May 20, 2005

County Buying Tax-Delinquent Mountain Lots

Redevelopment official cites need for complete infrastructure study; project foes are skeptical

Old Fire of October 2003

The Alpenhorn News
by Glenn Barr

In a move sure to trigger suspicion among local property owners, the San Bernardino County Redevelopment Agency quietly signaled its intention Friday to buy up 134 tax-delinquent residential lots in Cedar Glen rather than allow them to be sold to the highest bidder.

Assistant Tax Collector Dennis Draeger told The Alpenhorn News on Tuesday that the Redevelopment Agency had filed with his office on the eve of the scheduled, semi-annual tax sale a request for what’s called a Chapter 8 sale. The request means that ownership of the lots in the Old Fire-ravaged community will pass to the agency – whose governing body is the County Board of Supervisors – rather than individual buyers, including Cedar Glen residents wishing to rebuild their devastated homes larger than before.

Under a Chapter 8 sale, Draeger said, a government agency may request that properties scheduled for tax sales be sold to the agency instead, to satisfy a public purpose, as required in the California Revenue and Taxation Code.

“We don’t have the authority to deny that request,” said Draeger. “We have no choice.”

John Nowak, manager of the Redevelopment Agency, identified the public purpose of the lots as possible sites for infrastructure upgrades in the Cedar Glen Redevelopment Area project, which the Board of Supervisors initiated last fall.

Many Cedar Glen residents have questioned the involvement of their County representative, Supervisor Dennis L. Hansberger, in the redevelopment project, noting that Hansberger’s parents, who are in their late 80s, are part owners of land adjacent to the project area, land that could skyrocket in value once the redevelopment and its infrastructure were in place.

Though the supervisor’s father, Leroy Hansberger, has revoked his son’s power of attorney on the land holdings, skeptical opponents of redevelopment say Dennis Hansberger still stands to inherit the land, along with his brother.

The upgrades, Nowak said, would likely include new roads, widening existing roads for emergency vehicle turnarounds, water pipelines and even a reservoir.

By purchasing the lots, the Redevelopment Agency could end the ability of some Cedar Glen residents to rebuild their fire-ravaged homes any larger than they were by denying them the ability to merge their tiny lots with adjoining properties. They can rebuild on existing lots if the new house is fully within the lot boundaries and if it has a septic tank.

Though by having a public purpose Nowak’s explanation for his agency’s action apparently meets the test of state law, some community residents are not satisfied, seeing the move instead as a way for the county agency to acquire land for redevelopment easier and faster than through the cumbersome eminent domain process. Others interpret the move as an example of the county’s disregard for their wishes about rebuilding.

Redevelopment Agency ownership of the lots could also slash the overall cost of the project by allowing public acquisition of more than one-fifth of the community’s lots at the cost of unpaid taxes plus administrative costs, rather than at fair market value.

Draeger and Kelly McKee, the tax sale supervisor for the Treasurer-Tax Collector’s office of San Bernardino County, said the Redevelopment Agency can buy the lots for the minimum bid, which equals the amount of unpaid taxes plus fees. In most cases that figure ranges from $2,000 to $5,000, they said, meaning the agency might be able to acquire all the properties for a sum ranging from $268,000 to $670,000 – far less than would have to be paid if they had first been sold to private owners.

In a redevelopment district, the governing agency acquires properties from their owners at fair-market value, through a process called eminent domain, and then makes them available to developers contracted to build housing and other facilities within the district.

Every May and August, properties throughout the county on which taxes are at least five years in arrears are offered for sale to the highest bidder by the Treasurer-Tax Collector’s office, over the Internet. The current week-long sale began May 13 and runs through Friday. The Cedar Glen properties were removed from the sales list on Friday, May 13. Owners with overdue taxes had until May 12 to pay the arrearages and redeem their lots.

Nowak told The Alpenhorn News on Tuesday that the Redevelopment Agency requested the removal of the Cedar Glen lots so a “full analysis” of the properties could be conducted by the county to determine their suitability for meeting future infrastructure needs for the Cedar Glen Redevelopment Project.

Specifically, he said, roads will be needed for the project, as well as turnarounds for fire trucks and other emergency equipment. Water-system improvements will also be needed for the redevelopment, he said, including pipelines and possibly a reservoir.

Nowak said he hopes the property analysis can be completed “in just a few months,” after which lots the redevelopment agency has determined it does not need can be sold to the highest bidder. However, Draeger called the processing of a Chapter 8 request “an elaborate process” and said it could take up to 12 months for the Redevelopment Agency to acquire the property.

First, he said, the Treasurer-Tax Collector’s office will put together the require documentation, and the Board of Supervisors will have to approve the request. Then it must receive approval from the State Controller.

