In a move that may mean long-opposed development in Murieta won't get under way for at least six years, the Community Services District has ended negotiations with developers to expand the community's water treatment facilities.
In a letter dated April 28, CSD General Manager Ed Crouse said the developers have indicated they see 2014 as the soonest they would start building, which means work on new CSD facilities wouldn't begin until 2012. "It is impossible to determine the specifications and financing needs for facilities four years in advance of the commencement of construction," Crouse wrote.
The letter was sent to developers representing projects that have been in the county pipeline in recent years -- the Residences of Murieta Hills, at the northwest edge of the community; the Retreats, on North Course parcels near the Country Club's clubhouse; and Murieta Gardens, a mix of commercial development and homes in the area of Murieta Plaza.
"An additional reason for withdrawing from negotiations relates to the uncertainty as to which entities are participating in the negotiations process," the letter said. "Reynen & Bardis, which represents 239 units, withdrew from (the talks) in November of 2007 and is not willing to execute on (an agreement) any time soon." R&B's projects, called Lakeview and Riverview, would complete development of the South.
The letter raises a development possibility that hadn't come up in years -- land near the North Gate known as Parcel One, which is zoned for apartments and has been designated as a low-income housing site by the county. Crouse's letter said a representative of property owner Frank Stathos attended the most recent negotiation meeting, April 21, marking the group's first appearance in years, "but it seemed that their attendance was in an informational capacity only."
Crouse added, "The representation for many of the developers has also been in a state of flux, which has made progress even more challenging. Until the developer group, as well as the representatives participating in negotiations, stabilizes, the successful negotiation of an (agreement) seems improbable to the District."
Crouse wrote that the talks, which had gone on for years, will have to begin again.
"...It is my assessment that we no longer have consensus on any major point," he wrote, "notwithstanding the fact that we were on the verge of executing a final agreement in November of 2007. In short, we are starting over. At this point in time, the District will be better served by focusing its limited resources on more immediate and pressing endeavors."
The CSD's water treatment facilities and infrastructure must be expanded to accommodate any new development. Since the 1990s, the CSD's stated philosophy has been that development must pay for facilities in advance of CSD construction. The just-ended talks were about financing the expansion. It's estimated the construction will take 18 months to two years.
When the Pension Trust Fund, the original developer of the community, left the negotiating table in 2006, the CSD modified its approach and broke its view of future development into three phases. The first phase is addressed in Crouse's letter. The second phase includes PTF land and the former school site on Escuela. The final phase would be the relatively recent proposal called Murieta West, which brings into play land inside and outside the western edge of the community.
Developers don't want to pay for future capacity, so the CSD divided water treatment improvements into segments to serve the three development phases. With expansion for the first phase of development, the CSD planned to retire some of the community's original treatment facilities, now 30 years old.
Here is the full text of Crouse's letter:
Thank you for meeting with us on April 21, 2008 and for your candid comments regarding the District's most recent proposal relating to the structure for the Financial Services Agreement. After discussing your comments with President (Wayne) Kuntz and Director (Bob) Kjome, I have determined that it is not in the District's best interest to continue the negotiation process at this time and for the foreseeable future. Therefore, please be advised that the District is hereby withdrawing from negotiations with the owners of the Retreats, Residences-East, Residences-West and Murieta Gardens Commercial and Residential projects relating to a Financial Services Agreement (FSA).
The District's primary reason for withdrawing from negotiations is due to the developers' indication that the need for new service connections will likely not occur until as late as 2014, which would mean that the construction of new or expanded facilities would not commence until 2012. It is impossible to determine the specifications and financing needs for facilities four years in advance of the commencement of construction. Similarly, there may be new projects approved or dropped which will necessitate renegotiating the FSA and/or redesigning the new or expanded facilities.
An additional reason for withdrawing from negotiations relates to the uncertainty as to which entities are participating in the negotiations process. Reynen & Bardis, which represents 239 units, withdrew from FSA negotiations in November of 2007 and is not willing to execute an FSA any time soon. At the last meeting, a representative of the Stathos property (160 units) attended for the first time after many years of meetings, but it seemed that their attendance was in an informational capacity only. The representation for many of the developers has also been in a state of flux, which had made progress even more challenging. Until the developer group, as well as the representatives participating in negotiations, stabilizes, the successful negotiation of an FSA seems improbable to the District.
Finally, the District has been engaged in negotiations with the developer groups for many years and has invested much time and resources in the process. After considering the comments made at the last meeting, as well as the discussions over the past several months, it is my assessment that we no longer have consensus on any major point, notwithstanding the fact that we were on the verge of executing a final agreement in November of 2007. In short, we are starting over. At this point in time, the District will be better served by focusing its limited resources on more immediate and pressing endeavors.