Here's the deal: In two weeks Judge Maas will hear arguments regarding the legality of the Escondido City Council's adaptation of the citizens sponsored initiative to declare the 110 acre golf course property permanent open space. The question he will eventually answer is 'does a City Council have the authority to rezone privately owned property without any liability to compensate that owner for denying him potential benefits (profits) derived from the development of that property?'
Previous California Supreme Court legal decisions support City governments right to determine the best use of land under its jurisdiction. The question here is, did the City government go outside of the law to change zoning rules after the fact?
The current owner, Michael Schlesinger, says the 110 acres was zoned R1.7-SFH when he bought the property. He says the City planning department confirmed that (rightly or wrongly). That would mean that under those terms of land use, he should be able to build up to 600 homes on the abandoned golf course.
The City, after listening to the pleas of ECCHO, the local homeowners group, and looking at the fully qualified Open Space Initiative they submitted, decided to simply adopt the legal zoning document rather than to submit it to an election by the voters in Escondido.
The property, under the terms of the Open Space Initiative, was then legally zoned for 'Open space, agricultural, park land or golf course use only.'
Mr. Schlesinger filed suit to declare that action illegal, and to return the zoning to what he and his legal team claim was it's original zoning of R1.7-SFH. They claim that when city officials allowed the golf course to be built, they never properly rezoned the property and therefore the original housing allowances were still operative today.
The outcome, it seems to me is one of several possibilities:
A) The City is wrong and Mr. Schlesinger has suffered illegal actions by the City and would need to be compensated (up to his claim of $100 million), and the zoning he claims existed when he bought the land (R1.7-SFH) would be acknowledged and restored by the court action.The City could face bankruptcy and the citizens would have their wishes bulldozed. The City will appeal.
B) The City acted legally and Mr. Schlesinger does not now have legal standing to construct single-family homes or any other development that is not open space, agricultural, park or golf course in nature. However, the Judge could declare that in a bungled process, the City caused financial damages to the owner, and order them to compensate him in some way. Either way, Mr. Schlesinger is sure to appeal.
C) The action that the City took had no effect on the 'value' of the property because it was never zoned as R1.7-SFH, and therefore Mr. Schlesinger's claim is void and without merit; he bought a golf course and he got a golf course. His claim that the land no longer has value due to any action the City took is specious. It is worth what it is worth, period. Mr. Schlesinger would appeal.
At hrte core of the dispute is the debate about Mr. Schlesinger's claims that the property was always zoned for residential development, or whether the City had always considered the land to be excluded from the overlay zoning that existed prior to the construction of the golf course.
Though no news reports have ever really asked whether the court is seriously considering this angle, we have to believe that the City is. They must rest their case on the basis of historical documents that, despite some conflicting title documents, some misrepresentations by the City Planning Department, and/or some major errors and inconclusive evidence of how the land was designated in the Escondido General Plan, that the golf course was never intended to be used for housing.
OK, if this fairly summarizes the current state of the legal process, then there is a clear need for the City of Escondido to take preemptive action.
Here's why:
They already know what the local homeowners and voters in Escondido want to happen: they rejected Proposition H, the housing plan put on the November 2014 ballot by the Schlesinger Team. They are in agreement that the property needs help, but bulldozing the greenbelt that winds through many neighborhoods is not the best idea, for the locals or for the City as a whole.
Now that the City is involved in a major ($100 million) lawsuit, the stakes have been raised exponentially. Worst case scenario; If the City should lose, it would face possible financial disaster, including possible bankruptcy along the lines of San Bernardino. The City may or may not appeal. That is a political question that remains to be answered.
Plus, the owner wins the right to fully develop the property with new homes. Everybody in Escondido loses, Mr. Schlesinger wins but will have to face a tough uphill battle to operate his business in a very hostile environment. The City of Escondido is already known as hard on home builders. Imagine how tough they will be when Mr. Schlesinger asks for design approvals, studies, or permits. It will be ugly!
