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San Bernardino County Releases Reports On Two Closely Scrutinized Land Deals

CP&DR Staff on
Sep 1, 2006

The San Bernardino County Board of Supervisors has released investigative reports commissioned by the county regarding two closely scrutinized land deals: the county’s lease and eventual purchase of a private jail in Adelanto, and the acquisition of surplus county real estate by a supervisor’s aide.

Los Angeles attorney Leonard Gumport completed the reports last year, and, at that time, county leaders said the investigations cleared the county of wrongdoing. However, they refused to release the documents. Local newspapers pressured the county and, in August, supervisors produced the reports — and then began distancing themselves from the conclusions.

The first investigation involved the county’s $31 million deal to lease and then purchase the private Maranatha Correctional Facility. At the time, lobbyist Brett Granlund, a former assemblyman from Yucaipa, represented both Maranatha and the county. Gumport concluded that Granlund pressured the county to buy the jail while not disclosing that he was representing both parties. The report also questioned why the county purchased the jail “as-is” and did not require a current-value appraisal. Gumport concluded that Granlund and his employer, Sacramento-based lobbying firm Platinum Advisors, had a conflict of interest that tainted the deal.

Granlund has said he advised the county that he represented Maranatha, and he denied lobbying the county on the jail’s behalf. The district attorney’s office concluded an investigation into the matter earlier this year without filing charges. Platinum Advisor’s chief, Darius Anderson, a developer and Democratic fundraiser, called the report’s conclusions “slanderous” in an interview with the Inland Valley Daily Bulletin. “We’ve done nothing wrong and we have nothing to hide,” Anderson told the newspaper.

County Administrator Mark Uffer denied that Granlund influenced the jail deal. In a formal response released with Gumport’s report, Uffer wrote: “While Granlund did make statements supporting the Maranatha facilities to the CAO and sheriff, the decisions to lease and then purchase the facility were based solely on the county’s immediate need for jail space and the research and recommendations of the county’s professional staff, which had zero contact with Granlund prior to the Board of Supervisors approval of the lease.”

Supervisor Bill Postmus called Gumport’s report “sensationalistic” and said the charges were motivated by Granlund’s disgruntled former business partner. “Still,” Postmus said, “if one looks past Gumport’s hyperbole, loaded wording, and in some cases unsupported statements, I believe it is clear that the public was in no way harmed in the lease and eventual purchase of the Maranatha facility.”

The disgruntled business partner is Jim Foster, himself the subject of Gumport’s other report. It says that Foster, while serving as chief of staff for Supervisor Dennis Hansberger, violated conflict of interest laws and county ethics policies when he acquired surplus county land.

Foster and Granlund had been partners in a billboard business. When the county declared a 0.4-acre parcel in Redlands as surplus, Foster showed the property to Granlund, who partnered with another couple to buy the property from the county for $20,000 in 2001. The following year, Granlund sold his interest in the property to Foster for $10,000. Two years later, the parcel and an adjacent lot sold for $100,000, netting Foster a $36,000 profit, according to the report.

Granlund later alleged that Foster was a silent partner in the deal all along. Whether that was true or not, Gumport concluded that Foster’s actions were improper. After the deal became public last year, Foster was fired, and he is under investigation by the district attorney’s office. He has repeatedly denied wrongdoing, saying the entire matter stems from a soured business relationship.

A dispute over regional flood control facilities on the site of a housing and commercial development in Upland appears headed back to state appellate court after a trial court judge ruled San Bernardino County Flood Control District’s easements on the site no longer exist.

Superior Court Judge Christopher Warner ruled that the county “has continuously violated and repudiated its obligations to maintain, repair, operate, insure, properly permit or take ownership of any of the facilities.” Therefore, Warner ruled, the county’s flood control easements had been extinguished.

The developers of Colonies Crossroads — 1,150 housing units and about 1.1 million square feet of commercial space along the 210 freeway — have contended for years that the county must pay them for the approximately 70 acres devoted to flood control and for costs of reconstructing flood channels and a basin (see CP&DR Local Watch, January 2004). At least $100 million could be at stake.

