Colton Moves To Settle La Loma Hills Lawsuit On Terms Favorable To Developer

By Mark Gutglueck
The Colton City Council at its regularly scheduled meeting on Tuesday, March 15 voted during a closed session discussion to move toward a settlement of a lawsuit brought against it by developer Scott McKhann and his company, Modern Pacific Homes, over the city’s 2021 rejection of the McKhann/Modern Pacific proposal to build a cluster of 86 homes on the hillside near the intersection of Bostick and Litton avenues in La Loma Hills.
Reportedly, Colton City Attorney Carlos Campos advised the city council that it should make an exit from the litigation to prevent embarrassing details from emerging indicating that past and current council members and city staff had improper contact and arrangements with McKhann and Modern Pacific.
Information provided to the Sentinel along with documents the Sentinel was able to independently turn up show that underhanded means were used to doctor staff reports to tilt a decision by the Colton Planning Commission in favor of the project. Moreover, critical information relating to the standards the city ultimately applied to the project were changed and hidden from the planning commission, which served as the initial decision-making body with regard to the project.
Last year, the planning commission gave an initial but ultimately overturned approval to the project. Churned up during the discovery process for the lawsuit is that former Colton Mayor Richard DeLaRosa was militating on behalf of Modern Pacific in what city officials have grounds to believe was a paid capacity. Furthermore, information has come across Campos’s desk to show that city officials, including those in the city’s code enforcement division, proactively sought to use their authority to dissuade residents form their opposition to the project and desist in their efforts to moderate the project’s intensity. Despite evidence that the developer was in some fashion able to pull strings that impacted city action, indicating collusion of some sort between Modern Pacific on one end and either members of the city council or high-ranking staff or both on the other, Campos has advised the council that use of that information at trial would be ill-advised, such that it would shed discredit on City Hall in general. Despite the city’s possession of information that would if released cast McKhann and Modern Pacific in a poor light, it would redound equally to the detriment of the city, tarring the mayor, one or more members of the city council and some city staff members, Campos anticipated. Accordingly, Campos has advised the council that it should settle the lawsuit on terms favorable to Modern Pacific to bring the danger the case represents to the city, its reputation and several specific city officials to an end.
A hint of what is in the offing occurred this week at the March 15 city council meeting. After returning from a closed session discussion of the council, Campos slyly stated that the city council had “given direction,” but had taken “no reportable action.” Parsing what Campos said, he was telling the public that he now had authorization to settle the Modern Pacific case brought against the city but that such a deal has yet to be fully effectuated.
The Modern Pacific development debacle extends back more than two decades across six Colton mayoral administrations. In 2001, Deirdre Bennett became mayor of Colton and Darryl Parrish acceded to the position of city manager. In tandem, they began an effort to annex properties lying just outside the Colton City Limits, many of them so-called “islands,” meaning they either were not contiguous with the city or were enclosed by the city. The duo used a loophole in California law to bypass the will of a majority of those being gobbled by Colton. Bennett and Parrish engaged in these takeovers, which were contrary to the wishes of the majority of the landowners and homeowners involved, by ensuring that fewer than 25 registered voters lived within the pockets of land the city was absorbing, as long as five percent of the residents signed onto the annexation. In this way, the council led by Bennett was looking to accomplish a piecemeal expansion of the city, often bringing residents into Colton who did not want to be part of it but who were powerless in the face of government and the law to stop it. In 2004, Colton initiated its annexation of a major portion of the land in La Loma Hills. In addition to finding themselves forced to assume the status of Colton residents, an unwanted consequence of the city’s action to the La Loma Hills residents was that the pre-zoning and zoning on the property surrounding them was changed from its very low-density residential designation, known as VL in municipal planning parlance, to low-density residential, billed as R-1. Colton’s annexations of property at its periphery ultimately set the stage for its city council, its city management, its community development and planning divisions and its planning commission to seize land use authority in La Loma Hills and control, in large measure, the fate and the lives of those who lived there.
Scott McKhann, a wealthy land speculator and real estate developer from Dana Point, became interested in La Loma Hills because the land there was relatively inexpensive, at least in some measure because a portion of it is undevelopable, some of it is developable only upon its augmentation with utilities and infrastructure it does not currently have, and because the zoning and other restrictions on it render the land that is developable capable of hosting projects of low density. He believed he could, through cultivating political contacts and connections, uprate that density and turn a substantial profit by developing it accordingly. Ultimately, it seems, he is being proven right.
McKhann acquired or tied up roughly 242.8 acres in the La Loma Hills. The angularity of the slopes on some of the acreage made development on certain parts of the property virtually impossible without extensive grading or slope adjustments, both of which were problematic for a number of reasons. Additionally, development along the ridgelines in the La Loma Hills was prohibited. Accordingly, McKhann initially signaled some seven years ago that he was intent on building 62 upscale hillside homes on the land.
