(August 5) The degree to which agricultural production and in particular the dairy industry in San Bernardino is in decline was given further indication this week when the county board of supervisors declared approximately 74.57 acres of county-owned dairy property in the former Chino Agricultural Preserve surplus and no longer necessary for the uses and purposes of the county.
Since the county appears intent on selling the property to a commercial developer, it is highly unlikely the property will revert to agricultural use for generations, if at all.
According to Terry W. Thompson, the director of the San Bernardino County Real Estate Services Department, “Throughout the 1990s, the county purchased ten dairy properties consisting of approximately 441 acres in the cities of Chino and Ontario for the purpose of preserving agricultural land in the area. The properties are situated within the Chino
Agricultural Preserve that encompasses approximately 14,000 acres. Nine of the dairy properties consisting of 366.55 acres were purchased with state grant funds. This 74.57-acre dairy property (known as the Wiersema Dairy) was purchased by the county with county general funds. After the properties were acquired, they were leased back to the operators of the dairies and the real estate services department has since been actively managing the leases.
Since that time, a number of dairy operations have left the area due to encroaching development and a decline in the dairy and agricultural related industries. The surrounding development and departure of local dairies is changing the needs and plans for this area. The real estate services department began selling the county’s dairy land and recommends that the county hold a public auction to sell the Wiersema Dairy property.”
Thomspson continued, “The real estate services department consulted with Lee and Associates, a local commercial real estate broker, to obtain a detailed analysis of the market in this area. They recommended a listing price of $32,800,000 for this land. The property is not currently entitled; therefore, to maximize the value, the real estate services department recommends an extended escrow period to allow the buyer additional time to secure the entitlements necessary to make the property developable and thereby reducing the buyer’s perceived investment risk. The real estate services division reviewed the information provided by the consultant from an appraisal perspective and concurs that the land value established for the auction is reasonable.”
Thompson said he intends to stipulate conditions for the sale of the land that will include a minimum bid of $32.8 million, the provision of a $3,280,000 deposit, the requirement that the buyer enter into a purchase and sale agreement provided by the county following the auction, a 60-day due diligence period commencing upon the approval and execution of the purchase and sale agreement by both parties, that the $3.28 million deposit be rendered non-refundable upon expiration of the due diligence period, and a maximum of a twelve month escrow/entitlement period from the day escrow is opened.”
Thompson said the county would be amenable a one-time option to extend the escrow an additional six months upon payment of a non-refundable $300,000 that would be applied to the purchase price.
The property, located at 8315 Merrill Avenue, east of the Chino Airport, in the city of Chino, has an existing lease with J&D Star Dairy that will be assumed by the buyer.
The auction is to take place at the County Government Center, located at 385 N. Arrowhead Avenue in San Bernardino on Tuesday, October 14, 2014 at 10:00 a.m. In the meantime, the county will hear responses from other public agencies or authorized non-profit agencies with regard to the proposed sale, as set forth in Section 54222 of the Government Code.
The once-vaunted Chino Agricultural Preserve was formerly the most intensive milk-producing area in the world. Within its 17,000 acre confines were just under 400 dairies and 400,000 cows. With $800 million in annual dairy production in 1976, the relatively compact Chino Valley region alone was within the entire state of California a close third in milk output behind the much more expansive Tulare and Merced counties.
In the late 1950s, the Chino Valley had become a haven to dairy farmers, many of them of Dutch or Portuguese descent, who were displaced by the urbanization of southeast Los Angeles County. The preserve was formed in 1968 under the auspices of California’s Williamson Act — a 1965 law that was intended to preserve California farmland and to serve as a hedge against urban sprawl. The law granted substantial tax breaks to property owners agreeing to restrict their land to agricultural uses for at least 10 years. By 1970, the Chino Valley was the source for most of Southern California’s milk as well as a major supplier of the cheese for a much larger geographical area.
By the mid-1980s, growing numbers of dairy farmers in the preserve wanted out, as the local industry was itself being subjected to the same pressures that had been brought to bear on dairyman who had been forced to pull up the stakes of their Los Angeles County operations two decades before. Land speculators and developers eyeing the property and envisioning it as residential subdivisions supported politicians at the municipal and county levels to create a dairy-busting agenda that in time spelled the end of the preserve as a lasting entity.
In the late 1980s and into the 1990s, the county’s land use professionals were seeking to examine the desirability of maintaining the preserve’s dairies as a hedge against the burgeoning urbanization and to determine if the dairy industry had a reasonable prospect of sustaining itself in the changing environment. At the same time, the county’s elected leadership was heavily influenced by developmental interests, the major providers of political contributions. With a few exceptions, the supervisors leaned in favor of breaking up the preserve.
In 1986, the county took the first step toward deconstructing the Williamson Act’s applicability in the Chino Valley. By 1997, half of the dairies that had been operating in the preserve at its peak had left. The jousting between Ontario and Chino over annexation of the preserve had begun.
In 1999, while there were still 140 dairies operating in Chino Valley, the city of Ontario annexed nearly 8,200 acres of the 15,200 remaining acres in the preserve. Chino laid claim to the other 7,000. The county, for the most part, alternately passively and actively accepted the inevitability of the pending urbanization. Ontario drew up master plans for development of 31,000 homes, 5 million square feet of retail space and 5 million square feet of industrial space.
Chino designated over 400 acres for industrial development and earmarked 2,000 acres for new residences, with complementary plans for commercial development.
But that anticipated development came only in fits and starts. By 2005, the number of dairies had dwindled to 70. The eventual transformation of the land away from its agricultural heyday was under way in earnest. Nevertheless, the development community’s reach exceeded its grasp and the expected building boom within the preserve in the early 2000s failed to materialize. With the economic downturn of 2007, building in the area slowed to a crawl. The county, which had acquired some property in the area under the auspices of sustaining agricultural operations as well as under the assumption the land could be sold in relatively short order at a profit, became a landlord to several dairy operations the county’s political leadership and its political supporters wanted to see shelved.
Today, there are about 60 dairies operating in the Chino Valley.