(November 16)   By Gail Fry
Two failed developments located in the San Bernardino Mountains are costing the taxpayers of San Bernardino County about a million dollars.
At its October 23 meeting, the San Bernardino County Board of Supervisors approved a recommendation by the county’s public works director, Gerry Newcombe, to “initiate performance & maintenance securities foreclosure” on a project in Lake Arrowhead known as Mill Pond.
The Mill Pond Project originally approved by the board of supervisors on November 3, 1998 included 67 parcels that were to be developed into custom homes.  In the conditions for approval, the developer agreed to indemnify the county taxpayers against any legal fees or court costs incurred if any action were taken against the county in approving the project.
To date, sixteen lawsuits have been filed as a result of the Mill Pond Project.  Notably, none of the lawsuits involved the county of San Bernardino as a party.  The majority of the lawsuits involved payment of its subcontractors.  One lawsuit was brought for quiet title purposes, that is, to end dispute over ownership of the land and development, while another was brought with regard to the removal of trees from the property.
The Arrowhead Lake Association brought a lawsuit with regard to the erosion and silt that ended up in Lake Arrowhead due to the development.
The state of California, under the authority of the Lahontan Regional Water Quality Control Board,  filed for an injunction against Mill Pond Partners on December 18, 2008, in order to force the developer to comply with its cleanup and abatement order issued December 31, 2007.  The cleanup and abatement order issued by Lahontan Regional Water Quality Control Board (Lahontan) pertained to storm water erosion originating from the site entering Orchard and Cumberland Creeks and entering into Lake Arrowhead.
On January 8, 2010, the case filed against Mill Pond Partners by the state of California was dismissed when a stipulated judgment was reached with the developer.
Lahontan supervising water resources control engineer Chuck Curtis told the Sentinel that Lahontan “has never been paid for enforcement” of its cleanup and abatement order and a demand letter was sent out to the developer.  Curtis explained his agency is currently “evaluating options” while acknowledging that the developer hasn’t “done all the work to stabilize the site.”
Curtis said the next step is to collect on its judgment and require stabilization of the site.  Curtis explained that it will depend on the current owner, and Lahontan plans to impose its requirements on the new owner.
According to property ownership records from the San Bernardino County Recorder’s Office, on February 7, 2012, the lender PME Mortgage Fund, Inc. foreclosed on the property, becoming the current owner of the Mill Pond Project.
The action authorized by the San Bernardino County supervisors at their October 23, 2012 meeting, allows county counsel to initiate foreclosure proceedings against the developer and/or surety “to collect sufficient monies (total estimated construction costs:  road and drainage – $125,245, water – $17,540 and sewer – $12,500) to complete the required improvements for Tract 15740.”
San Bernardino County public works staff analyst/public information officer Roni Eddis told the Sentinel this will allow the county to collect sufficient money from the developer, its bondholder or the present owner in order to “finish up what needs to be done to make the development safe.”
Eddis explained, “Now it’s just a legal issue between county counsel and them,” referring to the developer, its bond holder or the present owner.  Eddis informed the Sentinel that the county has been unable “to get a hold of them” and “We haven’t heard from them.”
The report/recommendation submitted to the board of supervisors shows the project’s required road and drainage improvements have not been completed and the developer is in default under the terms of its agreement with the county.  The report/recommendation also indicates that the bondholder, Western Insurance Company, has filed for insolvency and is being liquidated, and further provides “the county has not “received any funds from Western.”
Western Insurance Company’s insolvency and liquidation appears to leave the county of San Bernardino holding the bag for the cost of completing the project’s improvements, which total $155,285.
Peter Jorris, representative for San Bernardino Valley Audubon Society,  told the Sentinel that his group did not get involved in the Mill Pond Development Project because the project was surrounded by development, but that he perceived problems that cropped up at the development to be exemplary of the county not monitoring projects or enforcing its own general plan or laws.
