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By Mark Gutglueck
The Administrative Hearing Office of the State Water Resources Control Board today concluded its first week of hearings meant to address whether a proposed cease-and-desist order issued to BlueTriton Brands, Inc. relating to that company’s drafting of water from the San Bernardino National Forest’s Strawberry Canyon at the approximate 5,200-foot to 5,600-foot elevation in the San Bernardino Mountains should be finalized.
In March 2021, One Rock Capital Partners, LLC in partnership with Metropoulos & Company formed Triton Water Holdings, Inc. to purchase Nestlé Waters North America, Inc. in a leveraged buyout involving corporate cash, loans, high-yield and high-risk bonds and unknown investors.
The buyout from Nestlé S.A., a food and drink processing conglomerate headquartered in Vevey, Switzerland, included Arrowhead® Brand Mountain Spring Water along with other water bottling operations in the U.S. and Canada, with the exception of Nestlé Waters North America’s Perrier division. One Rock Capital Partners, LLC and Metropoulos & Company rechristened Nestlé Waters North America, Inc. as BlueTriton Brands, Inc. Obtained in the purchase were Poland Spring® Brand 100% Natural Spring Water, Deer Park® Brand 100% Natural Spring Water, Ozarka® Brand 100% Natural Spring Water, Ice Mountain® Brand 100% Natural Spring Water, Zephyrhills® Brand 100% Natural Spring Water, Arrowhead® Brand Mountain Spring Water, Pure Life® and Splash.
Arrowhead Mountain Spring Water had been obtained by Nestlé Waters North America, Inc. as a consequence of Nestlé’s 1991 acquisition of Perrier, which came amidst some confusion about the chain of title to Arrowhead, which was included within the portfolios of otherwise non-existent entities, shell companies or distributorships such as the Arrowhead Water Corporation and Great Spring Waters. Perrier had acquired Arrowhead from the BCI-Arrowhead Drinking Water Company, a division of Beatrice Foods, in 1987.
There had been several companies bottling water under brands incorporating the Arrowhead name, some going back to the first decade of the 20th Century. Names used over the years included Arrowhead, Puritas, Arrowhead and Puritas, Arrowhead Puritas, Arrowhead Spring Water and Arrowhead Mountain Spring Water among them, all under the aegises of the Arrowhead Hot Springs Company, Arrowhead Springs Corporation, Arrowhead Water Corp, Arrowhead Mountain Spring Water Company, Coca-Cola Bottling of Los Angeles, Rheem, and California Consolidated Water Company. The pre-1930 bottling operations had drawn water from a source near the privately-owned historic Arrowhead Hotel as well as from Arrowhead Springs on the east side of Arrowhead Mountain and in Coldwater Canyon at a level below the National Forest, which was established higher up in the San Bernardino Mountains in 1893. The springs were said to come from rock bank fissures and crevices that fed Coldwater Creek where the water was first collected for the hotel and bottling activity.
In 1929, the California Consolidated Waters Company was formed and purchased the Arrowhead Water bottling operation from the Arrowhead Springs Hotel. The purchase merged three Los Angeles-based companies that bottled and distributed “Arrowhead Water,” “Puritas Water” and “Liquid Steam.” The property, bottling operations, water distribution and administration of Arrowhead Springs Company, Arrowhead Puritas and the water bottling division of Merchants Ice and Storage were all administered by California Consolidated Waters Company, which was owned by the California Consumers Company. Soon after, California Consolidated Waters, on the basis of a single pipeline permit that was not based on any water rights and without having obtained a diversion permit, in August 1930 started diverting spring water from a single “bedrock crevice” spring in the San Bernardino National Forest along Strawberry Creek at an elevation of 5,600 feet. Subsequently, in 1933 and 1934, the company put in place tunnels, ultimately accompanied by holes and horizontal wells at or near the headwaters of Strawberry Creek in Strawberry Canyon. Strawberry Creek was noted in maps and springs studies prior to diversion to be a perennial stream which was fed by abundant flowing headwaters springs.
It was the seller Arrowhead Springs Corporation, not the United States Forest Service nor the State Water Resources Board, that granted California Consolidated Waters Co. the unwarranted right to develop the springs and divert the water from the Strawberry Creek headwaters. By 1934, California Consolidated Waters, had developed three springs using adits – horizontal passages bored into rock for drainage purposes – and then added 10 horizontal borehole wells to tap spring water aquifers in the mountainside, thereby diverting the forest spring water through a pipeline down the mountain, giving twenty percent to half of the water thus obtained to the hotel and then bottling and selling the rest. This unauthorized twenty percent giveaway to the Arrowhead Springs owners is still going on today.
While water withdrawal diversions can take place on National Forest land, all water diversions must be authorized by the State Water Resource Control Board, and a valid water right is required. The San Bernardino Forest reserved the water resources within it upon its founding in 1893. Valid claims preexisting 1893 were required in order to legally draft water from the forest after its establishment as a national forest. Federal reserve rights and the authority of the overlaying landowner are applicable to such situations where groundwater rights are at stake, and the appropriation of water rights through adverse possession or unauthorized use, known as prescriptive rights, is not applicable to U.S. Forest lands. The use of surplus water above forest reservation needs might be authorized if the user possesses a valid water right, but given the arid nature and drought in Southern California it would appear there would no basis to declare forest water “surplus.”
The tunnels, boreholes and horizontal wells established in Strawberry Canyon were not in place at the time of the founding of the San Bernardino National Forest on February 25, 1893. Nor were they put in place pre-1914, as Nestlé once claimed without substantiation.
In California, water rights obtained prior to 1914 are given special status as a “pre-1914 appropriative water right.” A water user with a pre-1914 right, on non-federal land, needs no water right permit unless the use of the water increases beyond the amount of water used prior to 1914, in which case the user must obtain a permit for the new amount unless it can be established that there was a plan in place before 1914 to use the additional water after 1914.
