Top county officials insist that there is nothing legally or ethically wrong with, and the county’s taxpayers will suffer no loss by, bypassing a competitive bid process on the sublease of 314.21 acres of Army Corps of Engineers land at Prado Regional Park where independent entities for nearly 50 years have operated two 18-hole golf courses.
In April, the San Bernardino County Board of Supervisors is on a trajectory to roll over the existing sublease arrangement with the current golf course operator, who in 2023 bought out the successor to the first company that developed the property, which represents just under 16 percent of the land at the 2,287.7-acre park. In addition to the golf courses, Prado Regional Park offers other recreational options, which include fishing, a shooting range, archery range, camping, hiking, biking and nature trails, a splash pad, disc golf, soccer fields, a softball diamond and an equestrian center along with picnic facilities and a meeting room.
A set of golfing aficionados and investors who have put together their own proposal say they have been rebuffed by the county consistently over the last year as they have sought to get officials to not just consider their alternative but put the sublease out to bid entirely to allow for competing offers and extract from those with the talent, expertise, experience and wherewithal to operate a golf course the best option to benefit those using the facility while returning the most revenue to the county.
Prado Dam, which lies on the Santa Ana River near Corona in Riverside County and was built by the Army Corps of Engineers, entails an impoundment area of over 10,000 acres that also extends into San Bernardino County. In 1972, after the California Water Commission gave its approval, San Bernardino County entered into a lease arrangement with the federal government/Army Corps of Engineers to lease more than 2,000 acres in that impoundment area at the southernmost extreme of San Bernardino County south of the Chino City Limits for the development of a regional park. In 1975, the county entered into a sublease of roughly 314.21 acres with a consortium of medical and dental professionals, El Prado Golf Course Management, LLC, led by Leo Kenneth Heuler, DDS, who undertook to develop the property as two 18-hole golf courses, situated around the intersection of Euclid and Pine Avenue.
The entirety of the golf course, as indeed the entirety of Prado Regional Park, just about three miles north of the Prado Dam, lies well below the 100-year flood plain, that is, at a level which is lower than that which is statistically likely to be completely covered by water generated by a major deluge once every century. Thus, even in years which do not experience heavy rains, the land is subject to flooding two to three times annually on a continuous off-and-on basis during winter and spring months. Consequently, the Army Corps of Engineers conditioned the lease such that anything beyond minimal construction of structures was restricted on the property, requiring that it remain undeveloped as open space or for recreational use.
In 1976, Prado Regional Park opened, a major component of which was the first of the 18-hole golf courses that had been completed by the consortium of doctors who had leased the property. Subsequently, the second 18-hole course was completed, and both have remained continuously open to the public for 44 years, with the exception of days when the courses were flooded. Aside from the ponds, undulations, sand traps, bunkers, trees, vegetation, fairways and greens on the links, the bordering rough, the two natural waterways – Chino Creek and Cypress Creek – that crossed the property, the bridges over those creeks, teeing grounds and teeing boxes, the facility was augmented with a clubhouse, a golf cart barn, maintenance facility and a paved parking lot. A key factor to the profitability of the golf operation was a liquor license the operators were able to attain for the facility’s bar, café and banquet facility, contained within the clubhouse.
By 1999, the original participants in the El Prado Golf Course Management, LLC consortium that had developed the golf courses, including Leo Heuler, began the gradual transition of the golf courses’ operation to another generation of medical professionals headed by Heuler’s son, Walter Heuler, a psychiatrist. That transition was completed by 2000.
By 2004, the popularity of golf as a participatory sport in the United States began to decline. According to Factset Insight, between 2003 and 2018, the number of golfers in the United States dropped by 6.8 million. This resulted in the loss of approaching $5 billion in green fees and attendant charges across the industry. At the same time, the increase in property values made selling golf courses to real estate speculators and/or residential and commercial developmental interests tempting, such that in the 2003-to-2018 decade-and-a-half, more than 1,200 golf courses around the country closed.
Because the U.S. Army Corps of Engineers controlled the underlying fee, there was no prospect the El Prado golf courses would be converted from what they were to anything other than some form of recreational use or open space. Moreover, the closure of competing courses, to a limited extent, kept golfers coming to El Prado. Nevertheless, the golfing operation there was proving somewhat less lucrative than it had been in the past. While El Prado Golf Course Management, LLC managed to make good on its sublease payments to the county, the profitability of the golf operations at El Prado Regional Park was diminishing, and the reinvestment in the grounds began to lag.
Confident the downturn in the interest in the sport was part of a cyclical pattern and that there would soon be a revival in the popularity of golf, the consortium headed by Walter Heuler, El Prado Golf Course Management, LLC, sought in 2015 to exercise the option that was part of the original deal to extend the lease for 40 years, though 2055. The county, however, less sanguine about golfing’s future and entertaining other recreational concepts relating to how the 314.21 acres might be used, maneuvered out of that deal, granting El Prado Golf Course Management, LLC only a 5-year extension of the sublease.
