OC Planning Department Responds to Public Record Request Re: Rancho Mission Viejo

March 13, 2017

PRESS RELEASE CUSDWatch

RE: OC Planning Department Responds to Public Record Request.

Special Board Meeting March 15, 2017 -The Board is to vote on the approval of the Purchase of the Esencia School Site for $34 million dollars; $2.4 million per acre for 14 acres of raw dirt, without any Entitlements. CLOSED SESSION STARTS at 5:00pm

BACKGROUND:

CUSD Staff is asking Trustees to ratify a resolution to purchase the Esencia K-8 School site (vacant land) for $33.86 million when all documentation prior to the resolution stated that the cost of the land would be $21 million.

Resources:

February 22, 2017 BOT Meeting Agenda at page 252 http://capousd-ca.schoolloop.com/file/1218998819331/1455438848279/5783286778959607327.pdf

CUSDWatch Detailed Background Information: http://cusdwatch.com/index.php/board-meeting-agendas/february-22-2017-board-of-trustees-meeting/agenda-item-10-resolution-no-1617-56-ratification-of-agreement-to-purchase-the-escencia-school-site-and-delegation-to-accept-the-deed

CUSDWatch Appraisal with comments can be found at this link: http://disclosurecusd.blogspot.com/2017/02/appraisal.html

ISSUE I - The Purchase Price of the Land

The proposed scope and cost of the land for Escencia was always projected to be $21 million for 14 acres - $1.5 million per acre.

At the February 22, 2017 BOT Meeting Agenda Item #10 - RESOLUTION to approve the purchase of Esencia school site was presented to Trustees and the Public without a Price.

Members of the Public Requested that the Agenda Item be amended to reflect the purchase price of the land.

The Item was amended by Staff to reflect a Purchase price of $33.86 million - $2.42 million per acre

Members of the public requested that Staff make public the three appraisals that would provide answers as to how the price went from $21 million to $33.86 million

Staff has not made the appraisal available to the Public to date, however members of the Public have obtained a copy of the appraisal; and have studied the appraisal, and have found the following:

There is only one Appraisal of this land.

The appraisal was requested by CUSD and was completed on October 10, 2016.

Staff received the Appraisal October 24, 2016.

Staff did not share the Appraisal with Trustees until February 10, 2017, in preparation for the February 22, 2017 BOT meeting.

Staff placed this item on the CONSENT CALENDAR without disclosing the price.

Staff did not provide Trustees with an opportunity to review the Appraisal prior to this Board Meeting. Had

Staff shared the Appraisal with Trustees in October, Trustees would have had an opportunity to request a second appraisal, and question how the value of the land had increased from $21 million to $34 million.

The Appraisal with PUBLIC comments can be found at this link: http://disclosurecusd.blogspot.com/2017/02/appraisal.html

The Appraisal was based on "highest and best use” - the Appraiser valued this vacant lot as if it had 100 dwelling units on it.

The empty lot contains no entitlements, and in fact the Ranch maintained the right to build these 100 homes in other parcels in RMV.

on page 27 of the Appraisal it shows that the valuation is based on Six sales. Four of the sales closed in 2015 and showed valuations closer to the $21 million dollar figure. Two sales closer to the $34 million dollar figure were pending or future sales.

The Agreement for Purchase and Sale and Escrow Esencia School Site was executed by Clark Hampton on January 19, 2017 WITHOUT BOARD APPROVAL.

The Attorney for CUSD signed his name with an X and a scribble, which is not identifiable.

The People feel that this Agreement was entered into with the intent to defraud the public, and a complaint has been filed with the District Attorney.

CUSD added a Special Board Meeting on February 22, 2017 to disclose this Item in Closed Session.

The Item lists Kristen Vital and Clark Hampton as the "Agency Negotiators" for this purchase.
Neither Clark Hampton nor Kristen Vital are licensed real-estate brokers and were not qualified to negotiate this deal.

A Complaint has been filed with the California Bureau of Real Estate.

ISSUE II: The Number Number of Units Being Built has Increased Substantially (1,406 units) Since 2013 Agreement was Executed, and the Timeline is Much Faster than Anticipated.

The 2013 EIR approved Entitlements for 14,000 Dwelling Units for ALL Planning Areas (up to 6,000 age qualifying units and 8,000 non-age qualifying units) + (60 acres of Affordable Dwelling Units) + 5,000,000 square feet of non- residential, commercial use. Expected timeline was 25- 30 years.

The 14,000 is a total cap, but the mix of age qualifying units and and non-age qualifying units can be changed.

