SBVMWD Purchase Near Santa Ana River Headwaters Secures SBC’s H2O Destiny

By Mark Gutglueck
Earlier this month, the Orange County Board of Supervisors accepted the San Bernardino Valley Municipal Water District’s offer of $31.8 million for 1,657-acres surrounding the headwaters of the Santa Ana River at the base of the San Bernardino Mountains in Highland.
That purchase will very likely end a century-long effort by Orange County interests to appropriate rights to water within or originating in San Bernardino County.
The land in question was acquired by the Orange County Flood Control District in 1997 as a site for excavation of soil needed for construction of the Seven Oaks Dam as part of the Santa Ana River Project. Construction of the Seven Oaks Dam took place between 1993 and 1999, with further touch-ups to the facility being completed in 2000.
After the dam was in place, the Orange County Flood Control District, which is a creature of Orange County government, began casting about for purposes to which the adjoining property it had purchased could be put. On January 12, 2010, the Orange County Board of Supervisors approved the selection of Lewis Investment Company, LLC, also known as the Lewis Group of Companies, as the primary developer to assist with the conversion/development of the property into a master-planned community. That agreement called for the Lewis Group of Companies to construct on the property, which lies within the City of Highland at the east end of Greenspot Road, the Harmony residential subdivision, consisting of what was originally proposed as 3,632 homes and what was later uprated to 3,662 homes that were to confine themselves to 658 acres within the total project area, along with a neighborhood commercial center to be contained on another six acres, with an additional 16 acres set aside for neighborhood commercial uses and community public facilities including the construction of a single elementary school and a fire station on a 1.5-acre site. Other infrastructure to accommodate the development would consist of water reservoirs, a water treatment facility, a sewage treatment plant, and a pump station. The vast majority of the remaining 997 acres owned by the Orange County Flood Control District was to remain undeveloped as open space, wetlands, habitat for rare species and and crucial wildlife connectivity corridors for numerous endangered species, the project proponents said.
A draft environmental impact report was circulated among nearby property owners between March 21, 2014 and May 5, 2014, after which a final environmental impact report was completed, including public comments, and made available for public review. On August 11, 2016 the Highland City Council held a meeting that was entirely devoted to considering the Harmony project. Ultimately, the council adopted a statement of overriding considerations, adopted the environmental impact report, amendments to the general plan relating to the project, approved the zone change, adopted the specific plan, approved the development agreement, and approved the subdivision of the property.
Thereafter, a multitude of environmental groups, including the Center for Biological Diversity, the San Bernardino Valley Audubon Society, the Sierra Club, the Crafton Hills Open Space Conservancy, the Tri-County Conservation League and Friends of Riverside Hills, along with the Greenspot Residents Association filed two lawsuits challenging the project approval, alleging the Lewis Operating Company’s environmental impact report for the project accepted by the City of Highland was “inadequate,” and the report’s authors had engaged in faulty analysis of both certain elements and the totality of the project.
The suits were combined and the matter was heard by San Bernardino County Superior Court Judge Don Alvarez as a bench trial, in which he served, with the consent of all parties, as both the judge and the jury.
Judge Alvarez ruled in favor of the plaintiffs in the Center for Biological Diversity/Greenspot Residents Association/Audubon Society suit by determining the city and developer improperly defined the project, and that the environmental impact report was flawed in that it failed to properly analyze or mitigate downstream flooding impacts as well as the potentially deleterious impacts to regional water resources and wildlife habitat. Judge Alvarez found the environmental impact report was flawed by virtue of having left out of the equation the volume of fill required to elevate that portion of the project in a flood zone to a level high enough that the foundations of the structures to be built would be at least one foot above the level of maximum flooding statistically likely to occur every 100 years, together with having failed to reckon the impacts downstream of the grading at the south end of the project.
Judge Alvarez upheld the Sierra Club/Crafton Hills Open Space Conservancy/Tri-County Conservation League/Friends of Riverside Hills in their contention that the project’s environmental review violated the California Environmental Quality Act by not adequately analyzing water resources, wastewater and energy impacts from the development. Judge Alvarez did reject the plaintiffs’ contention that the project was out of compliance with state emission regulations relating to greenhouse gasses. His ruling in total overturned the approval of the project.