Last year, the Fourth District Court of Appeal overturned a trial court judge and found that easements from the 1930s covered at least part of the flood control basin. On remand, however, Judge Warner determined that the county had essentially given up the easements and relied on the property owner to maintain flood control facilities.

Vowing to continue pressing the case, interim County Counsel Dennis Wagner said the ruling was “inconsistent” with the Fourth District’s decision. “This ruling is the same as the prior trial court decision, which was overturned on appeal,” Wagner said in a written statement.

A Kern County ballot measure that bans the application of sewage sludge to farm fields is the subject of a federal court lawsuit filed in August by the City of Los Angeles.

For years, Kern County officials have tried to slow or halt the importation of sludge, a byproduct of wastewater treatment. In June, county voters overwhelmingly approved Measure E, which prohibits the spreading of sludge on land. Kern County currently receives about one-third of the sludge generated statewide, including nearly all of Los Angeles’s.

Kern County contends that the continual application of tons of sludge to farm fields is unsafe because water, air and crops could become tainted by toxic chemicals and viruses in the material (see CP&DR Environment Watch, July 2000). Los Angeles and sanitation districts, which call the material “biosolids,” say it is safe and meets all federal, state and local standards for land application. Los Angeles deposits its sludge on a 4,200-acre farm the city owns south of Bakersfield.

“Biosolids have only improved the environment in Kern County, and there is no basis for this ban,” said Rita Robinson, director of the L.A. Bureau of Sanitation. “The property we purchased in Kern County would not be productive farmland without the use of our biosolids and the treated wastewater from Bakersfield.”

Joining the city in the lawsuit are the Orange County Sanitation District, Los Angeles County Sanitation District No. 2, the California Association of Sanitation Agencies, and property owners and trucking companies that contract with public entities. Interestingly, they filed their lawsuit in federal court. Last year, a state appellate upheld Kern County regulations regarding the land application of sludge, although the court ruled the county should have completed an environmental impact report for the regulations (see CP&DR Legal Digest, May 2005).

The new lawsuit charges that Kern County’s ban “directly conflicts with comprehensive federal and state programs which regulate biosolids and encourage their recycling through land application.” The lawsuit contends the initiative conflicts with the constitution’s Commerce Clause, denies the plaintiff’s equal protection, and is superceded by the Clean Water Act and state laws.

The recalled mayor of Murrieta was arrested in August for some of the same alleged conflict-of-interest transgressions that were issues in his removal from office last year.

Jack van Haaster faces 10 felony counts of perjury and filing false documents related to loans he received or made. He also faces five misdemeanor counts of conflict of interest regarding actions taken to aid a day care center in which he allegedly had a financial stake.

According to Riverside County prosecutors, van Haaster failed to list on annual disclosure reports filed with the city clerk and the Fair Political Practices Commission loans totaling $490,000 from a Murrieta resident, an employee at his accounting office and two Murrieta businessmen. Van Haaster also allegedly failed to report loans that he made to a local contractor.

The day care center project — which was prominent during the recall campaign — involved a proposal from California Oaks Childcare to build a 394-student facility and swim academy on three acres in Murrieta. Prosecutors allege that van Haaster pressured four city planning commissioners to approve the project. He also voted for city-funded road improvements near the project site.

Van Haaster’s daughter was listed as the childcare business owner, and the mayor recused himself when the project came before the City Council. Prosecutors, however, say bank records show van Haaster had invested $165,000 in the childcare center and received back $100,000.

Van Haaster, who was on the Murrieta City Council for 12 years, is scheduled to be arraigned this month and could be sentenced to up to eight years in prison if convicted.

The former mayor was arrested only hours before the City Council voted 3-1 to censure Councilman Warnie Enochs for voting on a shopping center project for which both he and his son have been subcontractors. Enochs is scheduled to go on trial this fall on unrelated charges of extortion, forgery and perjury involving a messy divorce.

Siskiyou County Planning Director Wayne Virag has been fired amid questions about conflicts of interest and an investigation by local law enforcement authorities.

The assistant planning director since 1995, Virag was named head of the department in August 2004. He has repeatedly said nothing more than paperwork errors are involved; the Board of Supervisors vote to dismiss him was divided 3-2.