The Affordable Dwelling units are in addition to the 14,000 maximum. 14,000 + Affordable Housing

The 2013 EIR provided for an estimated number of units in:

PA1 Sendaro of 941

PA2 Esencia of 2,231 (1,967 + 264 Affordable)

Total of 3,172 dwelling units

A 2011 Amendment increased the number of units in PA1 Sendero to 1,287

A 2013 Addendum increased the number of units in PA 2 Esencia to 3,291

Total allowable units 4,578 (PA1 Sendero 1,287 and PA2 Esencia 3291) 1,406 more units than the 2013 Agreement based projections on.

TODAY THE ORANGE COUNTY FINALLY RESPONDED TO SEVERAL PUBLIC RECORDS REQUESTS FOR CURRENT PERMITS ISSUED,

In response to a PUBLIC RECORDS REQUEST, the County states that the following units have been permitted.

PA1 Sendero number of units 1,334

PA2 Esencia number of units 1,142

Total Units permitted is 2,476 (Sub Area 2.1 and 2.2) they have conditional approval of a total of

Total PA 2- Esencia 3,291

Sub Area 2.1: 850 Units

Sub Area 2.2: 900 Units

Total for Sub Area 1 + 2 = 1750 (The Ranch has already permitted 2,476 that is 726 more than originally projected)

Sub Area 2.3: 1,241 Units

Sub Area 2.5 300 Units

Esencia has 815 homes still left to Permit in Planning Area 2. They are almost done with Planning Area I and 2 and total dwelling units will be close to 4,578 (Original 3,172) By the time Esencia is suppose to open in 2018, the Ranch will have built 1,406 more homes than the 2013 agreement anticipated.

ISSUE III: CAPACITY

Both CUSD and the Ranch knew that CUSD was 8,555 students over legal capacity. The law requires a certain percentage of PERMANENT housing for students. Districts are allowed to place 400 students in portables while NEW SCHOOLS are being built. CUSD is planning on building Esencia K-8 1,200 students. CUSD will be able to place portables on Esencia (400 seats) while a second School is built. Currently there is no plans to build a new high school for the Ranch. CUSD is already 5,235 High School Students over legal capacity. Neither the Ranch nor CUSD want to build a new High School at the cost of $200 million dollars so rather than do the right thing, Staff is getting around this requirement by "increasing capacity" at the high schools. Staff is spending $45 million dollars to build 2 two story portables at San Juan Hills High, San Clemente High and Tesoro High. By doing this "NEW CONSTRUCTION/INCREASING CAPACITY they can create seats using portables and not have to build a permanent high school. This is shameful because it was admitted at the last Board Meeting that Tesoro was actually loosing capacity, San Clemente High was remaining at the same capacity (loosing 37 parking spots) and only San Juan Hills was gaining 24 new classrooms about 630 seats.

Despite increasing capacity at San Juan Hills- CUSD has told Telaga Mello Roos Tax payers who are entitled to 602 seats that theyy are limited to San Clemente High School.

The Ranch marketing materials for Sendero and Esencia all state that Ranch students will attend Las Flores and Tesoro. When these homes are all sold CUSD will re-zone the students in PA1 and PA2 to San Juan Hills. In the meantime they are being bused to Las Flores and Tesoro. Mello Roos taxpayers in Ladera Ranch are being denied seats at Tesoro to accommodate the Ranch.

CUSD is over capacity by 8,555 students without including any Ranch Development.

ISSUE IV: STUDENT GENERATION RATES ARE HIGHER THAN PROJECTED DUE TO INCREASING HOUSING UNITS AND CHANGING THE MIX OF DWELLING UNITS, AND THE FEES BEING COLLECTED ARE MUCH LOWER THAN EXPECTED BECAUSE THE NEGOTIATED FEES CHARGE MUCH LESS PER STUDENT FOR HIGHER DENSITY UNITS THAT WILL DRIVE THE SAME NUMBER OF STUDENTS.

Fees that should have been collected:

CUSD is going to have to find seats for more students than anticipated for opening day 2018. Even if CUSD collects $16 million in fees for PA1 and PA2 it is over paying $24 million for the land - essentially, this agreement really leaves the Ranch making a profit on the sale of the Land of $24 - 16 = $8 million while

CUSD has to find a minimum of $31 million more to build the school after the land is purchased.

This is a bad agreement for students and tax payers. It was done behind closed doors with the intent to enrich the Ranch at the expense of taxpayers.

ISSUE V: ACTUAL STUDENT GENERATION RATES BASED ON ORANGE COUNTY PLANNING DEPARTMENTS NUMBERS

To calculate this we need a breakdown of Type of Single Family Dwelling Unit and how many were Age Qualifying.

The original Calculation is below