SSU foundation to take land from Carinalli

<p>The Sonoma State University Academic Foundation is taking possession of 9.6 acres of vacant land north of Windsor that Clem Carinalli mortgaged in return for a $1.25 million loan, according to the organization.</p><p>Carinalli informed the university foundation and some of his other creditors in May that he could not continue making loan payments.</p><p>Carinalli, who was the county’s largest individual land owner in 2008, continues to deal with his extensive financial troubles resulting from the dramatic collapse of the real estate market.</p><p>He has voluntarily returned land to some creditors to avoid the foreclosure process. He has asked other creditors for permission to delay paying them for three to four years until he can sell off some of his land holdings and avoid bankruptcy.</p><p>Carinalli did not return a telephone call seeking comment Monday.</p><p>Carinalli, a former SSU foundation board member, received at least six loans valued at more than $8.5 million from the foundation beginning in 1995. The loans were funded with donations to the foundation, which invests contributions made to the university. The private loans were initially considered alternative investments to government securities, according to the foundation.</p><p>Two of Carinalli’s loans from the foundation were still outstanding in June when he asked it to accept the vacant land in lieu of repayment on the $1.25 million loan.</p><p>The undeveloped parcel is located just outside Windsor town limits off a Highway 101 frontage road, Los Amigos Road. It is zoned for rural residential development.</p><p>At current land values, the foundation cannot immediately recoup its losses on the loan by selling the parcel, the foundation’s attorney advised in a June 25 memo to board members.</p><p>Carinalli recently repaid the second outstanding foundation loan of $232,500, according to a statement released Friday by the foundation.</p><p>University and foundation officials declined requests for interviews Monday, leaving unclear how its endowment fund and scholarships will be impacted, what it will do with the land, and if they consider Carinalli’s $1.25 million loan fully paid off.</p><p>SSU President Ruben Armiñana, who is chairman of the foundation, has declined repeated requests for comment regarding the Carinalli loans.</p><p>About 25 percent of the funding for Carinalli’s $1.25 million loan came from the foundation’s endowment fund, which is used to support scholarships and campus activities. The rest of the loan funding came from donations that would likely have been included in the endowment fund at some point in the future.</p><p>Scholarships will not be impacted for the upcoming academic year, because that money was already set aside last year, the foundation’s president Patricia McNeil previously told The Press Democrat.</p><p>A June meeting to decide how to allocate scholarship money for the following 2010-2011 academic year was postponed, she said in an interview earlier this month.</p>