This proposal met with no, or negligible, resistance of the nearby existing homeowners and landowners, who generally considered the area to be an elegant one that should not be worsened by any residential construction of a lesser character. Based upon McKhann’s representations and those of the city, there was acceptance of the developmental prospects enunciated, and certainly no alarm. In time, the ground would begin to shift beneath the feet of those La Loma Hills residents who had originally welcomed McKhann within their midst.
The first indication that McKhann had developed extraordinary influence at Colton City Hall came when the zoning on a portion of the property that had remained as VL – very low density – was changed without public notice to R1 – low density.
Next, it was learned, McKhann was being given unprecedented credit for having purchased property along the ridgeline. Ridgeline property is held off limits from residential development as a general principle. Someone at the city had made a determination outside the public process that since McKhann owned property further down the hill, midway up the hill and along the ridges at the top of the hill, he should be given density considerations lower down on his property since he could not build high up on his property. There was no basis in the city’s code or practices for that concession.
With all current properties in the La Loma Hills neighborhood sitting on lots of 9,580 square feet or more and homes set back from the street by at least 80 feet, McKhann was, following the city’s adjustments, at liberty to build on 5,445 square-foot lots with 60-foot minimum property frontages. This alarmed nearby residents.
A further issue troubling La Loma Hills residents was the city going along with the so-called “clustering” of the homes McKhann was intent on building. Of note was that planners had long respected the concept of the La Loma Hills community eschewing “stacked and packed” homes, such that residences were spread about and blended into the hillside rather than crammed together. This was an aesthetic standard virtually all of those living there shared. What McKhann and someone or several someones at City Hall did to compromise this was to pervert and widen an exception that allowed denser development in certain areas of La Loma Hills. Previously, a land owner/developer was potentially permitted to cluster homes on a portion of property that had a slope of greater than 20 percent, conditional upon proper grading being performed on the property to accommodate those homes. This exception had not been exploited in the past, as developers had opted to maintain the neighborhoods there as relatively opulent ones that would be cheapened by the placement of homes in their midst that were jumbled together. Through some unknown manipulation, however, McKhann induced the City of Colton’s planning division to deviate  from what had been the previous standard on slopes and clustering. Moreover, the fashion in which this was carried off was noteworthy for the surreptitious way in which it was effectuated.
On October 6, 2020, the city council took up what was logged on its agenda as the soc-called Phase 4 Zoning Code Clean-up. The item, rather innocuously, was listed on the agenda as involving: “Chapters 18.04; 18.06; 18.18; 18.36; 18.41; 18.42;18.48 18.50; and 18.58 of title 18 (zoning) of the Colton Municipal Code related to definitions, permitted uses, C-1 neighborhood commercial district, parking and loading, hillside standards, performance standards, special provisions, code administration, and signs.”
Buried in the new ordinance to be adopted that evening was a change relating to allowing the clustering of homes. Previously, a developer could, if it was deemed desirable and worth doing, cluster homes “on sites with an average slope of twenty percent or greater.”
By its October 6, 2020 vote, followed by a second reading of the ordinance, the city council changed that section of the city code relating to development on sloped property thusly: “The hillside standards contained herein apply to all uses and structures within areas having a natural slope percentage of 15 percent or greater over an area being graded and requiring a grading permit. This includes all subdivisions, grading, or new development projects with slopes that are calculated at 15 percent or greater over the area being graded and require a grading permit unless otherwise exempted by this code.”
Despite state law requiring a local government to inform those residing 500 feet or closer to a spot impacted by the government’s action, no notices were issued to those so situated around McKhann’s property in the La Loma Hills. When the change was given its second confirming vote on October 20, 2020, the item was placed on that evening’s agenda’s consent calendar. The consent calendar is supposed to be reserved for routine, noncontroversial matters.
A wide cross section of La Loma Hills residents were stirred up and animated. Among them were Richard Zaragosa, Celeste Carlos, Pamela Lemos, Erika and Andrew Perez, and John Albiso, who were considered the leadership of La Loma Hills Alliance, referred to by certain elements at City Hall as a “gang.” In rapid succession, the project went from the 62 units spread across the property that McKhann originally referenced and which the residents of the neighborhood were willing to accept to 68 units, to 72, to 79, to 84, to 88, and then dipped to 86.
On February 23, 2021 the Colton Planning Commission, with commissioners Carmen Cervantes, Richard Prieto, Angel Delgado, Gary Grossich and Tish Baden prevailing over commissioners Daniel Payne and Adam Raymond, gave approval to the proposed development of 86 clustered single-family lots on a 49.39-acre property located south of Litton Avenue, west of Bostick Avenue and north of Palm Avenue in the La Loma Hills district of Colton.