The historic record shows the tunnels, boreholes and horizontal wells at the higher elevation of 5,600 were established no earlier than August 1930, which in any event were located on federal land where no water rights could be established.
Arrowhead Puritas, the corporate predecessor to BCI-Arrowhead, Beatrice Foods, Perrier, Nestlé and now BlueTriton Brands, held and hold no valid water rights to the water being drawn from Strawberry Canyon, as is now asserted by BlueTriton Brands. Although, BlueTriton Brands claims a pre-1914 water right for its water withdrawals, no predecessor interest had a pre-1914 water right in the Strawberry Creek headwaters on the public forest lands. Any possible pre-1914 water rights were on the private lands of the Arrowhead Springs property, at Arrowhead Springs or in Coldwater Canyon, all outside the national forest. Those water rights were either not transferred upon sale or deeded back to the Arrowhead Springs property owner during the 1930s.
The Arrowhead Hotel property was leased to the U.S. government in 1920 to 1924 as a sanitarium for gassed and shell-shocked WW I veterans. Thereafter, in late 1924, the government returned the hotel to the Arrowhead Springs Company. From 1915 onward and into the 1920s Strawberry Creek was stocked with trout for recreational fishing and was a noted trout fishing stream on the 1915 American Auto Club 101 Mile Drive on the Rim of the World map.
The Arrowhead Springs hotel had sustained significant damage from the government lease and needed extensive renovation. Plans for expansion and renovation were made. During the government lease Arrowhead maintained the rights to water for bottling. Ads for this product circulating at that time show the water came from Indian Springs near the landmark Arrowhead. In 1925, The Arrowhead Head Springs Hotel and water bottling operation was sold to a hotel conglomerate which then used “61/2% Gold Bonds” to finance renovation efforts using the hotel property and bottling operations as collateral for the bonds that would come due in 1929. In 1928, Charles Anthony, general manager of the bottling operation and vice president of Arrowhead Springs Corp., acting president of the Arrowhead Springs resort property and Arrowhead Springs Corporation in the 1920s and 1930s, entered into talks with California Consumers Co., parent of California Consolidated Waters Co., founded in February 1929, regarding the sale of the Arrowhead water bottling operations. Anthony was to be paid a commission of $100,000 to execute the deal. Arrowhead was to provide a warranty title of water rights. Former Arrowhead Springs attorney and former California Assemblyman Byron Waters wrote a letter about the “water rights.” In the February 14, 1929 letter from the 79-year-old attorney, who represented himself as a sixty-year resident familiar with the San Bernardino Valley and the legal representative for the Arrowhead Hot Springs property, Waters, in typical lawyerly fashion described the water rights to be sold in the deal with the words “belonging to the company.” The letter, asserting the company’s ownership without providing any documentary proof to that effect, indicates that the 1929 “Indian Springs tunnels” located on adjacent forest lands as “whatever rights and interests Arrowhead Springs Corporation owns and possess[es] in waters flowing from Indian Springs.” A 1929 survey and Waters’ letter’s legal description show this referenced “Indian Springs” was in Waterman Canyon on adjacent forest lands. The 1929 warranty title insurance policy accompanying the sale states exclusions on U.S. and state reservations and restrictions on occupancy of these lands which would have excluded any possible operations on 1929 “Indian Springs” or in Strawberry Canyon. The filed accompanying warranty deed excluded all water from surface streams and hot springs. In August 1930, California Consolidated Waters Co. filed a deed that says false and fraudulent claims were made regarding the water and nature of water rights represented by Arrowhead Springs Corp employees in the sale of the water bottling operation, but that a new agreement to correct errors was made. In this agreement Arrowhead Springs, not the United States Forest Service or State Water Resources Control Board, granted unwarranted rights and authority for California Consolidated Water Co. to extract water from springs in Strawberry Canyon and build a pipeline to the hotel property and give the Arrowhead Springs ownership half of the water from the Strawberry Creek’s headwaters springs. In return California Consolidated Water Company deeded back to the Arrowhead Springs owners any possible pre-1914 water rights. Again, Arrowhead Springs Corporation sold water rights on public forest lands it did not own. According to the ‘Nemo dat quod non habet’ legal principle, an individual cannot sell what he does not own, and any such transaction invalidates the legal title of the purchaser.
In 1931, the Del Rosa Mutual Water Company, an appropriator of water on East Twin Creek downstream of the Arrowhead Springs Hotel (and downstream of the confluence of Strawberry Creek and East Twin Creek), filed a lawsuit to enjoin the taking of any water either by Arrowhead Springs Corporation or California Consolidated Water Company from East Twin Creek or Strawberry Creek.
The Del Rosa suit did not involve the San Bernardino National Forest nor the State of California. A finding in that case was that neither Arrowhead Springs Corp nor California Consumers Co. had previous water rights.
Federal property is excluded in adverse possession claims. Thus, Strawberry Canyon and any water originating there could not be obtained via adverse possession prescriptive rights. Today BlueTriton claims it has rights because the Del Rosa suit granted one of its corporate predecessor’s water rights on federal land. The BlueTriton Corporation, during the current administrative hearing, acknowledged the San Bernardino National Forest, as the overlaying landowner of Strawberry Canyon, held the rights to water being extracted there for BlueTriton’s bottling purposes. This, by extension, was a recognition that Charles Anthony sold a bottling operation with no valid water rights in the National Forest to California Consolidated Waters Company as he collected a hefty commission and paid off Arrowhead Springs Corp’s bond obligations. Arrowheads’ Strawberry Canyon water rights were never verified. Nor, however, were those rights ever challenged, and for decades, the United States Forest Service, acting on the assumption that precedent diversions of water from Strawberry Creek were based on legal grounds and some order of water rights possession, simply allowed Arrowhead’s operation to proceed under the aegis of a pipeline special use permit since 1930.