By 2019, the county was leaning toward revamping its master plan for El Prado Regional Park, which was to include the addition of an entertainment/concert venue, special sports event/tournament centers, perhaps to feature a soccer complex that would entail up to 24 soccer fields and water park amenities. To accommodate these there was talk of dispensing with one or even both of the golf courses.
At that point, Walter Heuler was 70 years old. Both he and virtually all of his partners in the Prado golf courses venture, several of whom lived outside California, had lost the enthusiasm for the golf operation they had when they were in their 30s and early 40s. With investment back into the Prado Golf facilities having been minimized years before, dilapidation there was beginning to show. County officials, including those in its regional parks and real estate divisions, were concerned about the courses’ state of dishabille and the potential damage to the county’s prestige, given the Prado courses’ role in serving as a window on San Bernardino County to the world’s golfing devotees. As 2020 was approaching, at which point El Prado Golf Course Management, LLC’s five-year sublease was set to end, county officials were looking toward terminating the relationship with Heuler and his group in order to find a more suitable candidate to operate the courses and elevate them to a condition that would reflect more positively on the county or to perpetuate their operation at a marginal level just long enough for arrangements to be made to put the property to another use.
The deadline for ending or extending the lease was August 31, 2020, which came and went without a rollover or renewal of the lease taking place. Instead, a month-to-month perpetuation of the golfing operation went into effect and remained in place over the next six months while discussions between the county and Heuler proceeded. Ultimately, on March 9, 2021, the San Bernardino County Board of Supervisors approved a five-year sublease extension between what was termed in the county’s documents “El Prado Golf Course, a California limited partnership” and the county backdated to September 1, 2020 and running through to August 31, 2025 “for the 36-hole golf course facility situated on the property for the regional parks department.”
At that point, employees of the El Prado golf facilities, including the operations manager, head golf professional, director of golf, the golf shop manager, café manager, marketing director and head groundskeeper, approached Heuler about assuming ownership and control over the golf operations at El Prado Regional Park from him and his fellow investors.
In the same timeframe, a local attorney, Frank Lizarraga, learned from his brother, who worked as part of the grounds-keeping crew at the El Prado courses that El Prado Golf Course Management, LLC was on the way out and that the employees there were looking to fill the void.
Initially, Lizarraga had considered and was actually representing the facility employees in their takeover bid.
In particular, Lizarraga was given to understand that the county was due to either renew the lease with the Army Corps of Engineers for the property on which the golf course was located in the summer of 2023 or otherwise make arrangements for the lease to sunset a few years hence during which interim the golf component of the park would see its operations wind down. Lizarraga also learned that there was a determination on the part of the county, if the lease were to be renewed on a long-term basis, to forge a new arrangement with a different subleasing entity to ensure the future transformation of the golfing grounds and attendant facilities.
“At that time, the lease was expiring and the county wanted us to put improvements and upgrades into the operation and its facilities,” Walter Heuler told the Sentinel. “Our partnership was showing its age, and we weren’t willing to put that kind of money into it, and so we made a decision to sell our interest and get out.”
In short order, Lizarraga, learned that Heuler was looking to cash out El Prado Golf Management, LLC’s interest in the property rather than allowing its control to elapse with the expiration of its sublease with the county in 2025.
It became clear, however that the golfing operation’s employees did not have the financial wherewithal to be able to buy out the Heuler group.
Calculating that the county was beginning to consider El Prado a white elephant and that it might elect to close out the golfing operation at El Prado altogether if the facilities there continued to deteriorate, Lizarraga believed he could take control of the courses by convincing county officials that if the park’s golfing assets were entrusted to him, he could bring about the transformation they wanted. This would involve making a convincing show that he had the intention and financial wherewithal to do just that.
One of Lizarraga’s legal clients was Phyllis Shih, for whom he had handled the governmental application and regulatory clearance issues pertaining to a warehouse her company had built in Ontario. Shih, utilizing her own capital and financing from Taiwanese and American banking institutions, has done extensive development work in Southern California, primarily in Los Angeles and Orange counties. She previously owned a golf course. Lizarraga approached her, convincing her to finance their joint venture, El Prado Development, LLC. In this regard, El Prado Development, LLC was taking a multi-pronged approach. The first prong was to wrest the sublease for the property on which the golf courses were situated from El Prado Golf Management. The second prong was to effectuate enough improvement to the facilities there to achieve the third prong, which was to convince the county that the underlying lease with the Army Corps of Engineers should be extended, and the golf course preserved. The fourth prong was to ensure that the county would then approve an extended sublease – at least 20 years and as much as 40 years – with El Prado Development, LLC.
