Defying spirited calls that it carry out a competitive bid in which the prevailing company would get the privilege of running the El Prado Golf Course going forward, the San Bernardino County Board of Supervisors on Tuesday, April 29 voted to perpetuate the county’s sublease of the U.S. Army Corps of Engineers with the golf course’s current operator for the next 22 years.
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. 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. From 1999 until 2000, the original participants in the El Prado Golf Course Management, LLC made a gradual hand-off of the golfing operations at El Prado to another generation of medical professionals, who were headed by Heuler’s son, Walter Heuler. In 2014, El Prado Golf Course Management, LLC undertook talks with the county about exercising an option to renew the sublease for another 40 years, but the county, contemplating potential future options for the property that went beyond utilizing it as a golf course, renewed the sublease for five years only.
By 2019, Walter Heuler was 70 years old and 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. 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. Upon the expiration of the lease on August 31, 2020, no action to renew it had been taken and 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 backdated to September 1, 2020 and running through to August 31, 2025. 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, whose brother worked as part of the grounds-keeping crew at the El Prado courses, came in to represent the facility employees in their takeover bid.
Lizarraga learned, as a consequence of his representation of the golfing operation employees, that there was dissatisfaction on the part of the county with regard to the condition of the golf course and its facilities and that the county was determined, if the golfing use at the park was to be perpetuated and a sublease on a long-term basis was to be entered into, that a new arrangement be made with a different subleasing entity that would be more diligent about maintaining the golfing facilities and country club than El Prado Golf Course Management, LLC had been.
With that advantage, he interested Phyllis Shih, a Taiwanese billionaire with multiple holdings in Los Angeles, Orange, Riverside and San Bernardino Counties, including “The Rincon” retail center in Chino Hills, in partnering with him in order to succeed El Prado Golf Course Management, LLC in becoming the golf course’s operator. Having represented Shih in the development of warehousing in Ontario, Lizarraga, a Chino native who had built contacts among San Bernardino County’s movers and shakers during a 35-year career as an attorney in Ontario during which he had represented some of the areas most influential and established politicians, was able to use his gravitas, Shih’s wealth, the consideration that Shih had once owned a golf course in Corona and his brother’s professional experience and expertise in maintaining golf courses in his dialogue with regard to the future of the Prado golf courses with the county.
With Shih, Lizarraga founded El Prado Golf Course LLC in the fall of 2022. Using it, he and Shih swooped in and in May 2023, acquired the sublease for the golf course properties located at 6555 Pine Avenue in Chino, buying out Heuler, his partners and Prado Golf Course Management, LLC for a reported $1 million. That purchase, at least on paper, entitled Lizarraga and Shih to nothing more than control of the golf courses and their operation for two years and three months, after the passage of which, the sublease would expire.
There is some level of disagreement between parties intensely interested in the El Prado Golf Course and its future as to what has happened since May 2023. What is known is that Lizarraga and Shih inherited a gof course with facilities that had been dilapidating and neglected for some time. Also undisputed is that the new entity, El Prado Golf Course LLC, for a time kept the operational staff formerly employed by El Prado Golf Course Management, LLC in place and began what were modest but visible renovations, which included leasing new and spiffy golf carts. By 2024, El Prado Golf Course LLC parted company with Kevin Knutson, who had been General Manager of the two courses under Prado Golf Course Management, LLC and Heuler since 2015. From that point on, different points of view dictate the differing versions of events.
Knutson, together with two golfing aficionados, Dave Kooiman and Eric Fikse, believed that the neglect of the golf courses and its facilities that had taken place during the previous fifteen years when Heuler and El Prado Golf Course Management, LLC had discontinued plowing a good percentage of the profits of the operation back into the courses and their accompanying structures was insulting to that element of the community that took the sport of golf seriously and reflected a lack of pride in a valuable asset. They wanted, they said, to ensure that the El Prado Golf Courses were not run merely for a profit, but in a way that promoted the sport of golf as a culture, indeed, as one of the central elements to a way of life. Lizarraga and Shih, they contended, were not sufficiently committed to undoing the neglect of the El Prado Golf Courses, were not demonstrating, through repair or replacement of the deteriorating features of the golf facilities that they appreciated the privilege they had been granted nor that they merited be entrusted with virtual ownership of the golf courses in the decades that would follow the elapsing of the current sublease in August 2025. In the summer of 2024, they began importuning county staff, in particular, the department of real estate services and its director, Terry Thompson, to arrange an open bidding process for the post-August 2025 sublease of the golf course property. They also began an effort to meet, face-to-face, with those who would ultimately make a decision about whether to simply roll the sublease with El Prado Golf Course LLC over or to hold the bid competition, those being the members of the board of supervisors.