In 2015, Nestlé Waters of North America was challenged in federal court for operating on an expired pipeline permit in the San Bernardino National Forest. Soon after complaints were filled with State Water Resource Control Board to investigate the validity of Nestle’s water rights in Strawberry Canyon. The original 1978 permit was issued to Arrowhead Puritas, then under the ownership of Beatrice Foods, in 1978 for a pipeline conveyance system permit involving water drafting in Strawberry Canyon for a standard fee of $524. The permit granted no water rights and required valid claims. Under the ownership of Beatrice Foods, Arrowhead Puritas had morphed into the BCI-Arrowhead Drinking Water Company. When the Arrowhead Puritas water drafting permit in Strawberry Canyon expired, the BCI-Arrowhead Drinking Water Company applied to extend the permit. In 1987, while that application was still pending, Perrier purchased the BCI-Arrowhead Drinking Water Company. Later the name “Arrowhead Mountain Spring Water Company” was handwritten on the permit. The name “Arrowhead Mountain Spring Water Company” is not in BlueTriton’s chain of title. Nevertheless, it was used during the 1990s in United States Forest Service correspondence, including on invoices and in spring site records for the water pipeline system in Strawberry Canyon. At that time, newspaper articles show the company using that name was bottling and shipping Arrowhead water to Japan. This was water extracted from public land – Strawberry Canyon in the San Bernardino National Forest. The diversion of that water left a parched and dewatered forest canyon below, which burnt in the “Old Fire” in 2003.
The water pipeline conveyance extraction special use permit renewal process entailed a U.S. Forest Service review of the water drafting arrangement and its environmental/ecological impact, which in the late 1980s and 1990s the U.S. Forest Service did not have the immediately available resources to carry out. In a gesture of compromise, Perrier was allowed, pending the eventual U.S. Forest Service review, to continue to operate in Strawberry Canyon by simply continuing to pay the $524-per year fee to perpetuate the water extraction under the terms of the expired permit. In 1992, when Nestlé acquired the Arrowhead brand bottling operations from Perrier, it inherited the Strawberry Canyon operation and continued to pay the $524 annual fee without renewing the permit, which at that time existed under the name of the “Arrowhead Mountain Spring Water Co,” one that was never listed legally in corporate filings, but which operated under Nestlé Waters of North America, Inc. until it was acquired by BlueTriton Brands.
Nestlé’s intensive water-drafting activity, which was long been decried by environmentalists, came under increasing fire as a statewide drought, which lasted for more than five years after it first manifested in 2011, advanced. In 2015 environmental groups were gearing up to file a lawsuit claiming the U.S. Forest Service had violated protocols and harmed the ecology of the mountain by allowing Nestlé Waters North America to continue its operations in Strawberry Canyon for 28 years after its permit expired. At that point, the Forest Service moved to make an environmental review. In the meantime, Nestlé continued its water extraction, pumping an average of 62.56 million gallons of water annually from the San Bernardino Mountains. Environmentalists lodged protests with the water rights division of the California Water Resources Control Board, alleging Nestlé was diverting water without rights, making unreasonable use of the water it was taking, failing to monitor the amount drawn or make an accurate accounting of the water it was taking, and wreaking environmental damage by its action.
Following a two-year investigation, state officials in late 2017 arrived at a tentative determination that Nestlé could continue to divert up to 26 acre-feet of water (8.47 million gallons) per year. Nestlé had gone far beyond the water drafting limit the company was entitled to, the State Water Resources Control Board said, and was actually drafting 192 acre-feet (62.56 million gallons), such that 166 acre-feet (54.09 million gallons) the company was taking annually was unauthorized, according to a report released on December 21, 2017.
The Water Rights Division of the State Water Resources Control Board called upon Nestlé to immediately end its diversions beyond the 26-acre-foot threshold or otherwise marshal evidence supporting its level of diversion.
Nestlé, despite being unable to produce any historical record of water rights approaching the volume of its diversion, continued to maintain it had established rights to roughly 190 acre-feet of water per year in Strawberry Canyon. The company refused to comply with the State Water Resources Board’s mandate, continuing to take 144 acre-feet in 2017, 141 acre-feet in 2018, 210 acre-feet in 2019, and 180-acre feet in 2020. By 2020, Nestlé was in negotiations with One Rock Capital Partners, LLC and Metropoulos & Company for the sale of Nestlé Waters North America. In late March 2021, in what was represented as a $4.3 billion transaction, that deal was closed.
A month later, on April 23, 2021 the State Water Resources Control Board’s Division of Water Rights, through its permitting and enforcement branch, issued a cease-and-desist order relating to the Strawberry Canyon water diversion activity. Initially, that cease-and-desist order went to Nestlé Waters North America, as the State Water Resources Control Board had not been informed of the buyout of Nestlé Waters North America, including the Arrowhead Spring Water bottling operation, by One Rock Capital Partners, LLC and Metropoulos & Company.
By that point, the State Water Board had revised the maximum amount of water to be diverted from Strawberry Canyon to 7.26 acre feet per year.
In the April 23, 2021 notice, signed by Julé Rizzardo, the assistant deputy director for the permitting and enforcement branch of the State Water Board’s Division of Water Rights, a revised report of investigation and a draft cease-and-desist order was served upon Nestlé Waters North America, Inc., informing it to end its unauthorized and unlawful activities, which was defined in the cease-and-desist order as taking any more than 7.26 acre-feet (2.342 million gallons) of water annually out of Strawberry Canyon.
The draft order alleged that Nestlé’s diversion and use of water from Strawberry Creek in San Bernardino County violated or threatened to violate the prohibition in Water Code section 1052 against the unauthorized diversion or use of water subject to Division 2 of the Water Code. The draft cease-and-desist order notice, issued under Water Code section 1834, advised Nestlé that if Nestlé wanted to request a hearing on the draft order it had to submit a written request for a hearing to the administrative hearing office within 20 days from Nestlé’s receipt of the notice.
