Yucaipa Council Remaining Blasé In Face Of Burgeoning Graft Suspicions

By Mark Gutglueck
Yucaipa’s mayor and city council are maintaining an air of nonchalance in the face of the growing perception of impropriety in the city’s sell-off to commercial developers property bequeathed to the community two generations ago with the proviso that it be used for public or institutional purposes.
Multiple irregularities attended the city’s action in divesting, or preparing to divest, itself of the property in question, including the city council’s approval of the sale of .87 acre to a Wyoming Corporation in March of last year and the city planning commission’s less than fully-transparent consideration of and recommendation to the city council last month that the city sell another 1.67 acres of public land to a yet-unspecified entity. The intended purchaser of the 1.67 acres has not been disclosed, though there are suggestions the property is to be sold to the same entity that purchased the .87 acre parcel. In both cases, the city either consented or is purposed to consent to a changing in the land use designation/zoning from public use to commercial. In each case the city took the action it did despite a deed restriction that committed the property to being utilized for public rather than private benefit into perpetuity.
The property at issue lies proximate to or at the corner of 13th Street and Yucaipa Avenue, on either side of the Crafton Hills Fire Station.
Brothers Lester and Ruben Finkelstein were the president and vice president, respectively, of the Southwest Steel Rolling Mill in Los Angeles. Among the several corporate offshoots of their company were Lester Ruben Corporation No. 1, Lester Ruben Corporation No. 2, Lester Ruben Corporation No. 3, the  Finkelstein Foundry Supply Company and the Finkelstein Supply Company. In the 1950s, Lester and his wife set up a weekend home in Yucaipa, and shortly thereafter Lester and Ruben purchased some 670 acres surrounding Lester’s homestead upon which they established the L and R Cattle Company.
In 1964, Ruben and Lester Finkelstein gave indication that they would potentially provide, through their foundation, property upon which a community college in the then-unincorporated community of Yucaipa would be built. In 1966, the Finkelsteins made good on that offer with an initial donation of 167 acres, following that original bequest with the provision of 76 more acres in 1970 and subsequently donating 251 acres of additional land.
Those donations entailed deed restrictions that limited the use of the land to those for charitable, educational and recreational purposes. In 1970, Yucaipa High School at 12358 Sixth Street relocated to its current campus at 33000 Yucaipa Boulevard on the property donated by the Finkelstein Brothers.  A significant portion of the donated land was used for the campus of Crafton Hills College, which opened in 1972.  The Crafton Hills Fire Station was built on the property the brothers provided. Recreational facilities, including four baseball diamonds now grace part of the property. The land was also used for a water district flood retention basin.
When the City of Yucaipa incorporated in 1989, title to the remainder of the property not comprising the college and high school campuses and facilities owned or operated by other agencies transferred to the city. The deed restrictions remained in effect.
In 2018, machinations with regard to a portion of the property donated to the community by the Finkelstein Brothers to the Yucaipa community took place, the progression of which have brought the forthrightness of the city council and other Yucaipa civic officials into question.
On November 19, 2018, the city received a letter from JADE Real Estate Holdings that expressed interest in the company purchasing 0.87 acres of property located at the northwest corner of Yucaipa Boulevard and 13th Street. JADE’s intention related to possible commercial development of the property. Shortly thereafter, during a closed session at its December 9, 2018 meeting, the city council gave direction to staff, despite the deed restriction relating to the property, to pursue disposition of the parcel.
For the property to be developed commercially, the deed restriction had to be removed.
At the Yucaipa City Council meeting on March 25, 2019, that panel’s members conducted a consideration of what that evening’s agenda designated as “the disposition of city property: 0.87 acre parcel, northwest corner of Yucaipa Boulevard and 13th Street (portion of assessor parcel number 299-321-62).”
In a report to the city council relating to the item, Paul Toomey, Yucaipa’s director of community development, wrote that he recommended the city council “Find the city disposition of a portion of assessor parcel number 299-321-62 is consistent with the general plan; and adopt a categorical exemption pursuant to the California Environmental Quality Act of 1970 guidelines; and direct staff to file a notice of exemption; and approve the sale of city-owned property located at the northwest corner of Yucaipa Boulevard and 13th Street, further defined as a portion of assessor parcel number 299-321-62, for an amount of $500,000 to JADE Real Estate Holdings, Inc.; and authorize staff to establish an amount from the proceeds of the sale of the property sufficient to pay the city’s share of closing costs and expenses; and authorize the city manager to make any necessary non-substantive revisions and execute a purchase and sale agreement and other necessary documentation in order to complete the property disposition process; and allocate the net proceeds from the sale to the general fund one time capital projects fund for recreational facility improvements.”
