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Hesperia Denies Extensions of Time on 4 Projects Totaling 350 Homes; Builder Claims Mistreatment, Says ‘Battle Lines are Clear’

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HESPERIA, Calif. (VVNG.com) — Two homebuilders planning to construct a total of 350 homes were denied extensions of time by the City of Hesperia, killing their existing plans altogether.

The denial came as a result of the new Ballot Measure N, which was approved by City voters in November 2020, which says “no extensions of time are allowed for residential subdivisions,” the City said.

“As a result, there is no mechanism in the Development Code that authorizes an approval process for any extensions of time. Furthermore, the Development Code may not be modified to allow for such an approval process,” stated the City’s Senior Planner, Ryan Leonard.

Pacific Communities Builders, and NV Hesperia Investors & Dayco Funding Corporation, each had representatives appear in front of the City Council last week, December 20, 2022, to request that the City Council overturn the previous denials, and to allow the projects to advance forward.

“I would ask that you potentially consider a continuance to ask the City engineer to deem this map timely filed, and possibly set aside a disagreement that’s going to go far beyond the letters that have been submitted to you,” said a representative with Pacific Communities Builders during the hearing, which three of the four projects that were denied, belonged to them.

According to the builder, two “voluminous letters” were sent to the City on behalf of the company’s outside counsel prior to the hearing.

At the hearing, Pacific Communities Builders told City Council Members that the company felt mistreated, saying, “to say we were mistreated in the plan check process is an understatement,” adding that they were imposed on with last-minute changes, and tight deadlines.

Despite both homebuilders pleading for an extension of time, the Council Members voted to uphold the denial, making the denial final at the City level.

Having exhausted all their efforts to appeal the decision within the various City boards, the next option would be to seek higher authority such as a judge.

Project #1 – Pacific Communities Builder

The first project that was denied is located at the southeast corner of Muscatel Street and Afton Avenue.

The Tract was originally approved on December 9, 2008, and included a subdivision of 5 gross acres into 17 single-family lots, with the smallest lot being 7,202 square feet, the largest lot being 13,337 square feet and the average lot size being 8,522 square feet, according to City documents.

The approval in 2008 was for three years, and the tract was automatically extended by the State for 6 years, and then it was extended by the City in 2018 for an additional three years. The map was set to expire in 2020, but it was then automatically extended by the State again for 18 months, and that automatic extension was the result of the economic challenges of COVID. 

(Project 1- located at the southeast corner of Muscatel Street and Afton Avenue – Pacific Communities Builders)

With regards to plan checks and processing, the applicant, Pacific Communities Builder, originally submitted grading and improvement plans to the engineering division in September 2020, the grading and improvement plans were reviewed and returned to the applicant on 5 separate occasions, the City said.

“The fifth and final plan check was returned to the applicant in June 2022 and the map officially expired on June 19, 2022,” said Mr. Leonard on behalf of the City.

“Prior to that expiration date, the applicant submitted their application for an extension of time, and the extension of time was denied by the DRC on June 29,” said Mr. Leonard. “As I mentioned earlier, neither the DRC, planning commission, or city council have the authority to approve an extension in time.”

The City’s Senior Planner said that another option would have been a development agreement, but the passing of Measure N now puts that in conflict.

“And I do want to point out that while City Council does not have the authority to approve the extension in time by itself, the City Council is authorized to enter into a development agreement that could theoretically extend the life of the tract, however, it’s important to know that the applicant has not submitted an application for a development agreement, and a development agreement is not being considered tonight,” stated the Senior Planner.

“I would point out that the development agreements are almost always approved at the same time as the original entitlement, and in this case, it would be extremely rare for a development agreement to be approved 12 or 13 years after the original approval, in addition, it would be in conflict with measure N, which was approved by a majority of the voters,” he said.

Ron Freeman, the representative with Pacific Communities Builders said the company completed all the efforts with regard to engineering, but costly changes

“Mr. Leonard mentioned that we went through a number of plan checks. Bear in mind, this is a 17-lot tract, so I wouldn’t expect a lot of plan checks. Nevertheless, in plan check #4, we waited four months to get a response back from the City. All the while knowing that our map was ending towards its expiration date,” said Mr. Freeman, “When we got this fourth plan check back, it completely re-drew road geometry up to a thousand feet outside the boundary of our tract. We were left with no choice but to try to address this issue, that cost for me probably will be $200,000 plus yet we did it anyway to try to meet the deadline the city was imposing on us in terms of completing the map before the expiration date. 

Mr. Freeman said the plans were re-submitted back to the City in mid-May of 2022.

“We were waiting patiently to hear back from the City, we were told we could submit our bond estimates in early June which we did, all the while expecting to receive our subdivision bonds and the subdivision agreement that we could submit back to have met all of the conditions for recordation of this tract map,” Freeman said, “This complete road change, of course, was absolutely unexpected of us, and it comes from a Caltrans manual, it could have been sent to us in the very first plan check but was not. Clearly, in the 5th plan check, a complete road geometry change for a 17-lot tract has some other idea behind it, than making the roadway better for these small lots.” 