On May 11, 2021, eighteen days after the issuance of the notice, Robert E. Donlan of Ellison Schneider Harris & Donlan, L.L.P., the law firm representing BlueTriton Brands, Inc., filed a request for a hearing on the matters and allegations in the draft cease-and-desist order notice. The request for a hearing stated that BlueTriton is the “successor by name change” to Nestlé, is “the owner of the water rights and obligations subject to the notice, and is authorized to request a hearing in this matter.”
BlueTriton, through Donlan and Ellison Schneider Harris & Donlan, on August 5, 2021 made a motion to dismiss the State Water Board prosecution team’s draft cease-and-desist order.
On September 10, 2021 several other parties made requests to add additional hearing issues. Those additional parties eventually grew to include the San Bernardino Valley Municipal Water District; the Center for Biological Diversity; the Sierra Club; the California Department of Fish and Wildlife; the Story of Stuff Project; Steve Loe, a retired U.S. Forest Service biologist; Hugh Bialecki, a Lake Arrowhead-based dentist who is the president of the Save Our Forest Association; Amanda Frye, a Redlands resident who has done extensive historical research relating to water rights holdings and claims by various entities and corporations in San Bernardino County; Victor Vasquez, who has worked within the Division of Water Rights of the State Water Resources Control Board; Anthony Serrano, a resident of Highland and water user in the Bunker Hill Basin, where water originating in Strawberry Canyon eventually flows; and Tomas Eggers.
On November 4, 2021, the administrative hearing officer assigned to the case, Alan Lilly, rejected the motion to dismiss the prosecution team’s draft cease and desist order, ruling that the public hearing to be conducted was to involve examining evidence and considering arguments relevant to 1) whether the respondent, BlueTriton Brands, is violating prohibitions against the unauthorized diversion or use of water; 2) If any such violations or threatened violations are occurring, whether the State Water Board should issue a binding cease-and-desist order to BlueTriton Brands under Water Code section 1831; and 3) if the State Water Board decides to issue a cease-and-desist order to BlueTriton Brands under Water Code section 1831, then what provisions should be in the order. Lilly rejected the prosecution team’s motion to add the issue of public trust violations to the ground to be covered in the hearing since that accusation was not contained in the draft cease-and-desist order.
Lilly also issued a ruling that other parties’ requests to add additional hearing issues will be evaluated as the hearing proceeds based on whether the information to be provided is relevant to the three issues circumscribed as pertinent to the purpose of the overall hearing and the addition of any further possible hearing issues as the proceedings warrant.
Prior to the initiation of the hearings on Monday, January 10, Donlan on January 7 filed on BlueTriton Brand’s behalf a motion in limine which sought to exclude the testimony of several members of the public who had registered to participate in the hearings and to exclude the evidence those individuals wanted to present, including those who are anticipated to weigh in with regard to the ecological havoc to the forest wrought by the water diversions, the reduction of water availability downstream from Strawberry Canyon as a consequence of the water diversions as well as the non-existence of the water rights in Strawberry Canyon which Nestlé had formerly asserted and which BlueTriton Brands is currently claiming.
BlueTriton’s second attorney Shawnda Grady verbally entered a second motion in limine during the January 13 hearing. BlueTriton’s purpose, in particular, appeared aimed at preventing Loe, Frye and the Story of Stuff, a public interest organization which has been involved in the effort to end the water diversions from Strawberry Canyon since 2015, from speaking on the record during the hearings or submitting evidence for the hearing. Ultimately, Lilly denied the motion, reiterating his November 4 ruling that testimony and statements will be permitted by the various parties, as the water board encouraged public participation by those who met the established deadline to register to participate in the hearing insofar as their input is relevant to the issues being considered in the course of the hearing.
This week’s proceedings were initially taken up with the state prosecution team’s initial round of presentations and the testimony of Tomas Eggers, a water resource control engineer with the State Water Resources Control Board; Natalie Stork, a hydrologist and investigator assigned to the Office of Research, Planning and Performance and the Groundwater Management Program with the California Environmental Protection Agency and the California Regional Water Board; Victor Vasquez, who is employed within the Division of Water Rights of the State Water Resources Control Board; and Mary Ann Dickinson, a Lake Arrowhead resident and the past president and chief executive officer of the Alliance for Water Efficiency. Thereafter, BlueTriton began to put on its case in chief with the input of that company’s primary expert witness, Larry Lawrence, the natural resources manager with BlueTriton Brands. Lawrence held a similar position with Nestlé Waters North America.
A mechanical engineer by training, Lawrence offered an overview of the water collection and diversion facilities in use by BlueTriton Brands at the confluence of the east and west forks of Strawberry Creek.
Lawrence said that prior to 2021, the excess water collected by Nestlé from Strawberry Creek had been deposited in Waterman Canyon, two watersheds over from Strawberry Canyon, where the cisterns that Nestlé had for the collection of the water ultimately used in the Arrowhead Spring Water bottling operation are located. Since 2021, Lawrence said, Nestlé and now BlueTriton had in large measure been complying with the Forest Service’s instructions to discharge the excess water in lower Strawberry Canyon, although roughly 20 percent of the diverted Strawberry Creek water is sent to the mountain base grounds of the historic Arrowhead Hotel now owned by the San Manuel Mission Indian Tribe.
Lawrence was cross examined by multiple parties.
The water diverted from Strawberry Canyon is conveyed to the Arrowhead Water collection site between Old Waterman Canyon and Coldwater Canyon by means of a 23,000-foot-long gravity-fed pipeline coming down the mountain from Strawberry Canyon. Arrowhead Spring Water Company trucks transport the water from the cisterns and tanks at the Arrowhead Water collection site to the Arrowhead Spring Water bottling facility in Ontario.
During his testimony, Larry Lawrence mentioned that a stock sale was involved so that One Rock Capital Partners, LLC and Metropoulos & Company could effectuate Triton Water Holdings, Inc.’s acquisition of Nestlé Waters North America.