Meanwhile, Lizarraga was gradually becoming aware that Kooiman, Fikse and Knutson were mounting a campaign to prevent El Prado Golf Course LLC from simply perpetuating the sublease arrangement come 2025. His best prospect from thwarting that lay with the entree he had with Curt Hagman, San Bernardino County’s Fourth District supervisor.
20,105-square mile San Bernardino County is a jurisdiction essentially divided into five fiefdoms, those being the five supervisorial districts. Generally, with only a few exceptions, decisions impacting a specific supervisorial district in San Bernardino County are made by that district’s supervisor. When a vote with regard to that decision being implement is made by the entire board of supervisors, in general the four supervisors outside the district which that action is to impact defer to the wisdom and judgment of the supervisor in whose district the action is to take place or where it is most impactful. This arrangement has traditionally existed because it is reciprocated right down the line with all five supervisors. By cooperating in this arrangement and granting all four of his or her colleagues support for what they are doing in their districts, a supervisor essentially ensures that when he wants something done a certain way in his or her district, the other other for will go along unquestioningly.
Lizarraga’s vaunted status in San Bernardino County’s Fourth District, which includes the cities of Chino Hills, Chino, Montclair, Ontario and southern Upland as well as the Carbon Canyon, Velano, Yorba, West End, Prado, Narod, Ballou, Racimo and Guasti sections or neighborhoods, predated Hagman’s 2014 election as Fourth District supervisor. He was representing companies and individuals of prominence in several of those cities going back at least to the late 1980s and was for a time a member of the Ontario Planning Commission. When Hagman was sued by J.P. Morgan Chase Bank of North America, Lizarraga represented him in that litigation and when Hagman’s second wife, Danielle Madrigal, founded a company, MakRose, LLC, Lizarraga represented her with regard to the filings relating to its registration and establishment and other legal issues.
It was Lizarraga’s contention that El Prado Golf Course LLC sank money into redressing problematic issues at the golf courses and its facilities, including corroded and nonfunctional pipes that had left the links and greens subject to flooding, a leaking clubhouse roof, and deterioration of the parking lot. Those improvements, while necessary and expensive, were not readily apparent, Lizarraga maintained.
Kooiman, who emerged as the spokesman for the group seeking a competitive bid process, disputed that El Prado Golf Course LLC had gone to any extensive expense in terms of maintenance, and that it had done nothing to improve or enhance the golfing component of the operation. Moreover, he asserted, whatever maintenance that was required to keep the golf facilities functional was simply the cost of doing business, and the profit Lizarraga and Shih derived from the golfing operations exceeded, considerably, those costs.
From the perspective of El Prado Golf Course LLC, making investments in improving the golfer’s experience on the links and greens in the short two-year-and-three-month window while it was filling the role as the inheritor of El Prado Golf Management, LLC’s lease did not make any business sense, since that lease was going to expire in August 2025, and there was no guarantee that it would get an extension of the lease.
Kooiman asserted that El Prado Golf Course LLC’s failure to enhance the golfing experience for the courses’ users during that two-year-plus period was grounds to carry out a competitive bid, and give an entity such as his own or another golf course management/operation company an opportunity to offer an alternative.
Meanwhile, Hagman refused to meet with Kooiman, Fikse and Knutson to here there pitch, though staff with the county’s department of real estate services, including Thompson, were indicating that they believed the county would be able to obtain the best deal for the continuation of the golf courses at Prado by conducting a competitive bid for the sublease beyond August 2025.
Those in favor of simply rolling El Prado Golf Course LLC lease over indicated that they believed the fabulously wealthy Shih had the financial wherewithal to transform a nice golf course into a world class amenity and that she would, simply as a matter of personal pride and to enhance her image, do so. Those calling for an open bidding process remarked that since Shih had not taken the opportunity already given her through her and Lizarraga’s acquisition of the sublease in 2023 to do just that, it was foolish to believe she would ever make bankrolling improvements to the golf courses a priority.
In February, the board of supervisors voted 4-to-1, with First District County Supervisor Paul Cook dissenting, to engage in exclusive negotiations relating to the lease extension with El Prado Golf Course LLC, with the proviso that a deal be closed by April 29, at which point the board would have the option of accepting what had been negotiated or vote to conduct a competitive bid for the sublease.