Anticipating that the city council was amenable to designating the 0.87 acres as “surplus property” which could be sold, Toomey asserted in the body of the report that a necessary requisite of the rescission of the deed restriction on the property had been met. “In July 2018, the Finkelstein heirs executed a termination of deed restriction, permitting the property to be developed as proposed, subject to the condition that the net proceeds from the sale of the land be used for recreational purposes,” Toomey wrote in the report. Nowhere in the report, dated, March 25, 2019, did Toomey explain how it was that someone with the city had the prescience to obtain the termination of deed restriction from the Finkelstein heirs in July 2018, some four months before JADE Real Estate Holdings, Inc. sent the city a letter indicating its interest in purchasing the property.
Late last year, at its December 18, 2019 meeting, the Yucaipa Planning Commission took up a proposal that the city make a minor general plan amendment to change the land use designation of approximately 1.67 acres adjacent to the Crafton Hills Fire Station, yet another portion of the land gifted to the community by the Finkelstein Brothers, to general commercial zoning. The land use designation change requested is to impact portions of vacant property adjacent to 32664 Yucaipa Boulevard, referred to as assessor parcel numbers 0299-321-61, 84 and 85. The 1.67 acres of land is proximate to the 0.87 acres sold to JADE near the corner of Yucaipa Boulevard and 13th Street. One of the lots is east of the Crafton Hills Fire Station, and the other west of the fire station.
As part of the March 25, 2019 action, the city council approved along with the sale agreement a land use designation/zoning change that was applicable to the 0.87 acre piece. Last month the planning commission recommended that the city council make the same change to the two other parcels totaling 1.67 acres.
In his capacity as director of community development, Toomey recommended that the planning commission upon conducting a public hearing on December 18 adopt a resolution approving the general plan amendment/land use district change to alter the zoning on both pieces on either side of the fire station to general commercial, make the necessary amendments to reflect the change in the city’s zoning ordinance and find that the commercial project to be built on the property is exempt from the environmental review requirements of the California Environmental Quality Act, despite the consideration that no specific use for the site or sites is planned.
The planning commission did as recommended by Toomey.
The city council, now armed with the planning commission’s recommendation, has what its members now consider to be sufficient political cover to proceed with making the change to the zoning of the 1.67 acres and proceed with the sale, as was done with the .87 acre parcel last year.
While multiple questions attended the city’s action, the city council and mayor, City Manager Ray Casey, Toomey and the planning commission were able to shunt them aside through a time-tested stratagem government officials use when they want to conceal from the public action that may prove controversial, problematic or embarrassing, consisting of hiding the action in plain sight during an official proceeding during which public interest is flagging and public attendance and participation is virtually nil. Historically, such meetings correspond with major holidays, the classic manifestation of which are those just prior to Christmas. In the instant case, the Yucaipa Planning Commission took up the matter of the general plan amendment to change the land use designation of the 1.67 acres of property that had been part of the Finkelstein Brothers’ bequest one week before Christmas and four days before the onset of Hanukkah.
Thus effectively buried and removed from the table of open public discussion was the issue of whether the city, as the inheritor of the property donated under conditions specified by Ruben and Lester Finkelstein, can defy the Finkelstein Brothers’ wishes as articulated in the deed restriction.
Exacerbating the transparency issue is that Yucaipa, unlike the vast majority of municipalities in San Bernardino County, does not video its council meetings to broadcast them live and post them to its website, nor does the city video its planning commission meetings. Yucaipa city officials have also opted out of imposing on themselves exacting reporting and disclosure requirements that are increasingly the norm in other cities. California Government Code § 84615 (f) requires that if a local filing officer such as a city clerk receives campaign finance disclosure documents from an elected official or candidate for elected office that the were filed electronically, those campaign financing disclosure documents must be posted on the internet “in an easily understood format that provides the greatest public access.” While some cities have passed ordinances mandating that their elected officials make electronic filing of their campaign disclosure documents, thus ensuring that those cities’ constituents can monitor in a timely fashion where and from whom their representatives are receiving campaign cash, Yuciapa is not among them. Either coincidentally or calculatedly, individually or in concert, Yucaipa’s elected officials have uniformly made a practice, without exception, of filing their campaign disclosure documents on paper rather than electronically. Thus, Deputy City Manager/City Clerk Jennifer Crawford is not constrained by California Government Code § 84615 (f). Nor has she elected, as she is at liberty to do, to convert the paper campaign disclosure filings the members of the city council have lodged with her office to an electronic format by scanning them, and then posting the mayor and city council members’ campaign disclosure filings to the city’s website, not out of legal necessity but rather in the interest of ensuring the Yucaipa citizenry’s easy access to information relating to who may be influencing the decision-making of the city council.
