San Juan Capistrano: Stop Subsidizing the for-profit Rancho Mission Viejo Riding Park!

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Blenheim Equisports: “Privatizing the Profits, Socializing the Costs.”

ATTENTION SAN JUAN CAPISTRANO VOTERS, TAXPAYERS AND RESIDENTS!  Your Council, which meets again on Tuesday March 16, will be making some big decisions on the future of the Rancho Mission Viejo Riding Park, which has been a corrupt and polluting burden on us for well over a decade.  Here is an open letter your neighbor Kim McCarthy recently sent to the Council, with all the background info you need printed below.

Thank you, Councilmember Troy Bourne, for leading the way to open up the bidding at the Eastern Open Space. Finally a wise business decision made on behalf of the residents of San Juan regarding this property!  Hopefully the open bidding will bring some great opportunities for families to begin to use this property as well as garner revenue for our city.

Councilmembers, a recent Register article also states, “The city has committed to spend about $2 million to stabilize creek banks and complete the removal of an un-permitted crossing between the park and riding area.

This is outrageous, to say the least!  Blenheim Equisports’ actions destabilized the creek banks, and directly discharged horse waste and gray waste into San Juan Creek, all while operating without a permit.   Why would you obligate us taxpayers to pay for what Blenheim did, and is contractually required to fix?

Councilmembers, think of it this way: would you continue to rent your family’s home to the very renters who severely damaged your property, and refused to make the repairs per their contract with you, culminating in a lawsuit which ultimately cost you millions?

Assuming the answer is NO, why are you considering making this decision on behalf of your constituents whom you took an oath to represent?

Furthermore, please detail for residents what is being done by the city to collect the millions of dollars The Riding Park / Blenheim owe to San Juan taxpayers?

In lieu of transparency, and checks and balances in fair governance, your answers will be published on the Orange Juice Blog.

Respectfully,

Kim McCarthy,  20-year resident and former publisher of Community Common Sense.

BACKGROUND

The Register recently printed a piece, largely a puff piece, about the long travails of the Rancho Mission Viejo Riding Park, entitled “San Juan Capistrano Lets Non-Equestrian Operators Bid to Operate Riding Park.”  This Riding Park, on land acquired by the city of SJC with the help of then-Supervisor Pat Bates, is a classic OC boondoggle negotiated “on the City’s behalf” by former Sheriff Brad Gates, to the total benefit of billionaire South County Mega-Developer Tony Moiso.  Very few SJC voters and taxpayers who have been subsidizing this park for over a decade even know it exists, let alone can they afford to use it.

And this was before the Parks’ POLLUTION OF OUR WATER became such a problem.  The first photo in the Register story bears a caption claiming the City wants an operator to “help finish improvements required for preventing runoff into the nearby creek.”  No, these are NOT “improvements.”  They are MANDATORY FIXES (mandatory if the owner, Blenheim Equisports, wants to continue to operate their private business on our Eastern Open Space.)  And these fixes are mandated by a ruling stemming from a 2017 lawsuit by Orange County Coastkeeper (their largest lawsuit to date – $2.9 million) at the direction of the San Diego Water Board.  

Some of us humble “Swallows” were actually the whistleblowers instigating that lawsuit!

You Orange County readers, we understand, know nothing about this – hell, most SJC voters know nothing about it.  The unfortunately out-of-print  watchdog newsletter Community Common Sense wrote a lot about it, and here are a couple of  their more informative pieces below:  

From CCS, April 2018 Cover Story

Riding a Mountain of Debt

by Jim Reardon, April 2018

The City of San Juan Capistrano has borrowed $58.5 million related to the RMV Riding Park, almost double the amount authorized by voters in the 2009 Open Space measure.  The excess cost of this borrowing is a $1.86 million annual interest charge that is quietly being paid from the city’s general fund, apparently with the consent of the council majority, who are publicly silent on the matter.