The hearing is scheduled to resume January 31, after a site visit on January 26 and January 27. Rebuttal testimony is scheduled for February 14. Much of the hearing was rescheduled to accommodate BlueTriton’s attorneys’ complaints that they needed more time to read the other parties’ evidence files.
A month after the Redlands City Council gave developer Jeff Burum and his company permission to proceed with the construction of a housing tract on the grounds of the historic England/Atwood/Heeney Estate, a cross section of the city’s residents has filed suit to prevent the project from proceeding.
Burum and his partner, Matt Jordan, used a limited liability subdivision of Burum’s company, Diversified Pacific, to pursue the project. That entity, Redlands Palm Investment, LLC, sought and obtained the approvals and entitlements needed to carry out a 28-home planned development on the historic orange grove property located at the southeast corner of West Palm Avenue and Alvarado Street.
In 1891, Thomas Y. England planted that grove, consisting of naval orange trees. The grove involved a gravity-fed irrigation system, and in 1893 England set within the grove a home in the Victorian style, which included a carriage house immediately behind it. England had also established on a portion of the property facing Alvarado Avenue a Queen Anne cottage. In 1914 the Victorian home at 301 West Palm Avenue was altered by a subsequent owner, Guy Hunter, into a prairie style home.
The England Estate containing all of its historic and still-functioning assets was sold by the Hunter Family to James and Annie Attwood in 1922. The Attwoods in turn passed it along to their daughter, Mary Attwood Heeney, and her husband Thomas J. Heeney, who continued to operate it as a citrus-producing grove.
The grove, its appurtenances, the estate and its structures have remained intact, though dilapidating, until the present, even as the lion’s share of Redlands’ once ubiquitous citrus groves, beginning in the 1950s and then over the next six decades were steadily eradicated and replaced primarily with residential development.
In Redlands, more than in most other areas of the Inland Empire, an effort to preserve the vestiges of the city’s agricultural history has taken root, such that the city has ten sometimes overlapping historic zones. The Redlands Conservancy exists as an independent endowment dedicated to historical preservation in the community. Meanwhile, in 1986, Redlands voters passed Measure O, which approved a bond to pay for purchasing and thereafter dedicating for preservation historic citrus groves in the city.
More than a decade ago, Thomas Heeney’s grandson Christopher Brumett along with his wife Jacquelyn signaled their willingness to sell the 8.8-acre England Estate including its grove property. The City of Redlands, with its available grove-preservation bond money, and the Redlands Conservancy, showed interest. The Redlands Conservancy offered $3 million for the property. The Brumetts turned that offer down, saying they wanted roughly twice that amount. Another offer, this one for $4 million, was tendered by preservationists. Again, the Brumetts balked at that offer.
Thereafter, Burum and Jordan approached the Brumetts with their own offer. In June 2019, the Brumetts accepted Diversified Pacific’s $2.35 million bid for the 8.8 acres. Burum, Jordan and Diversified Pacific applied with the city to convert six of the England Grove Estate’s 8.8 acres into 32 2,000-to 2,600 square foot homes on what were mostly 6,200-square-foot lots. The approved number of residences was reduced, ultimately, from 32 to 28.
It was Burum’s contention that “The only way for anyone to save the historical nature of the estate is to buy the property and use the surplus land to build something that can be marketed and sold so you can use the money to save the historical structures, the two houses and the barn.”
The city began to consider the project proposal in earnest in 2020, allowing Redlands Palm Investment, LLC, to prepare a mitigated negative declaration for the project rather than insisting upon a much more exhaustive environmental impact report on the proposal to give the project its environmental certification. On October 1, October 15, and December 17 of 2020, and then on March 4, 2021 the Redlands Historic and Scenic Preservation Commission reviewed and discussed the initial study the city had completed as part of the proposed mitigated negative declaration. Ultimately, the historic and scenic preservation commission adopted a resolution at its March 4, 2021 meeting documenting its findings that the proposed mitigated negative declaration and cultural resources report did not adequately identify and address the potential impacts to cultural and historic resources, while recommending that a full environmental impact report be prepared for the project to comprehensively identify and analyze any potentially significant impacts.
The Redlands Planning Commission took up consideration of the project at its May 11, 2021 and June 8, 2021 meetings, during which its various members expressed misgivings and reservations about what were in the end deemed by five of its members to be minor issues. The commission, prior to a final vote on the matter, consented to appointing commissioners Karah Shaw and Steve Frasher to a subcommittee, which was to make a more in-depth examination of the project. After considering the input of the Frasher/Shaw subcommittee, on June 22, 2021, the commission voted 5-to-2, with Dr. Angela Keller and Matt Endsley dissenting, to recommend that the city council provide the project with a mitigated negative declaration with a proviso that roughly 56 of the trees be retained and a kiosk erected that would recite the history of the England Estate and its significance to Redlands.
The city council convened on July 20, 2021 to consider the project, but not before a number of Redlands residents formed a group tentatively calling itself Save The Grove, which retained attorney John McClendon to represent it. The council balked at adopting the mitigated negative declaration at the July 20 meeting after McClendon cited what he said were multiple shortcomings in the fashion in which the environmental certification for the project was being conducted. McClendon maintained inadequate consideration was being given to the cultural and historical elements of the estate, which the city was obliged to see preserved. The council again deferred action on the project at its September 6, 2021 meeting, at which receiving and accepting a socioeconomic cost/benefit study prepared for the proposed project as well as approving both a tentative parcel map for the project and a conditional use permit for the project were slated. Instead, in apparent deference to issues McClendon had raised, the council, while stopping short of undertaking a full-blown environmental impact report, complied with Development Services Director Brian Desatnik’s recommendation that the study for the mitigated negative declaration be recirculated once more, with the intent of bringing the matter back for reconsideration in November. That action was endorsed by Paige H. Gosney, an attorney representing Diversified Pacific.