The builder said, “We’re trying to figure out why we can’t get the bonds and give you the surety to allow this map to go forward.”

The builder pleaded with the Council Members for a continuance to allow time to ask the City Engineer to deem the map timely filed “on a yes or no basis.”

“If he determines yes, we can go forward, if he determines no, the battle lines are clear, and we’ve already given you all the information that we need to tell you about how we moved forward in good faith to get this map right to the finish line,” stated Mr. Freeman.

“We’re looking to try to solve issues here, not create them. But they’ve been created for us, and we need to make sure that we can defend our property rights,” Mr. Freeman said during the public portion of the meeting regarding the first project.

Background of Project #2 – Pacific Communities Builder

In regards to project #2, on November 8, 2022, the planning commission voted 2-1 to uphold the DRC’s denial of the second extension of time.

( Project #2 – located on the northwest corner of Palm Street and Fuente Avenue – Pacific Communities Builders)

The Tract was originally approved on December 9, 2008, and includes a subdivision of 10 gross acres that was to be divided into 33 single-family lots, located on the northwest corner of Palm Street and Fuente Avenue.

The smallest lot size planned was 7,200 square feet, and the largest lot was noted as 16,521 square feet, with an average lot size of about 8,456 square feet.

Approval in 2008 was for three years, the tract was automatically extended by the state for 6 years, and then it was extended by the City in 2018 for an additional three years.  It was set to expire in 2020, but it received an automatic 18 months extension from the state. As a result of that extension, the tract was set to expire on June 19, 2022.

With regards to plan checks and processing, the applicant originally submitted grading and improvement plans to the engineering division in September 2020, the grading and improvement plans were reviewed and returned to the applicant on 4 separate occasions. The fourth time the plans were returned to the applicant was on June 2022 then the map expired on June 19, 2022, according to the City of Hesperia.

Prior to that expiration date, the applicant submitted their application for an extension of time, and the extension of time was denied by the DRC on June 29, 2022, the City confirmed.

“Tract 15033 is a 33 unit which went through 4 plan checks, was approved by the engineering department and we were given bonds and subdivision agreements to execute which we did in good faith. Those were presented back to the City and we were told because one offsite greeting permission letter had not been received, that the map was not timely filed,” said Mr. Freeman.

“We certainly disagree with that in its entirety, we, in reliance upon the approved plans, which state that the actual area of permission to grade needs to happen at grading permit, and not at map recordation,” Mr Freeman said. “We made a commitment, a $5 Million surety that the City holds now, that cost me $40,000 to have issued, that’s money that’s gone, and you hold the rights to build the streets in this subdivision, but you won’t let me subdivide it to build houses.”

The builder’s representative also made accusations against the City of purposely changing the flow of water to collect fees.

“The very first plan check we had on this tract, we put in, as Ryan said, and when we got it back, we were told that we had to drain the tract in an entirely different direction, against the natural flow of the region, we hemmed and hawed at trying to figure out why that was, and we ultimately figured out that City Engineer Mike Thornton decided to change the gradient and the drainage of this tract so the stormwater would, instead of flowing easterly, flow northerly into the City of Hesperia, and would then be an argument for him to place in the storm drain fee program that you have instituted here where this tract didn’t drain into the tributary where you charge the fee,” said Mr. Freeman.

“To say we were mistreated in the plan check process is an understatement, we had to spend $75,000 to convert the tract, from what it had originally been approved to without any assurance that that would ever be considered a tract consistent with the original approval,” stated Mr. Freeman. “Yet we did it in good faith. You took our bonds, you’ve told us the plans were approved, and now we can’t get a subdivision. Once again, we’re stuck and we’re going to be in a very contentious position on the very same issue of timely filing. This time you hold our securities.”

Background of Project #3 – Pacific Communities Builder

The third project is located on the southwest corner of Verde Avenue and Topaz Avenue.

Originally approved on June 17, 2008, the 20 gross acres were to be subdivided into 123 single-family lots. The approval in 2008 was for three years, the tract was automatically extended by the State for 6 years, and was extended again by the City in 2016 for two years and again in 2019 for three years, as a result of those extensions the tract was set to expire on July 31, 2022, the City said.

The Small Lot Subdivision Ordinance requires a minimum lot size of 3,000 square feet and an average lot size of not less than 4,500 square feet. The smallest lot within the subdivision is 3,948 square feet, the average lot size is 4,542 square feet, and the largest lot is 9,009 square feet in area. Only two lots are over 7,200 square feet, per City docuements.

(Project #3, located on the southwest corner
of Verde Avenue and Topaz Avenue- Pacific Communities Builders)

In March of 2022, the builder submitted grading plans and improvement plans to the Engineering Division for plan check. The grading plan and improvement plans were reviewed and returned to the applicant with corrections.

The builder attempted to submit revised plans shortly after the July 31st expiration date but was told by the City that the tentative tract map was determined to have officially expired, City documents showed.