On April 6, 2021, the city council heard an appeal by the La Loma Hills Alliance of the planning commission’s decision to approve a tentative tract map and conditional use permit for the 86-lot single-family home hillside “cluster” development McKhann and Modern Pacific had been given permission to proceed with. The city council voted 5-to-1, with Councilman Kenneth Koperski absent and Mayor Frank Navarro dissenting, to uphold the appeal and deny the project.
Subsequently, Modern Pacific communicated to staff a willingness to redesign the project to address comments and concerns heard during the appeal hearing. It further requested that the council review and take final action on the revised project. Additionally, Modern Pacific retained the services of an attorney, Gregory Powers, who alleged certain deficiencies in the proceedings and violations of recently enacted state laws, in particular, Senate Bill 330, in the city’s rejection of the project. Powers claimed Modern Pacific should be allowed to redesign the project to address the city council’s and community’s concerns. In doing so, an overture to reduce the total unit count to 79 homes and increase the minimum lot size from 5,000 square feet to 6,000 square feet was made.
On July 6, 2021, the council considered the revised version of the project. On a motion by Councilman John R. Echevarria seconded by Councilman Luis S. González, the revised project was rejected on a vote with Councilmen David J. Toro, González, Echevarria and Ernest R. Cisneros, prevailing, Mayor Frank Navarro and Councilman Kenneth Koperski dissenting and Councilman Isaac Suchil not participating. Thereafter, on July 28, 2021, McKhann and Modern Pacific sued the city, alleging the city had unfairly denied the project, violated the Housing Accountability Act, violated the Subdivision Map Act and engaged in inverse condemnation. “Modern Pacific spent over six years processing a project that was consistent with the general plan and zoning designations for the site and furthered the housing objectives the city articulated in its housing element,” the suit stated. “During that time Modern Pacific was forced to repeatedly revise and change the project over the course of eleven planning commission and city council meetings, while spending enormous amounts of money, only to have the rug pulled out from under its feet at the 11th hour through project denial for purely political reasons.”
There is a division at City Hall over the project. Virtually the entirety of city staff and Councilman Koperski and Mayor Frank Navarro are favorably disposed toward McKhann, who exercises a Svengali-like hold on them, La Loma Hills residents maintain. That contrasts with the attitudes of Councilmen Toro, González, Echevarria and Cisneros, they say. Several of the more vocal residents of La Loma Hills maintain they have been repeatedly targeted by the city’s code enforcement division as part of an effort to dissuade them from speaking out. In particular, Zaragosa was hit with citation after citation, to the point that he has desisted in his protests and is no longer considered to be a member of the “gang.” La Loma Hills residents point out that the city’s code enforcement division has simultaneously ignored code violations on McKhann’s property, including the illegal dumping of seven dump truck loads of dirt and debris there. They have insinuated that there has been collusion between former Mayor Richard DeLaRosa, who has apparently been retained as a Modern Pacific representative by McKhann. They point to an acknowledgment made by current Mayor Frank Navarro that he met with McKhann and DeLaRosa in 2019, relatively shortly after he assumed the mayoralty in December 2018, and as McKhann was intensifying his developmental designs on the property.
Colton, unlike most other cities in San Bernardino County, does not post the California Form 460 campaign finance disclosure forms for its elected officials on its website, making it difficult to immediately determine if McKhann has purchased influence over Navarro and Koperski through donations to their political war chests.
Project opponents maintain the developer, Scott McKhann, has been accorded accommodations he did not merit, and that city staff has consistently prevented the public from getting relevant information about the project he is pursuing in a timely manner. They maintain, contrary to Powers’ assertions on behalf of McKhann and Modern Pacific that the project was consistent with Colton’s general plan and its zoning designations, the applicant was seeking approval of a project that in multiple respects was out of step with what the city’s standards were, and that elements within the city’s bureaucracy had sought to move the goal posts in Modern Pacific’s favor in the midst of the game, such as when it changed the 20 percent slope requirement to a 15 percent slope requirement in allowing home clustering.
Planning Commissioner Gary Grossich said he felt the concessions in the vicinity of Litton Avenue and Bostick Avenues were not improper, even though they are out of character with the surrounding properties, since the land further up the hill near the ridge owned by McKhann will not be developed. Grossich said he was not aware of the change made by the city council at the behest of staff in October 2020 that loosened the city’s standards by reducing the threshold for clustering homes from land with a slope of 20 percent or greater to land with a slope of 15 percent or greater. He further said the commission had never examined development proposals for the property that had as few as 62 units.
Word received by the Sentinel is that the city council will announce at its April 19 meeting that the city is going to settle the lawsuit brought by Modern Pacific Homes LLC against the City of Colton on terms favorable to McKhann. The mayor, city council, city manager and city attorney did not respond to the Sentinel’s efforts for confirmation, denial or clarification on that point.

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