The real estate development company in charge of Horizon at Semiahmoo and previously under contract to purchase Grandis Pond has filed for bankruptcy.
Harbor Custom Development (HCD) filed for Chapter 11 bankruptcy on December 11 in the U.S. Bankruptcy Court for the Western District of Washington in Tacoma to wind down or restructure business.
“The Chapter 11 cases will provide the company with time and breathing room needed to market and sell its real estate assets and right-size operations for the benefit of the company’s creditors and stakeholders,” wrote Jeff Habersetzer, interim CEO of HCD, in a statement.
HCD is a Tacoma-based real estate company involved in all levels of land development, from land acquisition to residential sales, in Washington, California, Texas and Florida.
In summer 2021, the company purchased Horizon at Semiahmoo after the vacant property lay idle for years. Construction broke ground at Horizon and, as of January 2023, was expected to bring over 540 units, between 140 single-family and 400 multi-family units, to its 149-acre subdivision.
HCD also entered a contract in December 2021 to purchase Grandis Pond for $14 million from Bellingham developer Ken Hertz, who purchased the property in 2005. HCD previously said Grandis Pond was its largest development project.
HCD delayed closing the contract and ultimately pulled out of the agreement about two months ago, Hertz said. Hertz said he sold Grandis Pond to a local company for $10 million on December 14.
Grandis Pond was bought by east Blaine residents Kevin Keck and Rebeka Ruiz-Lembo, according to the statutory warranty deed filed in the Whatcom County Auditor’s Office.
Grandis Pond is slated to eventually bring 872 single-family lots, 120 multi-family units and 10 acres of commercial space to east Blaine, but has been stalled for several decades because of lacking infrastructure. Engineering work is underway on the property, and about 120 of the 387 lots in the project’s first phase are almost fully engineered, Hertz said.
Habersetzer became the company’s interim CEO and president in July following the retirement of founder and former CEO Sterling Griffin. Shelly Crocker is serving as the company’s chief restructuring officer.
According to court records, unaudited financial statements showed the company had about $224 million in assets and $172.5 million in debts as of September 30.
“The city of Blaine was disappointed to learn about the Chapter 11 bankruptcy filing by Harbor Custom Development, but we look forward to working with Harbor and potential future developers on mitigating the impact of the filing on Blaine and surrounding area,” wrote Blaine city manager Mike Harmon in a statement.
Habersetzer did not immediately return a request for comment.
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