On the agenda for the city council’s November 16 meeting, the socioeconomic cost/benefit study, the tentative parcel map, the conditional use permit, a tentative tract map and variances for the project were scheduled for discussion, while no mention of the mitigated negative declaration was made. After McClendon pointed that omission out to the city, Mayor Paul Barich directed that the council not conduct the hearing on the issue, postponing the matter. The project was rescheduled for consideration at its December 7 meeting, with the posted agenda for the meeting properly listing the mitigated negative declaration among the actions the council had the option of approving. Noticing to residents living in proximity to the project site, however, failed to include reference to the mitigated negative declaration. The council on December 7 gave unanimous approval to the project.
McClendon, on behalf of the collection of city residents which have now officially adopted the identifying moniker Save The Redlands Orange Groves, filed a petition for a writ of mandate, with the city as the respondent and Redlands Palm Investment, LLC as the real party in interest, challenging the city’s approval of Redlands Palm Investment LLC’s project.
“Petitioner contends that respondent’s preparation and approval of a mitigated negative declaration for the project, and its approval by the city’s elected city council, violate specific provisions of the California Environmental Quality Act and the guidelines for implementation of the California Environmental Quality Act,” the petition states. “Petitioner is challenging the project because (among other things) it is a project that may result in significant impacts on the environment that have not been adequately assessed or mitigated.”
According to McClendon, the city and the city council “ignored fair arguments supported by expert opinion and substantial evidence that the development and operation of the project upon the property would cause significant unmitigated impacts on the environment. In refusing to prepare and certify a legally adequate environmental impact report that fully disclosed and analyzed all of the potential impacts that will result from the project, refusing to consider feasible and environmentally superior alternatives to the project, and failing to make all mitigation measures fully enforceable, respondent has disregarded or treated as a mere formality the specific and substantive requirements of the California Environmental Quality Act.”
McClendon further asserted that the city’s “approval of the project violates California’s Planning and Zoning Law (Gov. Code §§ 65000, et sequitur) as well as the city’s own laws because the project is inconsistent with the city’s general plan and a voter-enacted initiative known as ‘Measure U.’”
Measure U was an initiative approved by Redlands voters in 1997 to enact several principles of managed development within the City of Redlands. Measure U required that developers defray the cost of any public infrastructure that had to be built to accommodate their projects. Measure U also called for the preservation of agricultural and citrus production in the city.
The petition for a writ of mandate calls upon the court to “vacate and set aside respondent’s approval of the project and the mitigated negative declaration.”
The most preoccupying of the elements of the petition is McClendon’s contention that neither Diversified Pacific nor any other entity should be permitted to develop the England Estate property because of restrictions set out in Measure U calling for the property to be preserved as functioning agricultural land.
McClendon cited a portion of Measure U stating that “No land undeveloped as of March 1, 1997 and designated in whole or in part as ‘urban reserve’ or ‘urban reserve (agricultural)’ in the Redlands General Plan in effect as of June 1, 1987, and/or any land parcel that was in active agricultural production on November 3, 1986 regardless of zoning, shall be re-designated or rezoned to permit residential density greater than the estate residential (R-E) classification, as the same existed on June 1, 1987, in the Redlands City Zoning Ordinance, unless mandatory findings are made and the re-designation or rezoning is approved by four-fifths vote of the total authorized membership of the city council.” Those mandatory findings extended to a certification that “overriding economic or social benefits to the city and its residents and taxpayers from the proposed density increase, [that] the proposed density increase will not cause adverse environmental impacts, [that] the proposed density increase will not convert viable agricultural land to non-agricultural uses, [that] the proposed density increase will not have a growth-inducing effect on other property, [that] the resulting use will be compatible with uses on adjacent land [and that] the proposed density increase will not require substantial expansion of public infrastructure, facilities or services.”
The council made no such findings in approving the project, McClendon propounded.
The petition states, “The property is one of the city’s most unique historical treasures. Known as the England Estate, its original (1893) main house, Queen Anne cottage, carriage house and barn make it one of the last examples of a fully intact grove estate in the city. Among the many things making the property and its cultural context so remarkably unique are its original hand-cut stone walls and its nearly 700 heritage orange trees, planted between 1891 and 1893 on prime farmland that are still productive and watered by the last remaining example of a 19th Century gravity-fed irrigation system in the city.”
According to McClendon, “the city violated the due process rights of property owners surrounding the property” when it failed to give them notice prior to the December 7, 2021 meeting at which the project was approved that the council was to consider a mitigated negative declaration for the project.
Further, McClendon maintains, “Respondent further did not proceed in the manner required by law in that it caused a mitigated negative declaration to be produced that was biased in favor of the proposed project’s approval and, therefore, failed to constitute the full disclosure document intended to objectively inform decision-makers and the public of the project’s true impacts, mitigation measures, and alternatives.”
Repeated efforts by the Sentinel to reach Burum as well as two attorneys representing Diversified Pacific, Mark Ostoich and Paige Gosney, were not successful prior to press time this week.
Previously, Burum told the Sentinel that the Redlands Palm project, which will keep the 1893 England home, its accompanying carriage house/barn and the Queen Anne cottage intact, is a “quality historical preservation.” He said efforts to save the grove and its watering system were not worth pursuing. The grove he said, as a cultural and historic asset, was “not something that was so overwhelming that it had to remain. That grove has been dying for some time. It makes no sense to save an ancient water system that is no longer functioning and never functioned efficiently, especially in light of the drought and challenge to our state’s water availability.”
The night of December 7, when the project was approved by the city council, then-Councilman Paul Foster, who voted with his colleagues to approve the project, said of those members of the community who compose Save Redlands Orange Groves, “Many of those of you that are upset about this project are living in homes that are sitting on property that was the original grove. So, for you to come and say that this private property owner shouldn’t be able to move forward with his project is really quite disingenuous. You have your piece of Redlands so nobody else should have it? That’s simply not right. That’s just not fair.”