Ultimately, the Lewis Group of Companies elected not to persist with a revamped project proposal, and other companies contemplating development of the property, having witnessed the Lewis Group’s failure to obtain project approval, opted out of pursuing acquisition of the land.
Earlier this year, the Orange County Flood Control District solicited bids on the 1,657 acres, specifying an asking price of $25 million. Written sealed bids were due by 2 p.m. on August 30. The invitation elicited an incomplete bid from the Richland Real Estate Fund of $16 million and bids of $25 million each from the Redlands Parks Conservancy and Shopoff Advisors, and a bid of $31,815,000. from the San Bernardino Valley Municipal Water District.
The Orange County Board of Supervisors deemed the offer from the San Bernardino Valley Municipal Water District to be the highest responsive bid and agreed to the sale on October 5, 2021, the same day the San Bernardino Valley Municipal Water District voted to move ahead with the acquisition.
The San Bernardino Valley Municipal Water District taking control of the property is a development of historic import. San Bernardino County has long been considered a rustic backwater by much of the rest of Southern California, in particular wealthy, high-powered, sophisticated and politically connected entities in Los Angeles and Orange counties. Those real estate interests and speculators have engaged in a series of efforts to commandeer San Bernardino County’s water by both legal and illegal means, including the securing of water rights within the heavy watershed and deep aquifer areas at the periphery of the San Bernardino Mountains. Even before the turn of the 19th Century to the 20th Century, efforts were being made by business entities functioning out of Chicago, San Francisco and Los Angeles to divert water originating in San Bernardino County, in particular water flowing into the Mojave and Santa Ana rivers, to use in Los Angeles and Orange counties. The Santa Ana River starts at the south foothills of the San Bernardino Mountains near Highland and then winds generally southwestward through western San Bernardino County into Riverside County and then into Orange County, ultimately to its terminus in a tidal lagoon at the Pacific Ocean between Huntington Beach and Newport Beach. Orange County interests in the early part of the 20th Century sought to prevent upstream use of the water from occurring in quantities that would deprive downstream users of what they claimed was their “fair share” of the river’s water. This was complicated by flooding issues along the river, which ultimately were redressed by the construction of the Prado and Seven Oaks dams.
Escrow on the sale is expected to close by February 2, 2022. San Bernardino Valley Municipal Water District General Manager Heather Dyer and the board for the district are holding off on any further statement to the public until escrow has closed.
While the Orange County Water District property the San Bernardino Valley Municipal Water District just bought had no water rights attached to it, the adjacent Seven Oaks Dam has a 115,000 acre-foot holding capacity in its reservoir. That reservoir is at present authorized to provide “incidental water conservation,” but is not recognized as a source of water for domestic use. The San Bernardino Valley Municipal Water District earlier this year sought $2.5 million in federal funds to cover half of the cost of carrying out a feasibility study to examine if dam operations can be shifted from the current purpose of providing flood control so that at least some of the water in it can be used for aquifer recharge to augment the local water supply. The study would seek to determine if and upon what terms environmental permits could be obtained so the Seven Oaks Dam can provide both flood control and water for eventual human consumption.
“By strategically releasing the water, operations of the dam could augment our local groundwater supply while also protecting water quality, and protecting or even enhancing downstream habitat for several key species,” Dyer told the Highland Community News in April.
In 2000, the California Regional Water Quality Control Board entered a decision, known by the nomenclature 1649, which concluded that up to 198,317 acre feet of water are available for direct diversion, surface storage and groundwater recharge for beneficial use under applications 31165 and 31370 made by the San Bernardino Valley Municipal Water District and the Western Municipal Water District. The granting of those applications has never been acted upon, but the California Regional Water Quality Control Board is now considering a request by the San Bernardino Valley Municipal Water District for a time extension of up to an additional 20 years to construct the facilities to be able to access that water. The district’s possession of the acreage next to the dam makes it possible to construct the facilities and achieve the goal in its request.
The San Bernardino Valley Municipal Water District’s acquisition of the 1,657 acres renders the effort to use the water in the adjoining dam and reservoir more feasible. In turn, the district’s utilization of the water will create an opportunity to make a future claim on water rights, which will assist in preventing outside interests from horning in on San Bernardino County’s indigenous water supply.

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