Lizarraga and Shih, he with his political connections throughout San Bernardino County and she with her $1.2 billion in capital in the United States and an unknown amount of money in Taiwan, set their sights on taking control of the El Prado courses.
The outcome appeared preordained.
First, Heuler and his investors wanted some form of return on their 45 years of involvement with the courses, meaning a cash buy-out of their interest there, which was to come to an end with the elapsing of their five-year sublease in August 2025.
The two or so years remaining on the lease had value in two ways. First, with the onset of the COVID-19 pandemic, after an initial further erosion of golf as a pastime as a consequence of the stay-at-home orders issued by federal, state and local officials, the popularity of the sport reestablished itself when it was realized that it naturally entailed a protocol of social distancing as golfers separately made their way down the fairways and from hole to hole. By June of 2020, golf was making a comeback and in the years that followed, it regained popularity. The El Prado courses were no longer merely marginally profitable but well into the black. Moreover, Heuler had more than just a two-year lease to sell. With the operation came his liquor license, which, with a little bit of legal tweaking, could be passed along to El Prado Golf Management LLC’s successor-in-interest.
When Lizarraga set up El Prado Development in November 2022, that entity consisted of him and Shih and did not include the employees at the two El Prado golf courses, though Lizarraga and Shih had made commitments to keep those personnel employed after the takeover.
Lizarraga, on his own behalf and that of Shih, swooped in and offered Heuler a seven-figure buyout of the two years remaining on El Prado Golf Management, LLC’s sublease with the county. On February 22, 2023, Heuler reached an agreement with Lizarraga and Shih to transfer his company’s interest in the two 18-hole courses, i.e., the sublease, to El Prado Development, LLC.
In May 2023, three months before the county renewed the lease with the Army Corps of Engineers, the county board of supervisors took action to ratify an amendment to the sublease agreement it had entered into with El Prado Golf Management in March 2021, recognizing that El Prado Golf Management had made an assignment of the sublease of the El Prado Golf courses to El Prado Development, LLC, recognizing there was a change in the business ownership of the golf courses and golf facilities at El Prado Regional Park and declaring, essentially, it approved of the arrangement.
In the meantime, Lizarraga and Shih undertook some modest improvements to the El Prado facilities and formulated proposals for further improvements which extend to the course itself and all of the structures there. The work accomplished, according to Lizarraga, consisted of resurfacing and repainting the clubhouse and pro shop buildings at a cost of $65,000; replacing and upgrading the facility’s plumbing and electrical systems at a cost of $44,000; upgrading and installing wi-fi services and a camera system at a cost of $72,000; installing new sales machinery that includes automatic payment of California State sales tax for the use of the facilities at a cost of $20,000 and entering into a five-year lease for the 110 new golf carts at a cost of $585,000. Lizarraga further asserted that El Prado Development has so far spent $100,000 in payments to architects, engineers and design consultants with regard to planned improvements.
Once El Prado Development, LLC had taken possession of the remaining two years and three months of El Prado Golf Management’s, LLC’s sublease, it began pressing the county, and members of the board of supervisors in particular, to extend the sublease another 25 years come 2025.
If that eventuality were to come about, Lizarraga assured county officials, El Prado Development, LLC’s next major outlay will be expending $125,000 to resurface the parking lot. According to submissions provided to the county in 2024, El Prado Development is purposed to undertake upgrading the bar and café, banquet room and pro shop with contemporary design elements; install within the existing clubhouse a golf simulator, which is to allow players to practice and play the game year-round, regardless of weather conditions; install facilities and hire personnel to provide those using the facility with scientific swing analysis; make enhancements to the driving range, putting greens and cart paths; and develop a new outdoor site for wedding ceremonies and to serve as a special events venue.
According to El Prado Development’s proposal, there will be an intensified effort to reengage with community groups to reestablish the involvement of outside entities at the facility, as the participation of the local area’s social and service clubs has substantially diminished over the last decade or so. This effort at re-engagement will extend to, Lizarraga and Shih maintain, the City of Chino, the Chino Valley Chamber of Commerce, the Ontario Fire Department, The Ontario Police Department, the Greater Ontario Business Council, The Inland Empire Regional Chamber of Commerce, Chino High School, Ontario High School, Chino Hills High School, Ontario Christian High School and Mt. San Antonio College.
In making his pitch to the county, Lizarraga emphasized that during the time his company has had control of El Prado, the courses have maintained the largest men’s golf club in the region with over 300 members and that it also sponsors and hosts a women’s golf club and a senior golf club. In addition, Lizarraga touted the creation of a youth participation program at the courses that had taken place under his company’s watch which offers those aged 5 to 12 free golf lessons.