In the aftermath of the December 18 planning commission meeting, a relatively small contingent of Yucaipa residents who had previously shown concern over the city’s sale of the .87 acres in March took note of the city’s intentions with regard to the sale of another 1.67 acres of the property that had been deeded to the community by the Finkelstein Brothers, remarking the way in which the city was engaged in an effort to fly the sale under the radar of the public in general by having the planning commission put its imprimatur on the sale during what was arguably its most obscure meeting of the year. Shortly after the meeting, city officials shuttered City Hall for the period between Christmas and New Years Day, rendering efforts by members of the public and the press to inquire about the proposed sale and the legal basis for obviating the deed restriction the Finkelstein Brothers had insisted upon when bequeathing the 494 acres to the community in the 1960s and 1970s futile. While no specified buyer for the 1.67 acres was officially identified by the city, word on the street was that the city’s intent was to sell the property to the previous purchaser of the 0.87 acres, JADE Real Estate Holdings, Inc.
JADE Real Estate Holdings, Inc. is registered in Wyoming as a corporation and in California as a foreign limited-liability company. The filing with the California Secretary of State’s Office was made on April 9, 2018. The registered agent on file for the company in California is Debra Hanna, with the company headquartered at 25772 Lawton, Loma Linda, California 92354. The company’s principal address is 25772 Lawton in Loma Linda. The company has two principals on record, Hanna, who is shown as residing in Loma Linda, and Janet Jones, who lives in Redlands.
According to a Wyoming-based company, Wyoming Corporate Services Inc., which handles the registration of companies based outside of Wyoming as Wyoming corporations, an “advantage” of being registered as a Wyoming corporation is that the officers of those companies do not have to be publicly declared and can remain hidden. “Wyoming has no requirement for the names of shareholders to be filed with the state,” according to the Wyoming Corporate Services Inc. website.
Former San Bernardino County Supervisor and Assessor Bill Postmus, who served in those elected capacities from 2000 until 2009, after which his career imploded in scandal following revelations relating to his acceptance of bribes and kickbacks while serving in the position of chairman of the board of supervisors and using his position as assessor to hire political operatives in the assessors office from which they carried out partisan political activity, was convicted on 14 felony political corruption counts in 2011, for which he ultimately was sentenced to three years in state prison. One of those convictions, violation of California Government Code Section 1090, precludes him from holding political office in California ever again. Postmus, however, has remained in the political game in California and San Bernardino County, utilizing a Wyoming Corporation, Mountain State Consulting Group, to launder political contributions to local politicians, such that the donors of the political cash are obscured from the public. Postmus and Mountain States Consulting have garnered considerable negative publicity in recent months as a result of this activity.
A perfect storm had evolved, with the City of Yucaipa having engaged in a controversial, indeed perhaps illegal, set of actions in actual or potential connection with a company that had made a deliberate effort to obscure who its corporate officers were in making its corporate filings out of state, while the city council members, in conjunction with other city officials, had themselves engaged in deliberate acts to limit the public’s ability to make a determination of whether they had received money from that company or any of its corporate officers, either in the form of campaign contributions or payments either for work rendered or as investment returns. Given the entirety of the circumstances surrounding the city’s sell-off of the Finkelstein Brothers-bequeathed properties, some Yuciapa residents found themselves inexorably pushed to the conclusion that the sales arrangement was riddled with fraud, the primary issue in which was the influence that JADE Real Estate Holdings, Inc. is exercising over Yucaipa city officials.
This week, on Thursday, City Hall reopened after the prolonged holiday closure, with the council enmeshed in the controversy. In the face of the contretemps, city officials and the city council in particular were having difficulty gaining their footing. Perhaps overwhelmed by the suggestions that their integrity was in question, four-fifths of the council proved unwilling to respond to questions relating to the matter.
