LOS ANGELES — A San Diego company that focuses on distressed land-secured municipal bond deals has acquired 661 residential lots in the stalled Rolling Hills master-planned community in Clay County, Florida.

The acquisition represents the first Florida purchase for Common Bond, a company founded by veteran public finance banker William Huck and real estate developer and attorney Todd Anson in January 2012 to target distressed dirt bonds. The company’s first acquisition in May 2012 was a $5.5 million bond issue sold in 2006 for a project in Merced, Calif.

Of the $30 billion in outstanding land-secured bonds, an estimated $3.5 million to $4 billion are in default, said Huck, and nearly 80% of the defaulted bonds are in Florida.

The company has been scouting for distressed deals in Florida, California and Virginia; the first two states have the highest number of defaults in the sector, he said.

“While the conventional private equity approach is to attempt to buy distressed bonds at deep discounts from desperate owners facing cash or regulatory pressures to sell, Common Bond proposes a strategy that aligns the interests of key parties,” Huck said.

Private equity investors typically want high-risk projects with 12-15% percent returns and a shorter time-frame for investment, Huck said. Their approach doesn’t work well for bonds that have a longer time frame and 5% yields, he said.

That’s where Common Bond’s expertise comes in, Huck said.

“Most land-secured bonds are owned by sophisticated institutional investors with just as much cash, and more municipal bond sector experience, than the private equity opportunists who sometimes low-ball bids on distressed bonds,” Huck said. “The Common Bond approach typically has significantly greater appeal to both existing bondholders and the communities involved.”

Their aim is to restore the bonds to 100%.

Huck successfully managed workouts and restructurings of two dozen California bond defaults during a 30-year career at San Francisco-based Stone & Youngberg. Anson is best-known as the developer of the iconic DiamondView Tower office building in San Diego that achieved the highest price per square foot in that market when it sold for $160 million.

Bonds supported by special district taxes often go into default when the developments aren’t completed or the developer ends up in financial distress. Huck and Anson believe they know how to get the issuances “unstuck.” Their firm provides capital and financial and real-estate development expertise to resolve default problems.

The firm also just added two new managing directors: Ellen Jamason, a real estate and finance attorney, and David Guy, a real estate developer.

Guy will manage the Rolling Hills project, about 30 miles from Jacksonville.

Common Bond purchased a portion of the $12.5 million defaulted municipal community development bonds that encumber the Florida development; the remainder are held by an unnamed institutional investor.

Land-secured bonds are issued to fund infrastructure projects including roads and sewer lines that support housing projects. Bond payments are paid with a portion of the taxes developers, and later home buyers, make on the property.

The original plans for the subdivision called for 761 homes, of which 71 have been completed. Of the 661 purchased by Common Bond, 222 are finished residential lots and 439 are entitled, but unimproved lots.

The first step will be to pay a portion of the $3 million in delinquent taxes that have piled up over the past two or three years, said Huck, Common Bond’s managing director and chief executive officer.

Common Bond expects it to take three to seven years to make the improvements necessary to sell the lots off in blocks to single-family home developers. During that time, it will invest in maintenance projects, some as simple as cutting grass, and hiring life guards to extend the hours of the pool.

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