Even if the City wins they have an intransigent owner who can afford to leave the property undeveloped, abandoned and blighted, continuing to wreak havoc on home values, safety and community identity. The owner has repeatedly threatened to do that if he doesn't get his way and there is no reason to believe he is bluffing.
All of these outcomes will result in years of litigation and delays.
Some have suggested that despite spending nearly a half million dollars on the case, the City would be best served if they lose, because it would render the 'takings case' moot. Schlesinger's attorney said outside court recently, the city should hope to lose in February, thereby severely limiting the damages the lawsuit could render.
But what about the current residents who, despite having won a monumental ballot battle in November, have had no relief. Their homes have lost hundreds of thousands in value; they have to look at the burned out, weed infested, and dying greenbelt everyday. They spent nearly one hundred thousand dollars to defeat Prop H.They are suffering and the City of Escondido is the only player in this battle that can affect a positive outcome!
So it is time now, before the hearing on the 26th, to step up to the plate and make a positive difference.
Formally, and very publicly, the City should offer Mr. Schlesinger a 300% premium cash purchase price for the entire package, the property and all of the rights, trademarks and assets and effects of the Escondido Country Club. The actually amount would be based on a third party assessment of the current market value of the land, or whatever he paid for the land based on public records, whichever amount is determined to be greater.
Schlesinger won't accept it.
But having a real offer on the record would have the effect of rendering the developer's claim that the land is worthless as moot. It would make the Judge think twice about the true value of the land at this time. If he is looking for justice, it would be hard for him to exclude the interests of the citizens who, for all intensive purposes have played by the rules. They did, after all, believe there was an 'implied covenant' between them and the City that the golf course was a permanent amenity of the neighborhood that would add value to their home forever. For many, it was the main reason they chose to live in the area.
Next, the City should lay out a plan to operate a revitalized golf course as a public course, subsidized by a local area special tax assessment district. Whatever revenue generated would be used to offset operating costs. Include a management plan to lease operations to private operators as has been the practice with the two current City golf properties, Reidy Creek and The Vineyard.
Finally, include a plan to remove excess turf, redesign the course to dramatically reduce the cost of watering. The course already has recycled water available to it. Apply for a turf removal rebate plan such as the one offered by Rincon Water District, and replace the existing ryegrass with a water-wise turf designed for golf course use.
Existing zone variances have allowed for some businesses to exist on the property. Expand on those to create necessary additional revenue streams to offset operational costs. The community has traditionally supported special events at the Clubhouse, so newer facilities will increase demand and improve cash flow. Besides a casual clubhouse restaurant consider a golf college, a spa, and a wine tasting room. All would be welcome additions to the community and remain consistent with past land use.Also, parts of the redesigned golf course could be leased for certain agricultural applications, such as a grape vineyard.
Obviously, there would be additional costs to upgrade and revitalize the golf course infrastructure ( sprinkler system, clubhouse, fairways and greens, and maintenance equipment, etc.). This could be paid for with a special purpose, redevelopment municipal bond. This is not the situation the City would prefer, but it is running out of choices.
The other option, losing the case and paying multi-millions in damages, and ending up with precisely what the citizens have clearly rejected, would be dereliction of the government's obligation to protect the interests and assets of the voters of Escondido.
It will ultimately be cheaper to buy the land and go into the golf business than to get wiped out because of a legal snafu that could have been avoided.The fact that this problem is here in Escondido mitigates many of the obvious objections. Golf is a big part of the San Diego experience, and it always will be. Not just for us locals, but even more so with the Zonies and Snowbirds who make Escondido a mecca for sun-seeking recreational tourists.
Everyone involved knows the outcome of these kind of cases is a 50/50 proposition. Judge Maas said so himself: “Each side seems certain they are going to win,” Maas said. “It’s not so black and white to me. Nothing seems certain in this case except that it could be long and expensive for both sides.”
Many will say buying the land back is a bad idea because it obligates the City to operate a business that has shown every indication of being a loser. But how many years will it take to lose $100 million? If you know in advance that by flipping a coin, you have a 50/50 chance of losing $100 million, wouldn't it be prudent to avoid flipping the coin in the first place?
