Tres Hermanos Conservation Authority To Parallel CH & DB Suits Vs Industry

The Tres Hermanos Conservation Authority Board met on Monday, that panel’s first meeting since the City of Industry’s purchase of 2,450-acre Tres Hermanos Ranch was ratified. The upshot of the discussion was that the authority’s executive staff will look into the efficacy of using its available resources to coordinate possible legal action to either contest altogether, limit or define the extent to which the City of Industry can pursue its publicly declared intention of constructing a solar farm on the property straddling the cities of Chino Hills and Diamond Bar.
Any legal action the authority will take will come in conformation with contemplated legal action by the cities of Chino Hills and Diamond Bar, along with challenges of the sale of the property to the City of Industry that both cities have already lodged with the California Department of Finance.
The ranch was for half of a century the playground of three fabulously wealthy men who acquired it in the early part of the 20th Century – oil baron Tom Scott; Harry Chandler, former publisher of the Los Angeles Times; and William Rowland, son of John Rowland, who led pioneers over the Santa Fe Trail to California and the San Gabriel Valley in the 1840s. In 1978 it was purchased from the Scott, Chandler and Rowland heirs by the City of Industry’s Redevelopment Agency for $12.1 million.
Industry’s acquisition of it was something of an anomaly, as redevelopment agencies were by definition engaged in the eradication of blight within the jurisdiction of their parent agencies. Tres Hermanos, which had never been disturbed other than to be used as a sprawling cattle ranch, did not meet the definition of blight. Nor was it within the City of Industry, but more than ten miles distant from its closest border. For 33 years the City of Industry allowed the property to remain relatively undisturbed, while there was occasional talk of using much of the property for a reservoir to ensure that the City of Industry would have adequate water to serve its industrial customers. Over the years, many people living on both sides of the Los Angeles County/San Bernardino County divide in Diamond Bar and Chino Hills came to assume the property was some sort of wildland preserve with its rolling hillsides, canyon creeks and oak woodlands beside verdant pastures for cattle, not to mention the bobcats, mountain lions, skunks and opossum that proliferated there.
In 2011, the California Legislature passed legislation closing out municipal redevelopment agencies up and down the state in a move that was intended to reroute much of the tax money and assets those entities monopolized to law enforcement and educational purposes as well as the other governmental agencies overlapping each individual redevelopment agency. Whereas the City of Industry formerly was able to control the Tres Hermanos Ranch property through its redevelopment agency, that control was attenuated with the eradication of its redevelopment agency. The legislation created so-called successor agencies to redevelopment agencies, which in the City of Industry’s case, consisted of the members of its city council. Thus, the successor agency was in the position of commandeering the property and perhaps wielding it in a way that was every bit as amenable to the will of Industry’s civic leaders as when the land was in the possession of the redevelopment agency.
There are, however, four limitations, or potential limitations, on the City of Industry’s autonomy with regard to the Tres Hermanos property. These consist of the California Department of Finance, which was installed by the legislature in conjunction with the 2011 redevelopment agency-terminating legislation with ensuring that the tax revenues and assets are fairly distributed among local governmental/taxing entities; an oversight board consisting of representatives of a cross section of those local governmental/taxing entities; and the cities of Diamond Bar and Chino Hills, which both ostensibly have land use authority over Tres Hermanos Ranch, given that it lies within their city limits. Moreover, cities possessing land outside their municipal limits are limited in how that land can be used, such that it can be utilized only for a public benefit, or in the alternative, preserved as open space.
As might have been expected, there was an inclination, indeed a financial incentive, shared by many of the stakeholders in the matter to maximize the amount of money to be realized from the liquidation of the property. It appeared as if that goal was being successfully pursued when Irvine-based GH America and South Coast Communities, which represented capital from mainland China, offered to buy all 2,450 acres of Tres Hermanos Ranch for $101 million. When no larger offer manifested, that sale seemed certain. But internally, things fell through with GH/South Coast when the capital needed to make the purchase dried up. A consideration was that currently Chino Hills and Diamond Bar have density restrictions on the property. The maximum number of units to be built on the 1,750 acres of Tres Hermanos Ranch in Chino Hills is 467. On the 700 acres in Diamond Bar, no more than 624 dwelling units might be built. This would make the profitability of entering into such a deal at this time marginal, at best. Nevertheless, there were persistent reports that GH/South Coast or another development company was intent on getting access to the property and constructing anywhere from 10,000 to 15,000 homes.