Kooiman, Fikse and Knutson at that point upped their lobbying effort, obtaining audiences with both Second District Supervisor Jesse Armendarez and Third District Supervisor/Board Chairwoman Dawn Rowe. Kooiman stated that during those meetings both Armendarez and Rowe indicated that they appreciated being educated with regard to the greater range of options that Kooiman, Fikse and Knutson and possibly other golf facility operators might provide the county and that both seemed to be leaning in favor of conducting an open bid for the sublease rather than accepting a sole source arrangement for management of the El Prado golf courses. Behind the scenes, however, the Sentinel is informed, it was made clear to Thompson that if he were to defy Hagman’s wishes and recommend that a competitive bid for the sublease be carried out and thereby provide the basis for the board of supervisors deviating from its standard practice of complying with the preference of that supervisor in whose district the decision to be voted upon impacted directly, he would be in short order terminated.
Thompson prepared a report with regard to the sublease of the flood control property being utilized as golf courses at Prado Regional Park in which he recommended two options. The first option called for extending the lease for 22 years until August 31, 2047 with El Prado Golf Course LLC the county to start a minimum of $11,000 increasing 4 percent annually. The second option called for carrying out a competitive bid.
Public Contract Code §10340 and County Policy No. 12-05 calls for the use of competitive procedures in leasing real party, unless an exception to the policy or an alternative procedure is approved by the board by at least four of its members.
On February 11, nine residents of the county had joined with Kooiman and Fikse in requesting that the county carry out a competitive bid on the property sublease. This week, Kooiman, Fikse and Knutson, perhaps mistakenly believing that either Rowe or Armendarez or both would join with Cook in opposing the sublease rollover him, did not replicate a turnout of their supporters that had occurred on February. Kooiman made what he hoped would be a persuasive appeal to the board.
Kooiman said the board in deciding this issue had a simple choice between right and wrong. “When something doesn’t feel right, we’re supposed to speak up,” he said. “Supervisor Cook, I want to thank you. On February 11, you recognized that something didn’t feel right, and you said it clearly: ‘If we’re going to adjudicate this golf course, I want to make sure we do it right.’ You voted no. You listened. That matters. So, thank you. Since that day, more information on has come out and, frankly, the smell hasn’t gotten any better. The phrase ‘Something smells’ has come up again and again at our meetings with other supervisors. To supervisors Rowe Baca and Armendarez, thank you for meeting with us, asking thoughtful questions and listening. Not only to Eric and I’s concerns, but to those of the taxpayers. Supervisor Hagman, we tried to meet with you. We wanted to address your comment at our first meeting in January, when you said you had only met the current operator a couple times. We now know this isn’t true. So, today, we’re asking you to do the right thing. Remove yourself from the February 11 vote. Without your vote, that motion fails. This conversation wouldn’t even be happening to day if the lease had gone out to bid like it should have. Also, please recuse yourself from any future votes involving your personal attorney and friend, the same individual you appointed to a county position just before he secured two noncompetitive land deals. We’ve heard your explanation: ‘The county does this all the time.’ But based on our conversations with the other supervisors, that’s simply not the case in their districts. So today, we respectfully ask the board: Choose integrity. Choose transparency. Vote for option two. Let the county’s real estate professionals and [the] parks and rec[reation department] do their job, and let’s put the lease out to bid.”
Lizarraga addressed the board. “I want to thank you all for approving and adopting on February 11 of this year the resolution pursuant to County Policy 12-05, which precluded moving forward with an RFP [request for proposals, i.e., a bidding process], and had Terry Thompson, the director of real estate services department negotiate the terms of the extension of the existing sublease agreement. As the board knows, Policy 12-05 has existed for a number of years as to county regional parkland, such as El Prado golf courses. This policy exists pursuant to the extreme importance of continuity in continuing with an existing subleasee and very importantly serving the financial interests of the county. Just as important is the fact that the land in which El Prado Golf Course resides and exists on is the subject of a lease between the county and the Army Corps of Engineers. Terry Thompson and staff has done a very thorough and complete assessment of the terms for continuing the sublease agreement with us for the benefit of the county. Those terms have been agreed [to] by us pursuant to the letter of intent as expressed by Terry Thompson, and I do understand that those terms have also been agreed upon by the Army Corps of Engineers. While it has been the board’s understanding and approval on February 11 as to not proceeding with an RFP, doing so would have dire and significant negative financial consequences to the county as to the continued operations of the golf course. And as this board and county staff is aware of, the monthly lease payments are primarily predicated on the revenue that the golf course generates, and the revenue is predicated in the private assets of the golf course that we acquired from the prior ownership. Those assets are primarily the liquor license, the brand new golf carts we had to acquire, 110 of them, all the existing golf course maintenance equipment for 36 holes and all the inventory, food and beverage, pro shop, golf and driving range equipment. We also have another very serious issue to resolve. Because the prior management failed to utterly upgrade and maintain the facilities, including the 5-acre parking lot, we will lose our insurance policy on July 1 because of the quality and condition of the parking lot. We have set aside currently $600,000 to repair and renovate upon approval by the county of the extension lease agreement. We also, as pointed out, have set aside approximately $4 million to the upgrades.