“We didn’t have time to do a detailed analysis, parcel by parcel,” Nowak said in response to observations by some community residents, skeptical about the redevelopment plan, that many of the lots are steep and not appropriate for building roads or other infrastructure.

The Alpenhorn News learned of the Redevelopment Agency’s action from Dave Stuart, executive director of Rebuilding Mountain Hearts and Lives (RMHL), an organization formed to help victims of 2003’s Old Fire to rebuild their homes. A total of 336 homes were destroyed in Cedar Glen by the arson-caused fire.

Stuart said he learned of the action from a Cedar Glen resident named Sue Bowen who, along with her husband, had been trying to buy one of the lots adjacent to a lot they own on which the house was burned.

Contacted by this newspaper, Bowen said she had tried to buy the lot on Eucalyptus Road last year but was outbid. However, “the buyer didn’t perform,” she said, so the lot was returned to the sale list. Bowen and her husband were ready to bid when the sale opened Friday, only to discover, to their disappointment, that it was missing from the list, along with all other delinquent Cedar Glen lots.

Stuart said Cedar Glen properties can be identified on the tax-sale section of the Treasurer-Tax Collector’s web site by the four-digit numerical prefix “0330” or “0331.” A check Monday evening of the still-available properties revealed no properties with either prefix.

Bowen said she and her husband lost three houses in the Old Fire, one their residence and two they hoped to fix up and rent. Since the fire, she said, they have purchased a Cedar Glen home that survived the blaze, but still want to rebuild the homes they lost.

“I just feel this is kind of a dirty trick,” Bowen said. “Cedar Glen properties should stay with Cedar Glen people, and not be given to some developer.”

She said her attitude toward the proposed redevelopment project – which is expected to allow 2,000 homes, though the community is zoned for up to 4,400 – began to change at a Board of Supervisors meeting last November where the project was discussed.

Bowen said she witnessed two women, one a senior citizen, “dragged away in handcuffs” while voicing their concerns.

“That changed my whole idea of what these people (county officials) are capable of,” she said. “They don’t want to hear us. I don’t think they have our best interests at heart.”

Bowen noted that it’s been more than 18 months since the Old Fire, “and we don’t even know what the redevelopment plan is. Something stinks.”

But even slashing the project’s density by more than half, from 4,400 to 2,000 homes, still represents a threefold increase in Cedar Glen’s residential density. Just before the fire, Stuart said, there were 709 residential water connections serviced by the Arrowhead Manor Water Company, Cedar Glen’s water supplier, which is now in receivership. Of that number, 637 connections were active.

Because of the shaky financial state of the community’s water supplier, the future of water service in Cedar Glen is a topic of intense interest to property owners. Stuart said RMHL has commissioned a wide-ranging independent study of Arrowhead Manor and other water-supply options for Cedar Glen, along with the costs of each.

The contractor performing the study, San Bernardino-based Engineering Resources of Southern California, will complete the study this week and present the 20-page report at an RMHL-sponsored public meeting this Saturday at 1 p.m. at Lake Arrowhead Community Presbyterian Church on Highway 173.

In a telephone interview, Nowak declined to comment on the fate of Arrowhead Manor or how water might be supplied to a redeveloped Cedar Glen, saying only that that issue “is being addressed in the EIR (environmental impact report).”

Meanwhile, a recent occurrence that may complicate water-related decisions for Cedar Glen is the mailing of a May 12 letter to Cedar Glen property owners by Thomas L. Sutton, director of San Bernardino County’s Special Districts Department.

Sutton’s letter describes a proposal by Supervisor Hansberger to form an “improvement zone” within existing countywide County Service Area 70 to provide roads and water service for Cedar Glen.

The letter says forming the zone could result in public acquisition of Arrowhead Manor, which he said currently owes more than it is worth. If the water system were publicly owned, Sutton said, it would be “operated independently under my office. We have approximately 20 other water and sewer districts under our control, and this would just be another.”

The biggest benefit of forming the improvement zone, Sutton said, could be the potential for federal grant funds to finance some of the project’s infrastructure, including upgrading the water system “to a public standard.” Doing so would give the system sufficient pressure to fight fires without assistance from other water agencies.

Sutton said the zone’s formation could upgrade Cedar Glen’s road system and enable the county, with property owners’ consent, to provide an agreed-upon level of road service – like snow plowing, culvert repairs and maintenance – for a set price each year, payable on the owners’ tax bills. A similar arrangement exists in Cedarpines Park.

As dramatized in the Old Fire, one of Cedar Glen’s biggest needs may be an alternate exit route, other than Hook Creek Road, the long cul-de-sac serving much of the community. Sutton said the County Public Works Department’s transportation section is analyzing Cedar Glen’s road system and will recommend specific needs to the Redevelopment Agency.

“I can’t imagine that an alternative route wouldn’t be included in that report,” Sutton said.