Greg Messer, a failed candidate for supervisor, first raised conflict of interest questions when he revealed during the recent campaign that Virag owned a real estate development business with William Roberts, who has had extensive dealings with county planners as a representative of cell phone companies. Virag did not list the business on annual economic disclosure forms required by the Fair Political Practices Commission, nor did he recuse himself from proposed use permit applications submitted by Roberts. Additionally, although Virag listed on his disclosure form only a mobile home park in Yreka, he apparently has an ownership interest in at least 11 real properties in Siskiyou County.

Environmental Health Director Terry Barber has been named interim planning director.

The City of Alameda may yet get to acquire upwards of 40 acres of railroad land at a small fraction of market price. Alameda County Superior Court Judge Jon Tigar ruled that the city is entitled to buy the remnants of the Alameda Belt Line’s railway and a 22-acre rail yard for $966,000.

The decision is the latest chapter in a seven-year battle over the Alameda Belt Line, which stopped operating in 1998. The city built the original 1.2-mile rail line in 1918 to serve the waterfront. The city sold the line to two railroads in 1924. However, a provision in the sale contract permitted the city to buy back the line and any extensions for their original costs if the railway stopped operating.

Alameda Belt Line, now owned by Union Pacific and Burlington Northern Santa Fe, argued that the provision no longer applied, but a state appellate court ruled that the contract could be enforced (see CP&DR Legal Digest, December 2003). The appellate court sent the case back to Judge Tigar, who issued his ruling in August.

Alameda Belt Line, which will appeal the latest decision, wants to sell 22 acres to developer Michael Valley, who plans to build 200 housing units. However, city voters in 2002 rezoned the property as open space, and activists are fighting for a city park.

San Mateo voters will not decide the fate of the Bay Meadows horse track in November. San Mateo County Superior Court Judge Mark Forcum ruled that city and San Mateo County elections officials had acted properly in disqualifying petition signatures from people who listed different addresses than on their voter registration affidavits or who signed their names differently.

Last year, the city approved Bay Meadows Land Company’s plan to build at least 1,000 housing units and 1 million square feet of office and retail space on the site of the horse track (see CP&DR Local Watch, March 2006). Project opponents fought back with a referendum, but after elections officials threw out questionable signatures, the referendum was about 100 signatures short of qualifying for the ballot. Referendum proponents sued, but Judge Forcum has now ruled against them. An appeal is likely.

A referendum of a proposed development on a portion of Rancho San Juan in Monterey County also will apparently not appear on the November ballot. United States District Court Judge James Ware in August declined to order the referendum of the 1,100-unit Butterfly Village project onto the ballot, calling election law “unsettled.”

After the Monterey County Board of Supervisors approved the project in November 2005, opponents quickly gathered enough signatures to force a referendum. However, because petitions were not circulated in both Spanish and English, the county refused to place the referendum on ballot. The county’s refusal followed Ware’s decision to block a Monterey County general plan initiative from the ballot for the same reason (see CP&DR, June 2006).

Ware declined to make a final decision in a lawsuit regarding the referendum until an en banc panel of the Ninth U.S. Circuit Court of Appeals decides Padilla v. Lever, No. 03-56259, an Orange County school board case involving similar Voting Rights Act issues. That case was argued in June and a decision is expected any time.

The San Diego County Water Authority has dropped out of a plan to build a seawater desalination plant in Carlsbad. The authority’s board voted not to certify an environmental impact report for the desalination facility and to end negotiations with plant developer Poseidon Resources.

The desalination plant would be linked to NRG Energy’s Encina power station, which is cooled with seawater. But NRG announced that it plans to demolish the plant and replace it with an air-cooled facility during the next 10 to 20 years. That announcement came a few months after the State Lands Commission announced that it wants to phase out coastal power plants that draw water from the ocean because of harm to marine life — a move that could threaten numerous desalination proposals.

Still, the Carlsbad desalination plant, which would be the largest in the United States, remains alive. The City of Carlsbad is committed to the Poseidon proposal, and, in August, the San Diego Regional Water Quality Control Board approved a discharge permit for the project. Next up is a Coastal Commission review.

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