Foster has left the council, and has relocated to Camano Island in Possession Sound, a section of Puget Sound in Washington State.
The staff report for the action taken by the city council in approving the project on December 7was prepared by Senior Planner Sean Reilly, submitted by Development Services Director Brian Desatnik, reviewed by City Attorney Daniel J. McHugh, Assistant City Manager Janice McConnell and Management Services/Finance Director Danielle Garcia and recommended by City Manager Charles Duggan. In the report, Sean Reilly stated “the project’s impacts remain less than significant with the incorporation of mitigation measures.”
Reilly told the city council on December 7, “The mitigated negative declaration contains a total of nine mitigation measures that have been recommended to reduce potential impacts associated with biological resources, cultural resources, geology & soils, noise and tribal cultural resources.”
The effort by the collective governments in San Bernardino, Kern and Inyo counties to come into compliance with the State of California’s Sustainable Groundwater Management Act in the remote Indian Wells Valley has now been simplified or complicated, depending on how it is looked at, through a move to adjudicate water rights in the region.
In the face of a four-year running drought, California state officials in 2014 undertook efforts to head off the absolute depletion of the state’s regional water sources. In September 2014, then-California Governor Jerry Brown signed into law the Sustainable Groundwater Management Act, which requires local agencies to draft plans to bring groundwater aquifers into balanced levels of pumping and recharge. That was followed in 2015 by Brown mandating water-saving measures throughout the state.
In response, pursuant to a joint exercise of powers agreement, the Indian Wells Valley Groundwater Authority was formed with Kern County, San Bernardino County, Inyo County, the City of Ridgecrest and the Indian Wells Valley Water District as general members and the United States Navy and the United States Department of the Interior Bureau of Land Management as associate members, with each general member having one voting seat on the authority board and the federal associate members participating in all board discussions, but not having a vote.
The joint powers authority took as its mandate counteracting the overdraft of the aquifer underlying Indian Wells Valley, which lies at the extreme northwestern end of the Mojave Desert and the confluence of the northwestern corner of San Bernardino County, the southeastern end of Kern County and the southwestern extension of Inyo County.
Based upon a survey of water usage patterns undertaken by an engineering consultant, Carlsbad-based Stetson Engineers, the authority and the Indian Wells Valley Water District sought to derive a strategy for both reducing water use in the valley and increasing groundwater recharge to reach a balance of both that will end the overdraft. Several different plans, or models, were contemplated. Basically, the concept was to decrease the drafting of water from the regional aquifer through conservation, increased recycling of water and perhaps the minimization of evaporation, augmented by the importation of water from outside the valley to achieve, no later than 2040, a balance of water coming in with the amount of water usage, such that the depletion of the aquifer will end.
Stetson Engineers was designated the water resources manager for Indian Wells Valley, and the authority’s board in January 2020 passed a tentative proposed groundwater sustainability plan and voted to submit it to the state. Thereafter it made adjustments to the plan, which contained water use limitation elements and water replenishment measures. The plan incorporated a farmland fallowing option as well as an increase in the monthly assessment or fee that was imposed on the extraction of water by major pumpers. That fee had been previously collected to cover the costs associated with the administrative activity of the groundwater authority.
After a survey of water use by well owners both collectively and individually was made, the authority assigned water use allowances to the region’s well owners. Excess use fees, referred to as augmentation fees, were formulated for application to those well owners who pump above their allowances as well as on any farmer whose use exceeds his respective share of the water supply set aside for agricultural usage. Money generated in this way is used to purchase imported water and pay for the infrastructure needed to bring in the imported water.
In September 2020, Searles Valley Minerals, based in the San Bernardino County community of Trona, represented by Eric Garner, Jeffrey Dunn and Maya Mouawad with the law firm of Best Best & Krieger, filed a lawsuit in Kern County Superior Court against the Indian Wells Valley Groundwater Authority in an effort to protect what Garner, Dunn and Mouwad asserted are the company’s groundwater rights within the Indian Wells Valley Groundwater Basin, and to stop the collection of what they characterized as an illegal and unfair groundwater replenishment fee and a tax disguised, they assert, as an “extraction fee.”
Searles Valley Minerals uses solution mining, which involves soaking portions of the company’s dry Searles Lake in San Bernardino County with water to precipitate brine which is then extracted and processed to produce boric acid, sodium carbonate, sodium sulfate, several specialty forms of borax, and salt.
The groundwater replenishment fee, Garner, Dunn and Mouawad maintained, is unprecedented and exorbitant, and will increase the company’s water costs by 7,000 percent or $6 million per year – pushing Searles Valley Minerals out of business after more than 140 years of operation, thereby threatening the livelihood of the company’s 700 employees. The groundwater replenishment fee ignores and violates Searles Valley Minerals’ adjudicated water rights, according to the lawsuit.
Searles Valley Minerals’ 91-year-old water rights are the most senior in the Indian Wells Valley Groundwater Basin.
Garner, Dunn and Mouawad took issue with the fashion in which the China Lake Naval Air Station is not subject to the restrictions in the plan nor its fees.
“Searles Valley Minerals’ right to pump water in the basin for domestic uses is senior to any water right reserved to [the] Weapons Station, and because [the] water district’s groundwater pumping began no earlier than 1955, its appropriative right, if any, to basin water remains junior to Searles Valley Minerals’ right,” according to the lawsuit. “The authority falsely asserts in its groundwater sustainability plan that any pumping allocations under the groundwater sustainability plan will be ‘consistent with existing groundwater rights and priorities.’”
Other entities beside Searles Valley Minerals contesting the groundwater replenishment fee were the companies Mojave Pistachios and Sierra Shadows Ranch, along with John Thomas Conaway and the Nugent Family Trust, which collectively sued the groundwater authority and the Indian Wells Valley Water District as the lead agency in that joint authority.
