onstruction has stopped and owners of the half-finished race track west of Bakersfield have defaulted on their loan, placing the future of the track in jeopardy.
Track owner Alan Destefani planned on financing track construction from the sale of some 36-hundred acres of farmland to developers.
But the deal with Los Angeles investors fell out of escrow in the summer of 2007, partly because of the housing slump.
Destefani later secured new financing, and construction resumed, but now Destefani farms has defaulted on the 4.5 million dollar construction loan.
"The default was caused by us exhausting all the cash resources that we had available to us. The stock market, the housing market, it's all kind of a perfect storm. Stopping making those interest payments caused the default," said Chief Financial Officer for Destefani Farms Tim Elrod.
The default could lead to foreclosure, but Elrod says the Destefani family is pulling out all the stops to find additional financing to not only finish the track but to pay subcontractors some two-million dollars they're owed.
Source
A secured loan is a loan in which the borrower pledges some asset (e.g. a car or property) as collateral for the loan, which then becomes a secured debt owed to the creditor who gives the loan. A mortgage loan is a secured loan in which the collateral is property, such as a home.
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