Another development project located in the San Bernardino Mountains known as the Hawarden Project, again in the community of Lake Arrowhead, has resulted in the county of San Bernardino paying legal fees in the amount of $757,451.
The Hawarden Development Project was approved by the San Bernardino County Planning Commission on August 18, 2005 and consisted of 63 lots that were to be developed into 57 custom homes.
The developer, Blue Ridge Development, Inc., agreed to indemnify the county taxpayers against any legal fees or court costs incurred if any action were taken against the county in approving the project.
On December 15, 2005, the Center for Biological Diversity, San Bernardino Valley Audubon Society, Save Our Forest Association and the Sierra Club filed a writ of mandate against San Bernardino County and Hawarden Development Company for violations of the California Environmental Quality Act.
On November 30, 2006, Judge John Wade declined to grant a writ on the issue of water supply as well as on the issue of waste water, denied the writ with regard to the developer’s mitigation with regard to the Southern Rubber Boa and other environmental impacts while granting the writ with regard to its fire safety plan.
The major issue with regard to the fire safety plan involved the lack of evacuation routes without the completion of Cumberland Road from Cedar Glen to State Highway 18.
On January 31, 2007, the Center for Biological Diversity, San Bernardino Valley Audubon Society, Save Our Forest Association and the Sierra Club filed a notice of appeal to the Fourth District Appellate Court.
On October 27, 2008, the Fourth District Appellate Court upheld Judge Wade’s decision with regard to its fire safety plan while ruling against Judge Wade’s decision with regard to the issue of water supply, California Environmental Quality Act issues and the Southern Rubber Boa.
Specifically, with regard to the fire safety plan the appellate court found, “By approving the Blue Ridge Project tentative tract map and conditional use permit without requiring completion of Cumberland Road, [the] county violated the express requirements of its general plan.”
With regard to the issue of water supply, the court found the environmental impact report “does not comport with the requirements of the California Environmental Quality Act because the document does not identify a source of water for the project or discuss the environmental impact of obtaining water from each of the various sources.”
With regard to the Southern Rubber Boa, the appellate court found, “the environmental impact report  conclusions regarding the SRB (Southern Rubber Boa) habitat located on the project site are not supported by substantial evidence and therefore the environmental impact report fails to set out adequate mitigation measures, in violation of the California Environmental Quality Act.”
A press release dated September 20, 2010, issued by the Center for Biological Diversity, San Bernardino Valley Audubon Society, Save Our Forest Association and the Sierra Club clarified that a 2009 ruling by San Bernardino Superior Court Judge Donald Alvarez had “arbitrarily minimized the fee award” and that an appeal to the state appeals court directed that “attorney fees awarded to the four plaintiff organizations be supplemented to provide a higher award.”
On September 14, 2011, the San Bernardino Superior Court held a hearing with regard a motion brought by the Center for Biological Diversity, San Bernardino Valley Audubon Society, Save Our Forest Association and the Sierra Club to the awarding of attorney fees.
On September 26, 2011, San Bernardino Superior Court Judge Gafkowski found the Center for Biological Diversity, San Bernardino Valley Audubon Society, Save Our Forest Association and the Sierra Club were entitled to an award of attorneys’ fees in the amount of $757,451.
By the time the court made its award for attorneys fees, Hawarden Development Company had gone out of business and was unavailable to pay the attorneys fees as it had promised in its indemnity agreement with the county.
Peter Jorris, speaking on behalf of the San Bernardino Valley Audubon Society, told the Sentinel that in cases where citizens uphold the California Environmental quality Act and serve in the capacity of a private attorney general that the parties were entitled to their legal fees.
Jorris said if the judge decides “the government overstepped its bounds egregiously then you can have a multiplier applied to the legal fees,” as in this case.  Jorris suggested the award was a “lesson to the county to listen to its citizens when they make reasonable arguments” and  that “it was a resounding victory after six years.”
According to records from the San Bernardino County Recorder’s Office, Provident Savings Bank foreclosed on the property slated for the Hawarden Project on March 7, 2012.