In applying for an extension of the sublease for 25 years until 2050, Lizarraga proposed terms in which El Prado Development guaranteed a lease payment of at least $8,000 per month or ten percent of the green fees and four percent of the alcohol sales, whichever is greater.
By that point, a number of the employees at the golf courses, including those who had been outmaneuvered by Lizarraga when he managed to purchase the lease from Heuler and his group, grew discontented, with some concerned that Lizarraga and Shih would not live up to their commitment that they would keep their positions at the courses. They approached two golfing enthusiasts who live locally, Dave Kooiman and Eric Fikse, in an effort to see if the operation could be placed into different hands pursuant to the expiration of the underlying sublease to El Prado Golf Management, Inc that had now been transferred to El Prado Development, Inc that was to expire in August 2025.
Having come onto the scene rather late, Kooiman, who lives in South Ontario, and Eric Fikse, a Chino resident, after familiarizing themselves with Lizarraga’s overtures to the county, approached county officials themselves, offering an alternative subleasing proposal, one they submitted as an unsolicited bid after being told by members of the county’s real estate services division that no bids were to be asked for and an unsolicited submission would be the only opportunity for the proposal the two were contemplating to be considered.
Kooiman and Fikse proposed a 45-year lease, one that offered a guaranteed monthly payment of $8,000 per month or ten percent of the green fees and four percent of the alcohol sales, whichever is greater, revenue to the county that was identical to what was offered by Lizarraga and Shih. They indicated they were prepared to maintain the two existing 18-hole golf courses and make additions to the golf sports facilities beyond what currently exists. Those additions included an additional “executive” short course of nine holes at which business executives during their lunch hour or families could shoot two or three holes. The executive course would also be lighted for nighttime playing. Kooiman and Fiske also proposed constructing a double deck building which would be composed of 16 teeing blocks on the ground level and 16 on the second floor from which participants could use the driving range. Kooiman’s and Fiske’s proposal also called for constructing a miniature golf course for children and families on the grounds. Just as Lizarraga and Shih had, Kooiman and Fiske proposed improvements to the clubhouse, and they proposed laying down a new parking lot.
While Kooiman’s and Fiske’s proposal made the rounds within the county recreation and real estate divisions, it did not garner a favorable reception at the level of the county’s administration or among the members of the board of supervisors. Kooiman’s and Fiske’s proposal did not make it beyond Assistant Executive Officer Chad Nottingham, who oversees several county divisions, including the county’s real estate services division, nor beyond Assistant Executive Officer Trevor Leja, whose authority extends to supervising several other county departments, including that one devoted to the county’s regional parks.
Late on February 7, 2025, after the rest of the agenda for the February 11, 2025 board of supervisors meeting had been posted, information and a staff report with regard to what was designated as Item 37 was dropped onto that agenda. That item pertained to the future subleasing of the property within Prado Regional Park, giving the board of supervisors two options. The first option involved two actions, the first of which was the making of a finding/determination “that the non-competitive negotiation of a sublease agreement with the existing tenant for the use of approximately 314.21 acres of county-leased Prado Regional Park in Chino as a 36-hole golf course… for a term expected to exceed five years and rental revenue expected to exceed $5,000 per month is in the best interests of the county, as a resulting sublease agreement would serve the public with uninterrupted outdoor park and recreation use” and the second action approving and authorizing Real Estate Services Director Terry Thompson to “negotiate on a non-competitive basis the sublease agreement terms with the existing tenant [El Prado Development, Inc] for the property described… with rental revenue expected to exceed $5,000 per month and for a term expected to exceed five years.” The second option called for authorizing Thompson “to proceed with a competitive procurement of a sublease agreement for the property described.”
At the February 11 board meeting, both Kooiman and Fikse were present to cry foul over the board’s consideration of entering into a no-bid arrangement with regard to the subleasing of the property and to importune the board to reject doing so in favor of a bid process in which they could participate. They were joined by nine others.
Kooiman said that he was told by county staff that his and Fikse’s unsolicited bid would not be processed and that the only way to get consideration for the proposal was to get the attention of the members of the board of supervisors.
“Despite repeated attempts, there was no willingness to meet with us for six months,” Kooiman said of the members of the board of supervisors.
Kooiman charged that his and Fikse’s unsolicited bid submitted to county employees was improperly passed along to El Prado Development, LLC.
“Our confidential proposal was given to the competing operator you’re planning to negotiate only with,” Kooiman said. “In return, that operator terminated the long-term employment of an individual who had decades of experience managing this very golf course and was part of the original lease negotiations with the county.”
Kooiman said the “current lease holder used their political connections to secure their current deal as a sublease. Now, the board is considering locking in a noncompetitive deal.”
Kooiman characterized El Prado Development, LLC as “a group that lacked experience and ties to the golf community. Does that sound like smart governance? Does that sound fair to the public?”
