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Meeting Date: October 28, 2003

Subject/Title: Report on the Deer Ridge Development - Escrow on 17 Lots without Building Permits

Submitted by: John Stevenson, City Manager

Discuss and provide direction to the City Manager regarding the 17 lots in escrow without building permits in the Deer Ridge Development (formerly SunCal).

On January 19, 1993, Council approved the Tentative Subdivision Map No. 7690.

On April 7, 1998, Council approved a one-year extension for Tentative Subdivision Map No. 7690.

On December 5, 2000, Council amended Condition of Approval Nos. 184, 185 and 186 for Tentative Subdivision Map No. 7690.

On April 7, 2003, Council amended Condition of Approval No. 192 for Tentative Subdivision Map No. 7690, stating that before the 390th building permit was issued, the first nine holes of the golf course must be complete and open to play, and the clubhouse must be constructed and open..

Final Maps for the following subdivisions were accepted by Council on the respective dates:

8253 October 22, 2002
8277 August 28, 2001
8278 September 18, 2001
8478 November 13, 2001
8479 March 26, 2002
8480 January 22, 2002
8481 April 22, 2003
8482 October 22, 2002
8483 October 22, 2002
8484 March 26, 2002
8492 March 12, 2002
8493 June 25, 2002
8494 March 26, 2002
8495 March 26, 2002

At its October 14th meeting, the City Council heard from a real estate salesman concerning his client’s desire to purchase one of the lots in the Deer Ridge subdivisions. The subject lot and proposed home had been sold by one of the developers who purchased several lots from the master developer. His client had hoped and expected the home purchase escrow to close in the near future. The salesman came to the City Council to complain that the City had not, as of yet, issued a building permit for his client’s lot. The salesman, along with his client, made an impassioned plea to the Council to issue the building permit, along with 16 other similarly situated home purchasers, so that his client could move into her future home that she thought she was purchasing.

City staff then researched our files to see if the City was enforcing the approved conditions of approval on the master tentative map for Deer Ridge. Staff’s research disclosed that not only was the number of building permits issued correct, but that staff had returned to the Planning Commission to detail out the trigger points at which time additional permits could be issued.

The key triggers are currently the completion of the park adjacent to the school and completion of the golf course clubhouse. The developers are scheduled to return to the City Manager with a schedule for construction of the City park. That schedule has not been received by the City Manager as of the writing of this staff report. Staff believes that if the developers want to have the park sodded by November 15, 2003 (the key date for the City), it can be done. If the developers return to the City Manager with a schedule that doesn’t meet the November 15 date, that information alone will speak volumes as to the developer’s efforts related to this development.

The golf course clubhouse is a different matter. The City Manager has suggested that one of the developers that has a vested interest in securing more building permits (meaning they are motivated) take over construction of the clubhouse. As of the writing of this staff report, staff has not yet received word on whether that is a possibility or if it will happen. Staff holds a $500,000 certificate of deposit on the clubhouse that both the City Attorney and City Engineer agree can be pulled at any time due to non-performance in completing the clubhouse on time. The problem with pulling the certificate of deposit is that the City would hold the money but have no authority to initiate or accelerate construction of the clubhouse. The City has no rights on the property at all. These actions, if taken, very well might slow the progress rather than speed it up.

Staff has suggested to the developers who purchased lots within the Deer Ridge subdivision that they might consider donating their real estate sales associates’ and brokers’ commissions on the 17 building permits in question.

The first question raised related to this issue was whether the City was negligent in issuing building permits. The answer to that question is that the City has enforced the approved conditions of approval for the Deer Ridge subdivision. Staff has issued exactly as many permits as the conditions of approval would authorize.

The second question is whether the Council would consider directing staff to issue the additional 17 building permits so as not to hurt the 17 families who entered into these escrows in good faith. If the developers who sold homes on lots without a building permit donate their commissions, would that be a sufficient penalty? Staff should stress at this point that if the park is not sodded by November 15, numerous Parks and Recreation programs for next year will have to be cancelled due to lack of playing fields. In staff’s opinion, this is the most important issue to the community.

The Council should also know that the City Manager will write a letter to the Department of Real Estate requesting an investigation into this incident and to take appropriate disciplinary measures for such an incident.


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