An aging, two-bedroom ranch house at the west edge of Santa Rosa, seized in foreclosure proceedings from bankrupt financier Clem Carinalli, will soon become a housing complex for people who have lost their homes.
The house, which sits on two acres and is valued at $290,000, was donated by Luther Burbank Savings to Community Housing Sonoma County, a nonprofit that has helped create 179 units of low-income housing since 2003.
The donation of the foreclosure property is unprecedented in Sonoma County and possibly nationwide, housing advocates and bankers involved in the deal said.
"For us, it's a godsend," said Georgia Berland, executive director of the Sonoma County Task Force for the Homeless, who brokered the deal between the bank and the community housing organization.
Berland, who founded the housing task force 30 years ago, said San Francisco Federal Reserve Bank officials have never heard of a financial institution donating a foreclosure property to an agency that serves the homeless.
"I'm very proud that we could do it," said John Biggs, president and CEO of Luther Burbank Savings. "I think it meets a real need in the community."
He called it one of the few good outcomes to emerge from the 2009 implosion of Carinalli's financial empire, which triggered the largest personal bankruptcy in Sonoma County history and "hurt a lot of people," Biggs said.
Carinalli's assets, including 248 North Bay real estate properties, lost more than half of their $466 million value in the housing market collapse of 2008, according to bankruptcy documents.
Luther Burbank Savings, which had loaned Carinalli $19.5 million, foreclosed on 19 of his properties and sold all but one — the Guerneville Road parcel. Biggs said he had hoped, as part of the liquidation, to "do something special" with one property.
The 1,748-square-foot house, built in 1941, needs substantial renovation, including a foundation and connection to city utilities, said Paula Cook, executive director of Community Housing Sonoma County.