City Of Industry Now In Dispute With Tres Hermanos Solar Plant Developer

A fight has apparently broken out between newly formed factions on the City of Industry City Council as well as with the company to which that city had entrusted the development of a massive solar farm on a huge swath of property lying at the southwest tip of San Bernardino County.
The City of Industry galvanized the attention of the Chino Hills and Diamond Bar communities in August 2017 when it maneuvered to have the Industry Oversight Board, by a bare majority 4-3 vote, sell it rustic 2,450-acre Tres Hermanos Ranch, which straddles the Los Angeles County/San Bernardino County border, for $41.65 million. The City of Industry had originally acquired the property through its redevelopment agency in 1978 with intentions of putting a reservoir on the land. But it had lost autonomy over the property with the State of California’s close-out of redevelopment agencies throughout the state in 2011. Vague talk of an effort to develop anywhere in the range from 10,000 to 15,000 residential units on the property ensued when GH America and South Coast Communities made a $100 million offer on the property in 2015. Concern that if such an undertaking were to proceed to fruition, even tighter gridlock on local freeways during prime commuting hours would result brought objections from the local populace and its political set. It was iterated that Chino Hills had land use and zoning restrictions that would have limited the maximum number of residential units to be built on the 1,750 acres of the ranch in San Bernardino County to 467, and Diamond Bar had limits on the developability of the 700 acres of the ranch in Los Angeles County that would allow no more than 624 homes to be constructed there.
With its acquisition of the property at a price discounted by some $59 million from what GH America and South Coast offered came the revelation that the City of Industry intended to construct a 450-megawatt solar energy project on the ranch. Though then-Industry City Manager Paul Philips asserted much of the Tres Hermanos acreage was to remain undisturbed or would otherwise be committed toward recreational and open space purposes, that claim was met with skepticism. An analysis demonstrated that, assuming the most efficient of photovoltaic cells were to be used, the 450 megawatt objective could be achieved by blanketing roughly 73.5 percent of Tres Hermanos Ranch’s 2,450 acres – 1.801.4 acres – with solar panels. This would leave some 648.6 acres, much of it nestled in the expanse’s canyons, available as open space. Nevertheless, the prospect that three-quarters of the land would be blighted with solar panels was not favorably received by many who were focused on the fate of the property.
What was revealed around that time was that the City of Industry had previously entered into an agreement, long before it had secured the property, with La Jolla-based San Gabriel Valley Water and Power to map out the creation of the solar farm. Two months after the city obtained the land, in October 2017, it was disclosed that the City of Industry had already spent $14 million, paid out to San Gabriel Valley Water and Power, on the proposal. At that time, Industry city officials voted to ratify a lease agreement and four amendments to the existing agreement with San Gabriel Valley Water and Power, which the city at that point officially identified as the developer of the project. That action allowed San Gabriel Water and Power, whose principal is William Barkett, to obtain up to $20 million in financing to proceed. It was revealed that Industry had initially authorized accepting the debt on $5 million in loans and later $11.5 million in loans relating to the project.
In a very short time, however, the situation devolved to the point that the prospect of the City of Industry seeing the solar project through to completion was brought into question. By December 2017, Barkett and his cohorts with San Gabriel Water and Power had burned through some $14 million in carrying out preliminary planning on the project and had spent another $6 million in legal fees and other nondescript expenses, and had yet to produce anything tangible in terms of physical assets on the ranch grounds or anything indeed beyond conceptual plans. Barkett and San Gabriel Water and Power submitted invoices for services relating to the solar farm proposal exceeding $1.5 million between January and March 2018 that the city has refused to pay. Some have interpreted that as an indication the City of Industry has given up on the solar farm concept at Tres Hermanos Ranch.
Throughout the close of 2017, reformist elements led by then-city ethics consultant Bill Lockyer were pushing for changes in the City of Industry’s governance structure. Philips, who was the leading advocate of the solar farm development at City Hall, was associated with Lockyer’s effort. At the same time, the city’s elected leadership, beholden to the city’s longtime political kingpin, David Perez, were not on board for the full set of reforms Lockyer was pushing. On January 11, 2018, the city council, dominated by Perez, voted 3-2 to end Lockyer’s contract. Two weeks later, the city council again adjourned into closed session and took up a discussion of firing Philips, city clerk William Morrow and Anthony Bouza, an attorney the city was employing with regard to the solar farm development issues at Tres Hermanos Ranch. Sufficient support to sack Morrow and Bouza manifested. Nevertheless, the council fell short of a necessary third vote to pull the trigger on Philips, as Mayor Mark Radecki and councilmembers Abraham Cruz and Catherine Marcucci were unwilling at that point to join with Cory Moss and Newell Ruggles in handing Philips his walking papers.
On the morning of February 27, however, the council convened into a specially called closed session meeting during which the entirety of the council voted to terminate Philips.
Within a week of Philip’s departure it was revealed that the City of Industry was beginning to rethink its tentative commitment toward the Tres Hermanos solar project.
Since that time, the City of Industry has pushed San Gabriel Valley Water and Power to provide it with a detailed accounting of what work toward the completion of the solar power project has been completed.
One problem that is now apparent is that there was a lack of clarity with regard to whether the money the City of Industry was putting up to usher the solar project along was considered seed money for the project or was being provided as a loan to San Gabriel Valley Water and Power to assist it in getting the project up and running, with an understanding that the money would eventually be paid back.
In recent months, the city has attempted to use a host of legalistic and procedural stratagems in an effort to force San Gabriel Valley Water and Power to provide the financial accounting the city is seeking. San Gabriel Valley Water and Power ignored a legislative subpoena the city council issued calling upon the company to produce documentation that the agreed-upon work had been performed, officials now say. In closed session, the council has authorized City Attorney Jamie Casso and Assistant City Attorney Bianca Sparks to obtain a court order requiring San Gabriel Water and Power to produce records of what the money the city paid the company was used for.
The relationship between the city and the company has declined to the point, the Sentinel has learned, that San Gabriel Valley Water and Power corporate officers have refused to take and return phone calls placed to them by city officials. Moreover, no representatives of the company have been in attendance at recent city council meetings when city officials intended to hold public dialogue with regard to the progress and status of the solar farm project.
One report was that some $3.5 million in money vouchsafed to the San Gabriel Valley Water and Power Company is now ensconced in a banking institution in Vanuatu.
In Chino Hills and Diamond Bar, where residents and public officials alike are hopeful of postponing development at Tres Hermanos Ranch for as long as possible or preventing it altogether, there is barely suppressed mirth at the contretemps between the City of Industry and the San Gabriel Valley Water and Power Company and the accompanying prospect that Barkett has absconded with a sizeable portion of the City of Industry’s treasury, which will make the current and future city councils there reluctant to embark on any further developmental adventurism on the wide open preserve’s rolling hillsides, canyon creeks, oak woodlands and verdant pastures teeming with owls, bobcats, mountain lions, skunks and opossum.
Mark Gutglueck

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