Kooiman said it took him and Fikse six months to secure a meeting with Supervisor Curt Hagman. “When we asked why this deal was not going out to bid, the justification simply did not hold up. There was no sound explanation for why the county would not seek competitive bids to ensure the best outcome for taxpayers and the long-term success of the course.”
Kooiman said “an open bid process” would “maximize taxpayer value.”
He intimated that if the matter was not open to a bid process, legal action challenging the board’s action would ensue.
Fikse said, “Negotiating with municipalities, especially when it comes to public land and taxpayer funds, requires more than just sole-source negotiating. It requires strategic decision-making. It requires a commitment to transparency, fairness and the long-term health of the community.”
Fikse then fleshed out the basis for the legal challenge that Kooiman alluded to.
“One of the pressing concerns is San Bernardino County’s lease with the Army Corps [of Engineers],” Fikse said. “It involves potential violations of the lease terms. In the lease agreement between the county and the Army Corps, it’s clear that it mandates [a] fair and open process for subleases and third-party agreements. Sole-source negotiations in this instance could violate several lease provisions. Without a competitive bid, how can the county guarantee that it is securing the best financial deal for the taxpayers, the community, the county and the Army Corps? Currently the county is suggesting a minimum lease negotiation starting at $5,000 a month, when you are currently receiving $25,000 to $30[,000 per month]. How does that make any sense?”
At the February 11 meeting, both Supervisor Hagman and San Bernardino County Chief Executive Officer Luther Snoke posited justification for bypassing the competitive bidding process in this circumstance.
Supervisor Hagman said, “Our intention on this board is to get a top rate golf course. It’s has not been ran (sic) that way. [My] reference is to the previous management as [having] really deteriorated the grounds and the structures, which are county buildings. This item today is strictly to negotiate and see if there’s a deal there, which’ll come back at a future board meeting to see what the commitment with the current lessee [is]. We do this all the time with other leases on our other parks throughout the county. We deal with our other leases. We continue on. We negotiate fair market values. We see what improvement the lease holders will put into the facilities as moving forward. If there’s a deal to be there, it can be brought back. If it’s not a deal, then we can take another course.”
Snoke said that giving El Prado Development, LLC an exclusive opportunity to negotiate on extending the lease it already has would allow it to secure the financing needed to carry out the series of improvements to the property it has committed to completing.
“This item, the way it’s structured, effectively, it would, should the board approve this… allow county staff to negotiate with the current operator,” Snoke said. “That would be we would negotiate to get a good contract for the county, one that makes investment into the facility, that would return a good rate to the county to use that for other parks uses. And that contract – should we be able to reach a point where staff and the operator agree – would then come back to the board for approval, and we would be able to talk through the details of that agreement. At this point we don’t know the details of that agreement because we have not negotiated an agreement with them.”
Snoke said, “The operator has only had two years to make an investment in this golf course. They have approached us and basically said it’s not enough time for them to commit major dollars into this because of the risk it would put them in with such a short-term lease. So, the goal is to try to extend—could we do a long-term lease that allows them to amortize and recover their costs, have a return on investment for them, and make a good investment for the county.”
According to Lizarraga, Kooiman and Fikse had either underestimated or were purposefully underrepresenting the degree of deterioration the courses had been subject to during El Prado Golf Management, LLC’s management and operation of the facilities as well as the investment and improvements El Prado Development, Inc. has made over the previous 21 months.
According to Kooiman, the improvements to the course that had taken place during El Prado Development’s tenancy on the property were limited to a clock with Phyllis Shih’s name engraved on it that had been erected and a fence around the driving range that had been constructed.
Upon Prado Development, LLC assuming the sublease, Lizarraga said, “There were significant issues with the lack of maintenance of the structures and the golf courses. The golf courses were subject to flooding because of two major drainage challenges, one of those being that the Chino Creek bed had been denuded of its vegetation and that erosion created a huge flood control problem at the north end of the Butterfield course. In addition, the previous ownership did not upgrade the original flood control system. The drainage pipes had not been touched in terms of maintenance for 40 years and were corroded and completely nonfunctional. We made substantial outlays in repairing that.”
Lizarraga continued, “During the time the prior leaseholders were in control there was virtually nothing done to maintain the structures owned by the county. The clubhouse roof leaked. So did the roof on the golf cart barn and the maintenance facility. There had been no upkeep on those buildings. I understood that the county required that they adequately maintain the golf course and its facilities, which was not done. I am sure that this did not please the county.
“If you saw the level of deterioration of the facilities on that property, you would understand why the county was not pleased with the lack of maintenance and upkeep of the golf course and its facilities,” Lizarraga went on. “It appeared to me that was the reason the county only extended the prior lease for five years. I am also aware that after the five-year lease extension went into effect [in 2020], they chose not to put money back into the golf courses and their facilities. In addition, there was minimal community involvement with our local cities and its service organizations.