In 2009, voters authorized the city to issue $30 million in tax-exempt bonds for the purpose of “Open Space” within the city, guaranteeing repayment of this debt, with their homes and property within SJC.  An ad valorum tax appears on annual property tax bills to cover the cost of the original borrowing.  The city then secretly used $27.5 million from the bond proceeds to purchase the Riding Park, a parcel that was actually outside the city limits at the time the purchase was negotiated and announced to the public.

Purchase of the Riding Park brought with it a relationship with Blenheim, the private promoter of the equestrian events that occur at the location.  Blenheim exclusively provides management and maintenance of the facility in a business arrangement that has been called into question by city staff.  The tax-exempt bonds used to purchase the land provide benefit to a private for-profit business, an arrangement that is contrary to IRS regulations and threatens the tax-exempt status of the original bonds.

After eight years of behind-the-scenes disagreement as to the legality of the Blenheim relationship, the city council quietly authorized the issuance of taxable bonds to replace the original tax-exempt debt.  Taxable bonds are costlier to repay compared to tax-exempt bonds, but in the low-interest-rate environment of the time, the new taxable bonds were less expensive than the tax-exempt bonds.  Nevertheless, the new bonds exceed the $30 million amount authorized by the voters in 2009, and specifically do not comply with the voter-approved ballot measure which requires the city to authorize tax-exempt bonds to finance Open Space.

In April 2017, the city issued $28.5 million in “advance refunding” taxable bonds pledged directly against the original 2009 voter authorization, and deposited the proceeds into a special account.  However, the original tax-exempt bonds remain outstanding, and will remain so until August 2019, when the original bonds are eligible to be repaid.  In the meantime, interest costs of $150,000 per month for the new bonds is being paid from city coffers, further aggravating the city’s oft-mentioned structural deficit.

All of this is an elaborate scheme to finance a for-profit enterprise at taxpayer expense.

No matter how much prestige or benefit the equestrian events bring to the area, the blatant disregard of voter-approved ballot language and abuse of debt guaranteed by taxpayers is unconscionable.  The silence of councilmembers Reeve, Ferguson, Marryot and Farias (Pam Patterson has consistently voted “no”) signals their complicity in this scheme.

“Eastern Open Space,” annotated map

From Community Common Sense, April 2018

The map below illustrates the result
when cronies are given carte blanche to spend taxpayer dollars.

In 2008 SJC Councilmembers Mark Nielsen, Sam Allevato, Lon Uso, Tom Hribar & Laura Freese convinced taxpayers to tax themselves $30 million to protect open space.  The result was what two-time former Mayor Dr. Roy Byrnes called “the worst real estate deal in San Juan history.”

Next they allowed private citizens Brad Gates, Dick Paulsen and Tom Lunnen to negotiate purchase of property outside city boundaries, exempting them from filing the required conflict of interest forms – despite Gates’ longtime business dealings and personal relationship with the seller, Rancho Mission Viejo Company CEO Tony Moiso.

San Juan Creek bed – federally “protected,” supposedly.

Behind closed doors the Council then approved the negotiated property restrictions and dictated uses specified by the seller.

HALF of this property was ALREADY protected open space.  A private business, Blenheim, monopolizes the most usable acreage at taxpayer expense.  A recent study reported only 8% of SJC residents ever visit the riding park.

Due to the City’s lack of due diligence in acquiring and maintaining this property, the San Diego Water Board notified the City about their lack of compliance in protecting San Juan Creek from continued pollution.  City administration’s repeated failure to comply over an 18-month period prompted non-profit environmental protection organization OC Coastkeeper to file a lawsuit.  The City is now at risk of being fined up to $55,000 per day dating back to 2006, for polluting Federal Waters.

Taxpayer-funded costs continue to add up on the “open space,” a few of which are noted below, as annotations to the above map:

1.  14,000 residential units being built across the street from the “open space” on the other side of Ortega Highway (in “Sendero,” as indicated), and across Antonio Parkway and La Pata.