This created a general state of alarm among Chino Hills and Diamond Bar residents who already feel the pinch of overburdened transportation infrastructure, particularly in the morning and late afternoon commute rush hours. In May 2015, GH America without fanfare made a $100 million offer on the property. Thirteen months later, the offer climbed $1 million to $101 million and was made public. For more than a year, that reality percolated, registering deep within the cortexes of some local residents and at the periphery of others’ minds. Accompanying this was a lack of clarity and confusion, as the possibility that political and financial reality, in conjunction with the greed on the part of some powerful corporate officials and the ambition of some politicians might blend to make those 15,000 dwelling units a reality within the next decade. Then, a little less than a month ago, on August 24, the Industry oversight board, in a 4-3 vote, consented to selling the property to the City of Industry for $41.65 million.
It would not be fully accurate to say that Chino Hills officials were caught unaware by the development, as they made a challenge of the sale with the Department of Finance immediately, on August 24. Diamond Bar followed four days later with its own request. Both cities have begun to prepare legal action as well. It is anticipated that one cause of action in the Chino Hills suit is that the discounted sale will mean that the city missed out on tax revenue in the neighborhood of $5 million dollars. City of Industry is purposed to make a claim based on the same principle. In its case, its revenue loss is in the $2 million dollar range.
At the September 18 Tres Hermanos Conservation Authority Board meeting, Chino Hills City Manager Konradt Bartlam, who serves as the executive director of the authority, stated he and others who have analyzed the situation believe that Industry officials are using the implied threat of developing the ranch property residentially to stampede the Chino Hills and Diamond Bar communities into an acceptance of having the entirety of the undeveloped property blanketed with solar panels. In actuality, Bartlam said, representations that the only alternative to the solar energy project would consist of the construction of 10,000 to 15,000 residential units on the property are misleading, as the 1,091 unit maximum that applies to the entirety of the property represents a limitation that would be nearly impossible for any prospective developer to overcome, at least on the Chino Hills side of the divide. In 1999, Chino Hills residents approved, Bartlam reminded those present on Monday, Measure U, which prohibits zone changes increasing density designated in the Chino Hills Specific Plan, the Chino Hills General Plan, the city’s zoning map, or any finalized development agreements without approval by a majority vote of the electorate of the city. Thus, Bartlam shot down suggestions that the resistance to the City of Industry’s plans to develop the property as a massive renewable energy project – including filing suits in a multitude of venues challenging both the sale of the property and Industry’s intended solar energy project – might lead to a revival of the GH America/South Coast consortium agenda. Bartlam said that because of Measure U’s provisions and the opposition of the general populace to any intensified development activity that will further impact local roads, neither GH America/South Coast nor any other development company could hope to succeed with a multi-pronged effort to apply for a 10,000 unit-plus entitlement to build, ply city council members with hefty political donations and engage in legal action to force Chino Hills to accept ten times the residential density on that property than it is currently zoned for.
Diamond Bar does not have a similar restriction locking in its current land use designations and zoning map without a vote of its residents, however.
Chino Hills Mayor Ray Marquez, the authority’s chairman, steered the meeting through a discussion of legal action.
Jim Gallagher, one of the prime movers in the grass roots group Save Tres Hermanos Ranch, did enunciate concerns about “state housing mandates,” which he like others said could force the city into accepting greater density on the property if it is developed residentially.
“We need to keep that space as open as we can keep it,” Gallagher said. “It doesn’t make people much money but it does benefit the people who live around it.”
Ruth Smith, a Diamond Bar resident, said officials needed to “focus on quality of life rather than profit. Once this land is developed, it is gone,” she said.