Days before the expiration date, on July 27, 2022, the builder submitted an application for an extension of time and on August 10, 2022, the Development Review Committee denied the extension on the basis that the request was in conflict with Measure N.

Mr. Ryan Leonard said when the project was originally approved back in 2008, the City had since adopted a new general plan in 2010, which modified the land use of the project.

“Well that designation would restrict residential uses in the zone, the City still honored the original track approval. And had the tract been approved, the City would have done a staff level zone change to correct what was likely an administrative error,” said Leonard during the appeal hearing. “But that error in the zone change, or the zoning on the map, is likely probably a mapping error. But that error did not hold up the review or the plan check turn around times.”

However, the Pacific Communities Builders claimed that their project is under a moratorium and disputed claims that the zone change was an administrative error.

“As Ryan indicated, the map was approved in 2008. His reference to his own change in 2010 is incorrect. Four months after our map was approved, the City came forward with the Main Street Corridor Specific Plan, and that’s the document that rezoned the 10 acres from residential to the office park,” stated Mr. Freeman.

“At a later when this map was extended, additional conditions were added to this map, and one condition says this whole tract is contingent upon the City processing a zone change to correct the Office Park Designation, which never happened until late last year when the City came forward to ask to change that 10 acres as a part of a 35-acre zone change,” said Mr. Freeman.

“We were added to that because that was going to create the issue of giving us back that 10 acres that we property rezoned in 2008, at the Planning Commission [meeting] the Commission approved the zone change but we did not agree to the 1/3 acre minimum lot size calculation, [but] for a minimum of 7,200 square foot lot as a part of that approval, and it was sent on to your body for adjudication. 

The builder said that in early 2022, the zone change was denied, leaving them stalled in their project.

“So it’s impossible for us to go forward and map our property. There was no mapping error, it was created by the City, it hasn’t been corrected by the City, and we’re prevented from developing our property at this point because of that, that moratorium easily exists for a maximum of five years that will be allowed, and we’re asking for a map extension based on that basis. I’m not looking for any timely filing, we’re still working to engineer that map, and this maps 123 lots, so it’s a big one. We need to somehow come to a resolution to move these maps forward,” said Mr. Freemen, while speaking on behalf of the company’s third project that received denial Tuesday.

Background of Project #4 – NV Hesperia Investors & Dayco Funding Corporation

Finally, the last to appear in front of the City Council regarding extensions of time were two representatives on behalf of NV Hesperia Investors & Dayco Funding Corporation.

The original project was approved on July 9th, 2009, and is a 40-acre piece of land, subdivided into 177 single-family lots. The first extension was for three years, followed by a 4-year extension,  and again in 2016 and 2018 for 18 months.

(Project #4 – The project is located on the southwest corner
of Mojave Street and Topaz Avenue – NV Hesperia Investors)

The first map was first received by the City in April 2020, and it was sent back for corrections a total of 5 times. In August of 2022,  the applicant submitted the 5th map, which did not require any corrections, but the company had to provide bonds, which they did not submit bonds, the City confirmed.

“The applicant inquired about submitting a development agreement, but was told that it wouldn’t work because the agreement is always approved at the time of initial approval, which conflicts with Measure M,” said Mr. Leonard, as he presented the final hearing case to the council members.

Two representatives from the company were present, and each spoke in front of the council during last week’s hearing.

“Our first final map was submitted, on July 27, 2022, and we delivered all required documents except for bonds to the City. On August 17, we were given the bond requirements by City Engineering and they were for $13 Million, and they gave us 4 days to deliver $13 Million worth of bonds, obviously, we could not do that, but we delivered to them the signed Improvement Plans, the Subdivision Improvement Agreement, and the Monumentation Bond, on September 6, we delivered to the Engineer Department those items, and on September 7 we received a denial from the DRC,” the builder’s representative said.

The properties Attorney-In-Fact, who has Power of Attorney and represents ownership of the property also spoke in front of the City Council. 

“I just want to confirm that our position was stated in a letter on November 28, 2022, that I sent to Ms. Lee, both to the City and to her Law Firm,” the representative said. 

“I just want to emphasize the fact that this one is a little different from the other three, we got 4 days to come up with $13 Million worth of bonds, and we did come up with the bonds, but not in the four days, so the bonds are ready to go. They’ve been underwritten, the fee can be paid in 15-24 hours, and they can be issued,” the representative for the builder stated.

Both representatives on behalf of the builder argued that the deadline was to short.

“But as a matter of practicality and legality and due process, I’m not certain four days is really sufficient for someone to be able to come up with $13 Million in bonds, so I’m puzzled by that, on how that can happen, ” said the representative, “and I think the City actually has the discretion to actually allow the developer to take an ugly 40-acre lot and make it to 177 lots, for homes to be built, and four days was just not enough, and it just doesn’t happen, and there probably was a weekend in between those days.”

The Hesperia City Council Members voted in all cases to uphold the decision to deny the extensions of time, making the City’s decision.

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