Generally, three members of the council and Mayor David Avila spurned the Sentinel’s efforts to get them to go on record with regard to a number of issues the controversy has raised.
Neither Avila, nor Councilwoman Denise Allen-Hoyt, nor Councilman Bobby Duncan responded to the Sentinel’s written questions relating to whether they were fully cognizant of the deed restriction relating to that property, whether in their views individually or collectively violating that deed restriction for any purpose was justifiable, whether they were personally convinced there was grounds to violate that deed restriction, whether they could articulate the grounds for violating the deed restriction and justify the sale of the property along with transitioning the zoning/land use designation on that property from public use to commercial use. None of the three seemed particularly anxious or motivated to dispel the widening impression that there were improprieties with regard to the anticipated land sale. Efforts to reach Avila at a phone number – (909) 790-5336 – were met with a constantly rapid busy signal. He did not respond to a request for a return call lodged with the board secretary of the Omnitrans Executive Committee, of which he is the chairman. Efforts to reach Allen-Hoyt at Crafton Hills College, where she is an instructor, were not successful.
Additionally, Avila, Allen-Hoyt and Duncan did not respond to written questions with regard to how city staff was foresighted to obtain from the Finkelstein heirs, in July 2018, an authorization for the sale of the assessor parcel number 299-321-62 property when an offer to purchase that property was not made by JADE Real Estate Holdings, Inc. until November 2018. Avila, Allen-Hoyt and Duncan did not respond to an inquiry as to whether they believed the Finkelstein Brothers’ heirs had the authority to waive the stated intent of the Finkelstein Brothers as spelled out in the deed restrictions on the property in question and they did not, in response to the Sentinel’s request for them to do so, cite the language in the deed restriction that authorized the Finkelstein Brother’s heirs to rescind the conditions of the deed restriction.
The Sentinel did succeed in reaching Councilman Dick Riddell on January 1. He said he would attempt to make a response to the questions provided to him in writing relating to the sale and proposed sale of the deed-restricted property, but had not done so by press time on January 3.
Councilman Greg Bogh, with whom the Sentinel spoke on January 1, said he had not previously known that anyone in the Yucaipa community was opposed to the rezoning to commercial use of the old L and R Cattle Company property that had been deeded to the community by the Finkelstein Brothers or its sale to entities intent on developing it.
“I never heard that people had any issue with the conversion of that property to commercial zoning,” he said, adding that the proceeds from the sale would have been used either to purchase property elsewhere that would have been kept for a public purpose or to defray the cost of improvements to the public facilities already in place on the property that had originated with the Finkelstein Brothers. “We were looking for different ways to fund improvements to the baseball fields and put in parking lots. If you are saying anyone had an issue with that conversion, that’s a first to me.”
As to the suggestions or accusations that there was a venal element in the city’s sale of the property to JADE Real Estate Holdings, Inc., Bogh said, “I don’t know where those accusations are coming from.”
Bogh said that JADE had not provided him with any money or contributions “at this point. I wouldn’t take anything from them anyway.” He noted that 2020 is an election year and that “We have a political season coming up. It shouldn’t surprise me but politics is turning into a different animal, unfortunately.”
Bogh emphasized his perception that the city’s action with regard to the property in question was benign. “I’m not an expert, but we were looking at converting that property so the city could improve the ball fields in that area,” he said. “I know very little about it. The idea sounded legitimate, which was to make the sale and use the proceeds to make the improvements that needed to be done.”
Statements of economic interest, known as Form 700s, filed by each the city council members with the California Fair Political Practices Commission, show no business or financial interaction between any of them and JADE Real Estate Holdings, Inc.
A public records request made to the Yucaipa city clerk’s office by the Sentinel for the campaign financing documents filed by the council members had not been responded to by press time.
The Sentinel made a further inquiry with Yucaipa City Attorney David Snow with regard to the legality of city’s unilateral obviation of the deed restriction relating to the gifting of the property to the Yucaipa community, if the Finkelstein Brothers’ heirs have the authority to waive the stated intent of the Finkelstein Brothers as spelled out in the deed restrictions on that property, and whether there was language contained in the deed restriction that authorized the rescission of any elements of the deed restriction. Snow responded to the Sentinel’s inquiry just before press time today, saying he was reviewing the issues inquired about and was looking toward providing a response next week.

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