Saturday, July 4, 2009

San Bernardino Grand Jury recommends public auction

Wendy Leung, Staff Writer
Created: 07/01/2009 07:38:42 PM PDT

SAN BERNARDINO - The county's Grand Jury recommended a public auction be held to sell off a controversial plot of undeveloped land in Rancho Cucamonga.

In its annual report released Wednesday, the San Bernardino County Grand Jury also backed the termination of an agreement between the city and the county to choose a developer for the land and recommended city leaders and the city attorney determine whether Councilman Rex Gutierrez should be recused from the process.

County Supervisor Paul Biane, himself a former Rancho Cucamonga councilman, said it made sense to delay action on the land, given recent controversy, but he wasn't certain a public auction would fetch the highest price.

"Somebody is going to spend three to five years addressing the environmental concerns and going through the entitlement process before you know the true value of the property," Biane said. "Right now, there's no certainty what could be built on the 1,200 acres. So a straight auction would not give us the highest value."

The 1,200 acres in question are located north of Banyan Street between Milliken Avenue and the Day Creek Channel.

The land has been coveted by developers since at least 2005, when it was part of settlement talks between the county and Colonies Partners, which at the time was suing the county over a flood-control basin on its Upland development.

The land was dropped from the deal after the county's attorneys complained that Biane and former Supervisor Bill Postmus had asked the county's lawyers to leave the room while they privately negotiated a $77 million settlement with the developers that would have included the land.

The attorneys protested to the Board of Supervisors, warning that taxpayers were getting a bad deal, and the tentative agreement fell by the wayside.

Biane, Postmus and Supervisor Gary Ovitt later approved a $102 million settlement with the Colonies that did not include land.

More recently, county and city officials signed a cooperative agreement allowing the City Council to select two from a group of five developers to build on the site. The county would then make the final selection.

According to the Grand Jury report, proceeds from the land sale could be used to pay down the debt incurred by the county to pay the Colonies settlement or to fund flood-control improvements on the west side of the county.

The city was expected to make its recommendations in June, but the agreement was terminated after the county filed a lawsuit against Gutierrez over alleged misconduct in the Assessor's Office, where he was employed as intergovernmental relations officer for Postmus after Postmus was elected assessor.

The 1,200 acres project - expected to feature homes, retail, parks and other amenities - became much scrutinized following the release of a report by county special counsel John C. Hueston.

Hueston's investigation, prompted by last year's Grand Jury report, found evidence of widespread fraud and political activity on county time in the Assessor's Office under Postmus.

Gutierrez, who was hired by Postmus at the urging of Colonies co-managing partner Jeff Burum, performed little or no Assessor-related duties when he worked there, according to the Hueston report.

Burum is also principal manager of Diversified Pacific, which is part of the Rancho Alliance consortium, one of five developers in the running for the 1,200 acres project.

According to the Grand Jury report, Burum also helped Gutierrez get a job at the county's Economic Development Agency after his position was eliminated in the Assessor's Office.

On Wednesday, Burum said in a statement that his helping Gutierrez get a job was "old news."

"As I've said before, it's common for anyone to provide a reference or recommendation on behalf of a qualified job applicant who also happens to be a friend," Burum said in a statement. "There's nothing wrong with that or even unusual. I have always conducted myself and my businesses according to the highest legal and ethical standards and will continue to do so."

Gutierrez could not be reached for comment on Wednesday.

Because of Gutierrez's relationship with Burum, the Grand Jury recommended that the City Council and city attorney should determine whether Gutierrez should recuse himself from voting on the development of the 1,200 acres.

Councilman Sam Spagnolo agreed with that recommendation.

"I think that if Rex is still around whenever it resurfaces, he'll probably have to recuse himself," Spagnolo said.

The Grand Jury also recommended that the property should be sold in a public auction.

But Biane said Wednesday that because the 1,200 acres of land is so unique and the true value is not yet known, the county might not get the highest value for the land at a public auction.

Councilman Dennis Michael said he, too, had reservations about a public auction.

"I don't know that an auction would get the true value of the property that the county could get in negotiating with the developer," he said. "I support whatever the county does to get the highest value of the land."

Rancho Cucamonga Mayor Don Kurth declined to comment. (909) 483-9376

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