Bob Goodwin asked with regard to the solar farm “What value does this add to the community?” Goodwin, the chairman of the group Hope for the Hills, which in 2013 was successful in lobbying the California Public Utilities Commission to rescind its approval of erecting 3.5 miles of the 173-mile Tehachapi Line, consisting of 197-foot high towers from which were strung 500 kilovolt cables carrying electricity from the world’s largest wind power farm in Kern County to Los Angeles, referenced that effort, saying it took five-and-a-half to six years for the residents of Chino Hills to prevail over Southern California Edison. He suggested some form of land swap could be negotiated for property closer to, on the border of, or within the City of Industry to secure Tres Hermanos Ranch as open space.
Bartlam referenced an appraisal done on the Tres Hermanos Ranch property in December 2016 that pegged its value as well above the less than $17,000 per acre the City of Industry is paying for it. He said that if the cities of Chino Hills and Diamond Bar had known that the property would sell for less than $42 million, both cities might have put up $10 million apiece and have sought out grants or donations or a combination thereof to more than match that price and could have purchased it with the goal of preserving it as open space into perpetuity. And, he said, the City of Industry has been less than forthcoming with information relating to the project and its scope. He pointed out that Industry officials have represented that the contemplated solar field will have an output of 447 megawatts and are simultaneously declaring they are purposed to retain a significant portion of the property as open space. Those stated goals are incompatible, Bartlam said, since covering the entirety of the 1,750 acres of Tres Hermanos Ranch in Chino Hills and all of the 700 acres in Diamond Bar with solar panels would not yield 447 megawatts. He suggested the City of Industry could only achieve its 447 megawatt electrical power generating objective by developing all of Tres Hermanos ranch and a significant portion of the 3,333 acres it owns in adjoining Tonner Canyon.
Bartlam said he and other officials had made efforts to nail down information with regard to the project but that Industry officials had not been forthcoming. Thereafter, an attempt to glean the information through publicly available sources was made, including attending the oversight board meetings. But, he said, eight straight oversight board meetings were cancelled. “From January to August, the oversight board had not met,” he said. “We think there was a variety of issues to be considered by the oversight board that was not. [We want to find out] Industry’s ultimate intent for land use. They have not been open and honest.”
Ultimately, Bartlam said, the City of Chino Hills had no alternative but to challenge the sale with the California Department of Finance and move toward the filing of a lawsuit against the City of Industry. “I suspect we will be in a tussle for a while,” he said.
Dan Fox, Diamond Bar’s city manager and the assistant executive director of the Tres Hermanos Conservation Authority, said “We [the City of Diamond Bar] are also trying to get information from the City of Industry.” He said the City of Industry’s acquisition of the Tres Hermanos property was legally questionable from the start in that “For a redevelopment agency to acquire property outside its borders, there had to be a finding the property was blighted and there was a need to remove that blight. It is difficult to establish Tres Hermanos Ranch was blighted if it has never been touched.”
Fox said those involved in the effort to preserve the land were working from a position of strength in that land owned by a public entity that lies outside its jurisdiction “under state law can only be used for a public purpose.”
Nevertheless, Fox sounded a caution, saying that the City of Industry could conceivably utilize state legislation now being debated in Sacramento which if passed will promote the construction of affordable housing to obviate the current density restrictions on the property. Under that authority, Fox suggested, Industry could work with a developer or developers to develop the property residentially for low to medium income homebuyers and in so doing bypass the land use and zoning restrictions that Diamond Bar and Chino Hills have in place. “There has been a great deal of press about state fair housing. The argument is they could define housing as a public purpose,” Fox said.
In the discussion with regard to legal action to be brought against the City of Industry, Ruth Low, a board member and Diamond Bar city councilwoman, said an effort to define “what a public purpose is” should be made. “We should flesh out what a public purpose entails and what, legally, public purposes have been,” she said.
Diamond Bar Councilwoman Carol Herrera, also a board member, said “The complication is the property is owned by a third party.”
Herrera, more than any of her board colleagues, was reluctant to allow the discussion to range too deeply into the issues of contention with the City of Industry.
“We are going into litigation and I don’t think a lot should be said in public,” she said.
Mark Gutglueck

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