbrella of a condominium agreement. Yet, services at LochenHeath are no longer appropriate to an upscale community, the HOA charged in its ’09 lawsuit. The suit said Pinnacle no longer provided on-site security guards at the entrance and stopped maintaining infrastructure and paying for utility services in the common areas.

Property owners also complained that the developer hadn’t given condo owners control of their association, as Michigan law requires. This past August, a Circuit Court agreed, giving the HOA board some of the developers’ previous rights.
The HOA is now trying to obtain a partial performance bond to cover the installation of sewer lines, utilities and roads to lots 105-128.

Sixty of the lots at LochenHeath have been purchased and 10 have completed homes. Approximately 200 sites have been approved for construction, Vreeland says, while the original planned unit development agreement called for 507 housing units.

Pinnacle officials were contacted by The Ticker, but did not respond.