“What I knew at the time was that Chino Hills, the City of Chino, Ontario would have loved to be participating in events there,” Lizarraga said. “That was part of the reason we [he and Shih] got involved. We would love to have them. We have been working on bringing the community involvement back ever since we got involved.”
Lizarraga said he and Shih could have held off until El Prado Golf Management’s lease expired this year, but that they opted to get involved much sooner and have been working toward perpetuating the lease beyond 2025 the entire time.
“The county said it would accept an assignment of the lease, and the lease would not be unreasonably withheld,” Lizarraga said, at which point he and Shih leapt into the breach.
Lizarraga stated that he was aware that the prior management of the golf course had worked there for decades, and that problems with the way things were being run were ingrained there.
“When we took on the lease, we assumed the risk,” Lizarraga said. “There was no written commitment from San Bernardino County other than their agreement to assign the lease as part of completion of the purchase and sale of the golf course.”
Moving into the role of the sublessee brought with it multiple financial burdens, Lizarraga said. “An important part of the purchase and sale [of the sublease] was that there was an existing lease agreement with the company supplying the golf carts and existing service agreements, long term service agreements on the air conditioning equipment,” he said. “Although there was old and antiquated equipment in use, we did have a few tractors, lawnmowers under long term leases.”
Lizarraga said, “In addition, making sure we had the liquor license was a large part of ensuring we would be able to make the monthly lease payments. The county gets ten percent of the green fees and four percent of all alcohol sales. The prior operator of the golf course owned the liquor license and for us to keep the beverage sales ongoing, we had to purchase the liquor license. We also had to reach an agreed-upon price for the purchase and sale of the golf course and management. I can’t tell you exactly what that price is, but I can say it was in the seven figures. The assignee of the sublease was going to be financially responsible for maintaining the entirety of the golf course operations. We fully understood that the previous operator only had two years left on the existing sublease. We did have conversations with Supervisor Curt Hagman, the department of parks and recreation and the department of real estate, and their position was for us to work on maintaining the golf course and its facilities, as well as undertaking all necessary requirements for the rejuvenation of the golf course and modernization of the facilities. Doing so would demonstrate our understanding of the necessity of bringing the golf course and its facilities up to appropriate standards upon receiving an extension of the golf course lease.
“Before the purchase was made, it was clear that portions of the golf course were being neglected because they were not being adequately irrigated,” Lizarraga said.
Within months after taking control of the golf courses, Lizarraga said, “We made investments into the irrigation and mowing equipment, which was dilapidated and in disrepair. We paid out approximately $90,000 into repairs for the irrigation system.”
Lizarraga took issue with statements made by Kooiman, Fikse and their supporters that he and Shih were golfing neophytes, who had no appreciation for the game, no experience, did not know what they were doing and were running El Prado into the ground. He, Lizarraga pointed out, had been golfing since he was in high school, as was the case with his brother, who now works at El Prado. Shih formerly owned another golf course, he said. More pointedly, he said, El Prado Development has installed Art Guevara as the director of golf and the tournament director. Guevara has a 19-year track record as a PGA golf pro and has 30 years’ experience in the golfing industry.
Lizarraga echoed what Snoke had said about a significant timeline in extending the lease, saying that in the run-up to the county’s anticipated vote to extend the sublease in April, El Prado Development is “working on getting construction financing in place, subject to the lease extension. The amortization of that debt is what makes those planned improvements possible. We proposed a 23-year [sub]lease in 2023 when the county extended the lease with the Army Corps of Engineers.”
In fact, the language contained in the sublease contract that the county is contemplating signing in April, the Sentinel has learned, runs to 2050 – a period of 25 years.
In response to Kooiman’s charge that he had used political influence to obtain the sublease for El Prado Development, Lizarraga unequivocally denied the charge. While stating that he had been practicing law in this region for over 36 and that he has gotten to know a majority of the area’s elected officials, including certain members of the board of supervisors, he denied that having such contacts disqualified him from operating the golf courses. Rather, he said, this gives him an awareness and understanding of the importance of keeping the golf course in the best condition possible. Lizarraga further stated that he rejects the suggestion that his and Shih’s involvement in and with the El Prado golf courses has involved any improper conduct or any political manipulation.
Lizarraga bristled at the Kooiman’s accusation that he and Shih had fallen behind in their sublease payments to the county.
“We have never gotten behind in our lease payments,” he said. “We are not getting anything we have not earned or are entitled to through our own hard work. We are not the recipients of political favors and there is nothing improper in my relationship with Curt Hagman. Saying that is moving toward defamation.”
After fielding questions generated by the accusations made by Kooiman and Fikse, Lizarraga went on the attack himself.