PVC pipe for the purpose of draining HORSEWATE into our creek.

2.  “Reata Park” is the only other usable parcel in the open space.  Although it is rarely used, taxpayers were charged $575,000 on a road and signal leading from Reata to the Ranch’s development across Ortega.

3.  2.4 acres adjoining Reata Park were previously leased to a developer who built 35 homes on the former Oaks site.  City leased it to developer for $4800 per year while taxpayers paid approximately $35,000 in interest on the property.  Developer reportedly leased approximately 9 horse turn-outs for $1000 a month. City administration is still refusing to open up the property to the public for equestrian use.

4.  Development has begun on 5 million square feet of retail / commercial approved on the Ranch property across the street from the “open space.”  Gelson’s supermarket and other stores are already impacting SJC merchants.

5.  The “Riding Park” is the most usable parcel in the “Eastern Open Space.”  At 70 acres, it comprises about half the 132 acres of open space, but has been leased to a private commercial equestrian business.  SJC taxpayers are severely restricted from using it. 

More polluting PVC pipe.

6.  Blenheim has been allowed to operate without the required “Concentrated Animal Feeding Operation” permit.  Runoff from the Riding Park, including from horse wash stations on San Juan Creek, triggered a lawsuit for polluting the federally protected creek.  Cost to restore damage to the creek is unknown.

7.  Councilmembers Reeve, Maryott, and Farias voted to spend more than $800,000 installing unnecessary water/sewer line at Riding Park.  Although Blenheim’s contract required them to provide their own utilities (including water), sewer line is being installed to remove Blenheim’s waste water.

8.  Per the purchase agreement and county maps, San Juan Creek is to be put through to connect to La Pata.

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POWERPOINT:

A tour of Rancho Mission Viejo Riding Park

at San Juan Capistrano’s “Eastern Open Space”

Health & Safety Issues

Potential Fire Hazards

Long-term Tenancies / Sub-letting

Hazardous Waste

Other Prohibited Uses

Preferential Access

Revenue Considerations

Community Common Sense

Community Common Sense was published by concerned residents from 2009 -2018. We did not make money; we spent our time and our own money to get the information out to residents.  We were harassed, bullied and threatened, along with frequent character assassination, by those whose personal agendas were dependent on council majority votes.  Below was our mission statement:

“The CCS is a non-partisan community watchdog publication, distributed to homes and businesses in our local communities.

We were established in 2009 by a group of residents who recognized that tax dollars are often spent in ways that enrich a select few, while average residents are left with the resulting increases to cost of living, traffic and debt.

We believe knowledge is power, and are committed to reporting facts not offered in other publications. Aided by Public Records Act requests for information and extensive research, we print fact-based information about fiscal and quality of life issues which enables residents to make educated decisions.”

For more on the Riding Park, see:

CCS April 2018, Riding a Mountain of Debt (cover story)

 Eastern Open Space (maps/facts pages 4,5)

CCS November 2017, Council Members Approve $800,000 “Unnecessary” Water/Sewer Line at Riding Park, Despite Federal Lawsuit, Lack of Permit (cover story)

CCS September 2017, Blenheim’s Equestrian Business Operating Without Permits, Exposing Taxpayers to Fines

The Pollution of San Juan Creek is NOT ABOUT HORSES ( Guest column page 3)

Undoing Damage to San Juan Creek Could Take Years (pages 4,5)

CCS June 2017, City Sued over Riding Park, San Juan Creek Violations

Whistleblowers Allege Retaliation for Filing Code Violation Complaints (page 1)

SJC Equestrian Coalition “Economic Study” Questionable at Best (Guest Column)

CCS November 2016, City’s Failure to Resolve On-going Code Violations Prompts Calls for Action

City Manager; a 9-Month Review (page 5)

CCS April 2016, City Considers $500,000 Water Line to Riding Park Property


About The Swallows

Concerned citizens of San Juan Capistrano who've been raising hell down there for decades.