Growing out of that litigation was a cross complaint from the Indian Wells Valley Water District in the form of Indian Wells Valley Water District v. All Persons Who Claim a Right to Extract Groundwater in the Indian Wells Valley Groundwater Basin. Essentially, that suit calls for a survey of water usage among all water users and purveyors in the region, data from which will ultimately form the basis of water use allotments being apportioned to those users. Those users will be afforded the opportunity to object to or provide input regarding those allotments, which will ultimately be determined by an Orange County Superior Court judge.
The disputes over water in the Indian Wells Valley Region have been assigned to the Orange County Superior Court to avoid bias that might manifest if the hearings were held in a court in Kern, Inyo or San Bernardino counties.
One issue complicating the matter is that both the Bureau of Land Management and the China Lake Naval Air Weapons Station, as federal entities, are exempt from the groundwater sustainability plan and the Sustainable Groundwater Management Act, and therefore not subject to the restrictions that will be imposed in the groundwater sustainability plan. The China Lake Naval Air Weapons Station encompasses two ranges and totals over 1,100,000 acres or 1,719 square miles, much of that within Indian Wells Valley. While the China Lake Naval Air Weapons Station has made strides in recent years in reducing its water use, it still drafts some 1,600 acre-feet of water from the aquifer annually.
District sources have said the adjudication, which riled the populace after the district sent out 20,000 letters dated December 16, 2021 to all individual pumpers and local landowners who use the basin informing them of their opportunity to respond to protect their individual water rights, is intended to forge a final and overarching practical and legal determination of water rights for all water pumpers in the Indian Wells Valley basin, the Navy included.
In a posting to the Indian Wells Valley Water District’s website, General Manager Don Sbeda wrote, “Recently, the water district’s board of directors voted to file a comprehensive adjudication that does include Navy participation and allows all those who may claim a right to pump or store water in the basin to participate, assert and prove any rights they may claim. A case management conference has been set by the court for March 15, 2022.”
This week, Chino Hills took a further stride toward contesting the State of California’s usurpation of what has traditionally been local land use authority.
In what is widely seen, both positively and negatively, as a daring social experiment, the State of California has, through Government Code §65580, required each municipality in the state to assist in alleviating the homelessness crisis by complying with what the California Department of Housing and Community Development deems to be each city’s new housing responsibility. Under the so-called Regional Housing Need Allocation process, a determination is made of what number of dwelling units according to affordability type each community is to accommodate over an eight-year period. The expectation is that those cities will comply by granting developers clearance to build the specified number of houses over that time period.
In the case of Chino Hills, the state’s expectation was that the city welcome 3,720 more dwelling units from October 2021 to October 2029. Previously Chino Hills stood up to Sacramento, counter-proposing that instead of the 3,720 homes, it allow 1,797 units, a 52 percent reduction.
On Tuesday, the Chino Hills City Council ventured even further down the path of resisting having to surrender land use authority within its 44.75 square mile confines by complying with an outpouring of resident sentiment by discontinuing its contemplation of allowing the construction of up to 220 units on 10-acre Caballero Ranch, located at Peyton Drive and Eucalyptus Avenue. The city had tentatively opened the property to intensified development after another proposal for high density apartments/condominiums within Crossroads Marketplace fell through. Officials had included Caballero Ranch on a list of properties that is to be forwarded to the state as potential locations for high density development.
To the chagrin of Ed McCoy of Fairfield Residential LLC, the prospective developer of Caballero Ranch who was salivating with the anticipation of stacking 22 units per acre on the property, the city council removed the parcel from the list.
More than three years after the county board of supervisors used its administrative authority to bypass the county’s voters and place roughly 94 percent of the county’s land mass within a fire assessment district, a group of governmental accountability activists achieved a milestone in its second effort to rescind the $161.98 annual tax imposed on the landowners in the county’s unincorporated areas that was a consequence of the board’s 2018 action.
Previously, fire protection in the county’s unincorporated areas – those places where the city and town limits of the county’s 22 cities and two incorporated towns do not extend – was part of the service provided through county government’s routine function. In 2018, then-County Fire Chief Mark Hartwig, asserting that the traditional methods of taxation and revenue generation for local government were no longer adequate to ensure the county fire department was sufficiently manned, outfitted and prepared to ensure the public safety, led a move to place all of the unincorporated county areas his department serviced within a fire protection assessment zone, known as FP-5, originally formed to defray the cost of providing enhanced fire and paramedic service to the desert communities of Silverlakes and Helendale in 2006.
Though California’s Proposition 218 required that any new tax must be approved by a vote of those who must pay for it, the county used a protest vote process to gain clearance to enlarge FP-5 to cover the roughly 18,899 square miles of unincorporated areas within the 20,105-square mile county. Residents were sent notices of the district’s expansion and were invited to object to it. Those who sent in letters of protest were deemed to have voted against being included in the enlarged FP-5, Those who did not respond were deemed to have supported being brought into FP-5. If 25 percent had protested, the matter would have been taken to an actual vote in which landowners would cast traditional straightforward yes or no ballots to determine whether to allow or disallow the assessment district expansion. If 50 percent plus one or more had voted in opposition, the district expansion would have been considered rejected. Less than three percent of the unincorporated county landowners returned letters of protest.
The Red Brennan Group, asserting the protest process was a backhanded method of securing support for FP-5’s expansion, collected enough signatures to place an initiative on the November 2020 Ballot. Measure U asked county voters if they wanted to repeal the enlargement of FP-5 and end its taxing authority. Measure U was defeated, with 109,483 votes in favor of it, or 47.97 percent and 118,772 votes against it, or 52.03 percent.
The Red Brennan Group, believing county resident sentiment may have changed, has again collected sufficient signatures to place another measure seeking to free all of the county other than Helendale and Silverlakes from inclusion in FP-5 and the imposition of its $161.98 per parcel per year fire protection tax.
On Tuesday, the board of supervisors, faced with a sufficient number of county voters having signed petitions calling for the measure to go before the county’s voters, consented to putting the initiative on the countywide ballot in the June primary election.