Lizarraga and El Prado Golf Course LLC were supported by Lizarraga’s brother Richard, as well as Danny Ortiz, president of the El Prado Men’s Club; Julia Cabrera of the Chino Valley Chamber of Commerce Legislative Advocacy Committee; Edward Ornelas, the president of the Inland Empire Chamber of Commerce; and Peggy Hazlett, President and CEO of the Greater Ontario Business Council, who offered their opinion that the courses had improved under El Prado Golf Course LLC’s management.
Without his brother’s intervention, Richard Lizarraga said, “this place might not have stayed afloat.”
“It’s been a great working relationship from the start,” Ornelas said.
“We have seen a dramatic change, not only in the condition of the golf course, but in the relationship between course leadership and our club,” said Ortiz.
“It is important to recognize and support El Prado’s ownership for their proactive efforts to engage with the chamber and the broader community,” said Carbera.
“As a golfer,” said. Hazlett, “I’ll tell you I was impressed with the changes they made to the facility.”
If Kooiman, Fikse and Knutson thought that Thompson Rowe and Armendarez were going to be sympathetic to their challenge of El Prado Golf Course LLC, they were mightily disappointed.
Thompson did not repeat in public what he had been saying in private, which was that he believed his political masters were making a mistake in not seeking to get a better deal all the way around by going out to bid. Instead, in compliance with an order that had been imposed on him from above, starting with Hagman, running through three of the four other members of the board of supervisors and County Chief Executive Officer Luther Snoke’s office, he essentially endorsed simply extending the sublease. Thompson said revenue that El Prado Golf Course LLC would be passing through to the county, a minimum of $11,000 per month to start, was in line with what the county should expect to get in return for subleasing the property, according to an independent analysis carried out by a Avison Young, a broker tasked with determining the value of a long-term market lease deal for the golf course property.
Rowe offered her perspective that Lizarraga and Shih should be given a shot at making a profit so that they could reinvest a part of their returns in the golf course. That could only be done with a sublease lasting longer than the two years El Prado Golf Course, LLC has already had, she said.
“In order for there to be a sizable investment, you do have to guarantee the leaseholder a sizable amount of time,” Rowe said.
She rejected Kooiman’s suggestion that there was something underhanded about the way the county was denying those who wanted to bid on the sublease a chance to do so.
“We’ve heard from some folks that we haven’t been transparent,” Rowe said. “To me, it seems like we’ve been more than transparent by printing the terms of the lease in the board item today.”
Armendarez said that Rowe “made some very valid points when it comes to investing and reinvesting into something and being able to work through that and give the opportunity for the [sub]leasee to actually invest in this.”
He said by negotiating with El Prado Golf Course, LLC, the county was “making sure that we are getting a good value. And it sounds like we are. We’re getting the fair market value that should have been generated. I think this is a good deal for the county.”
Hagman said, “This is my district and what I want to say is this is not unusual. We have had many of our park vendors. One is Calico, Ghost Town, Live Nation at Devore and other places where we go in. And the problem with the short term leases is – you see this at Chino Airport and other county assets – when the lease comes to end the current lease or doesn’t invest into the upkeep of the facilities and we usually inherit back something that’s not the standards that we would like as the county. So we do this quite often. We go tell the staff, hey, is there a current market rate deal? We’re not here to do anything besides provide recreation activities on our parks for our residents.”
Cook said he wanted to have a vote on the merits of one competitor’s proposal against another.
“Shouldn’t we have a ballot?” he asked.
“That’s what we’re here for,” Rowe responded.
“Well, I want a ballot,” Cook said. “Right now, I’m still very uncomfortable with it.”
The board then voted to extend the arrangement with El Prado Golf Course, LLC for 22 years, with Cook dissenting.