“Look at their ‘unsolicited proposal,’’’ he said. “If you look at its realistic elements, it is the same thing we have submitted to the county. The only real difference is they are asking for 45 years, and we proposed 25 years. They copied everything, right down to the numbers on the ten percent on the green fees and four percent of the alcohol sales or $8,000 per month, whichever is greater. That was the figure we used, but we are much closer to $30,000. We have the liquor license. They do not. There is no guarantee that ABC [the California Department of Alcohol and Beverage Control] would provide them with one. There is a legitimate question as to whether they could perform to the level they claim. If you take the liquor license out of their equation, they couldn’t do it.”
Lizarraga said, “As for the double deck driving range, it can’t be done. The Army Corps of Engineers will not allow anyone, them or us, to build anything beyond the existing footprint. We are going to add some office space, but that will be a second-story addition to the existing structure. “
Nor will the Army Corps of Engineers permit Kooiman, Fikse and their group to construct a new parking lot, Lizarraga said.
“The only thing we can do is maintain and improve the existing parking lot,” Lizarraga said. He added that the difficulty he and Shih have already experienced with the parking lot would have likely financially undone Kooiman and Fikse.
“That parking lot was in the worst possible condition you can imagine,” Lizarraga said. “Our insurance carrier would not extend us liability coverage because of the parking lot’s condition. We… had to go to a more at-risk liability carrier, so our premiums went up 30 percent, which cost us an added $30,000.”
He and Shih have been dogged by similar problems with the existing buildings on the property, Lizarraga said.
“We are now on our third insurance carrier because of the condition of the buildings and the parking lot,” he said. “Redressing these issues, which is a result of poor prior management, has created risk. By risk, I mean both liability risk and financial risk. The cost of the improvements to be made is tremendous.”
Lizarraga pointed out that in pursuing their proposal, Kooiman and Fikse are intent on bringing in key functionaries from Heuler’s management team, which was in control when the deterioration of the facilities that now must be redressed at a cost of millions of dollars was taking place.
“We understand that the rehabilitation of the golf courses and its facilities are a very important condition to the extension of the existing sub-lease” Lizarraga said. “We have already spent a lot of funds on a renewal of the golf cart leases. At the bare minimum, we calculate it is going to cost us another $4 million dollars just to get the golf courses, their facilities and the parking area where they should be. Those buildings are currently in terrible shape. There hasn’t been any substantive maintenance on them in many years. Currently when it rains, we have to lay out many square feet of tarp on the facilities’ roofs. We have and will undertake expending funds for the refurbishment of the golf course and its facilities.”
Furthermore, Lizarraga said, Kooiman and Fikse are out-and-out wrong with regard to the federal requirement that the county conduct a competitive bid on the sublease. He provided a copy of the Army Corps of Engineers lease with the county to the Sentinel. “The lease between the county and the Army Corp of Engineer does not require competitive bidding for an extension of an existing sub-lease,” he said.
Moreover, he said, “County Policy No. 12-05, which pertains to leasing county regional park property, lays out that there is an exception to the competitive bid process when you are dealing with an established lessee and service provider.”
Lizarraga said Kooiman and Fikse were misleading the public and the county by suggesting that he and Shih were getting some kind of free ride from the county by not engaging in competitive bidding. The opposite was the case, he insisted, stating that he and Shih have demonstrated good faith through their investment in the golf course and its facilities so far, as well as their commitment to undertake millions of dollars’ worth of improvements to bring the golf courses and their facilities up to current standards.
Upon getting the sublease extension, Lizarraga vowed, it would be full speed ahead on the transformation of the El Prado golf courses.
“We will start within months,” he said. “Right now, we have financing in place to do the current work and the only thing we are waiting on is a long-term lease to get approval so we can begin the modernization of both the facilities and the golf courses.”
Kooiman said Lizarraga’s “side of the story… should not be printed, nor is it relevant to the real issue here.” What is relevant, he said, is that “Frank acted as a liaison between the old group [El Prado Golf Management, LLC] and the county, and ended up becoming the owner of the short-term sublease,” which he characterized as an abuse of his liaison role. Kooiman said that while serving in the liaison role, Lizarraga had convinced Heuler that the county was demanding millions and millions of dollars in improvements to the golfing facilities be carried out, which induced Heuler to sell out to Lizarraga and Shih.
Lizarraga’s citation of Shih’s former ownership of a golf course in justifying the county’s exclusive deal with El Prado Development is misleading, Kooiman said, and masks that Shih “sued the city of Corona to get rid of the golf course she took possession of, and built homes there.”
Kooiman took issue with Lizarraga referencing the limited repair work done on the golf operation facilities as well as the inclusion of the lease on the golf carts as part of those improvements, since those are part of the golfing operation that generate revenue. He derided the painting of the building at the El Prado courses as “putting lipstick on the clubhouse.”
