SPRINGFIELD -- A steep tract of residential land that a half-dozen years ago was the site of a major road failure and landslide has changed hands after the owner was unable to make debt payments.

Alberts Development LLC, headed by Eugene businessman Todd Alberts, forfeited the property in a foreclosure procedure in January to creditor Eugene Gramzow, who said Alberts owed him $6.1 million on the site.

The property consists of nearly 70 undeveloped residential lots along Forest Ridge Drive on the eastern side of Potato Hill, a prominent rise at the southeast edge of Springfield.

The lots, totaling about 30 acres, are part of the sprawling MountainGate development where a number of developers and builders have been at work in recent years.

It was not immediately clear what Gramzow will do with the acreage. He did not respond to a request for comment from The Register-Guard through his attorney.

Alberts' debt to Gramzow dates to the Lane County economic and construction boom a decade ago. In 2002, Alberts took out a mortgage totaling $3.5 million from Gramzow, with the property pledged as collateral, according to debt records.

Alberts installed roads and other infrastructure and carved out lots, but in the process ran into a major headache: In December 2006, rocks and soil underneath part of the newly built Forest Ridge Drive began sliding down the hillside toward a neighborhood off South 67th Street. Additional road fill dislodged in January 2007.

An engineering firm hired by the city determined in February 2007 that a section of the road needed to be rebuilt because it endangered nearby residents. The findings prompted city officials to ask four families to evacuate their homes until the hillside could be stabilized.

The road fill was fortified that spring, and construction resumed.

The parties, including Alberts, the city, a local rock quarry, an engineering firm and an insurance company ended up in lengthy legal disputes over who was responsible for what portion of the costs. In one court filing, Alberts said the landslide fiasco would cost him $1.79 million to resolve.

After rebuilding the road, Alberts was able to sell some individual lots.

But as the recession set in, homebuiding in Lane County ground to a halt, and Alberts and many other developers of single-family-home subdivisions saw business dry up.

In his notice of default, Gramzow said Alberts owed $1.3 million in principal, $1 million in advances, $3.5 million in accrued interest, and $200,000 in loan fees, plus interest on the principal accruing at 20 percent a year from Aug. 1, 2013, plus foreclosure costs and attorney fees.

Alberts declined to comment.

The MountainGate property is the third Lane County property Alberts has lost in recent months after being declared in default on his debts.

Last September, Eugene businessman Jack Louie declared Alberts in default on principal, interest and other costs, totaling nearly $740,000, and took back from Alberts Development a vacant three-acre commercial parcel in the Creswell Marketplace development on the east side of Interstate 5 in Creswell that Alberts had pledged as collateral, according to filings with Lane County Deeds and Records.

Also last September, a Lorane couple reclaimed four undeveloped acres in Dexter from Alberts Development after Alberts defaulted on $100,000 in principal, interest and other costs, according to filings with the county. Alberts had pledged the land as collateral.

Follow Christian on Twitter @ChristianWihtol. Email christian.wihtol@registerguard.com.

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