“That they have maintained modest maintenance requirements to the El Prado facilities and have formulated proposals for further improvements which extend to the course itself and all of the structures there to me is irrelevant as to the point that there should be fair competition,” Kooiman said. “Not all of these repairs were necessary for golfers nor required by the county.”
Lizarraga’s assertion that El Prado Development’s investment in purchasing the remaining time on the sublease and the liquor license from El Prado Golf Management in 2023 justifies dispensing with a competitive bid on the sublease going forward in 2025 is another irrelevancy, Kooiman insisted. El Prado Development, LLC is not experiencing financial hardship, he said.
“The courses profit roughly $150,000 per month,” he said. “Even with their [Lizarraga’s and Shih’s] seven figure purchase, rumored to be exactly $1,000,000, they were able to get their money back in six months. That means by January of 2024, they were breaking even. If they profited $150,000 per month in 2024, that would be $1,800.000.”
Kooiman acknowledged that the unsolicited proposal he and Fikse provided to the county missed the mark in that it contained contemplated improvements that could not be carried out because of the Army Corps of Engineers’ restrictions on development on the property. He said that had occurred because the county was not conducting an open bidding process in which the parameters of the competition and nature of the terms of the lease were clearly and explicitly spelled out.
Kooiman stopped short of crossing swords with Lizarraga, an attorney, regarding the legality and/or legal issues pertaining to bypassing the competitive bid process for the sublease. Instead, he and Fikse hired William H. Ihrke of the law firm of Rutan and Tucker to speak for them and the entity they have formed, called Decoy Properties, LLC, to present their unsolicited proposal to the county, which, after adjustments, they want to submit as a formal entry in the competitive bid process for the sublease they are pressing the county to engage in.
In a letter dated February 21 to Cheryl Connett of the U.S. Army Corps of Engineers, Ihrke wrote, “Our office is aware the county has not entertained other vendors since Decoy reached out in an attempt to bid on the sublease. Without a competitive bidding process, the county is giving a third party an undue economic advantage which may prevent the public from accessing potentially better prices. Further, the county issued a letter of intent to the current vendor, describing it as a framework for negotiations; however, this appears to be a signal of commitment to a specific party without the county conducting any due diligence.”
In his letter, Ihrke implied that giving El Prado Development the exclusive opportunity to claim the sublease was a violation of the Army Corps of Engineers terms with regard to the overarching lease and federal law.
Ihrke cited language in the lease document which he said prohibited the county from giving one entity an exclusive opportunity to enter into a sublease of the property or a portion thereof. He wrote, “Pursuant to the lease agreement [between the Army Corps of Engineers and the county for the 2,287.7-acres upon which El Prado Regional Park is situated], ‘The lessee will not allow any third party activities with a rental to the lessee or prices to the public which would give the third party an undue economic advantage or circumvent the intent of the development plan.’ The county responded to media inquiries regarding competitive bidding of the sublease, stating that it has engaged in preliminary discussions with the existing operator as part of its due diligence. The county has not entertained discussions with other vendors regarding the lease agreement.”
Kooiman reiterated his earlier statements calling for the sublease to go out to bid.
“Awarding the lease without the use of competitive bidding risks misuse of public funds and limits fair competition among vendors,” he said. “Without a competitive bid process, the county is giving a third party an undue economic advantage. Further, the county issued a letter of intent to the current vendor, describing it as a framework for negotiations; however, this appears to be a signal of commitment to a specific party without the county conducting any due diligence.”
Kooiman pointed out that open competitive bidding is a time-honored manner of governmental operations and is mandated by law in California. He questioned the rationale for the county suspending its own requirements relating to competitive bidding on arrangements with the private sector. Vectoring his questions toward the county’s ultimate decision-makers, the board of supervisors, he asked, “Why? Why don’t more parties get opportunities? Why don’t you create fair competition? Why do you need to make an exception to board policy? Why not just operate according to the policy? We deal with our other leases. We continue on. We negotiate fair market values. Is this the best way to negotiate fair market value, with one party? Since when is sole-sourced bidding better for the taxpayer? Why do you need to circumvent public policy when it’s not better for the taxpayer?”
Lizarraga said, “The county’s position to extend the existing sub-lease without going out to competitive bidding is supported by existing county policies and the ability with the existing sub-lessee to timely substantially improve El Prado golf courses and its existing facilities.”
According to the county’s official spokesman, David Wert, the rollover of the lease to El Prado Development, Inc is not a done deal, at least yet.
“The county has not decided on a sole-source approach,” Wert said. “The county is simply talking with the current leaseholder to determine by April 29 if it would best serve the public to recommend to the board of supervisors continuing with the current leaseholder or putting the lease out for bid.”