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We welcome our new South County blogger, known as “Capistrano Common Sense.” We wouldn’t mind having one or two more bloggers from down there, to help unlock the dark secrets of that huge mysterious subcontinent which stretches south of Irvine. Contact me – V.
2012 Swallows’ Day Parade; pic by Tom Irwin
San Juan Capistrano is probably best known for the swallows that for centuries have returned to nest at the historic Mission. It’s a fairly small town where it’s not unusual to see horses walking alongside cars and pedestrians – not the kind of town you might think of as corrupt. But appearances can be deceiving.
One example is the city’s purchase of “Open Space” with $27.5 million of public bond money. In 2008 the city council majority convinced residents to tax themselves to purchase Open Space within the city. The idea, voters were told, was to protect land in town from development by preserving it as “Open Space.” It sounded great, and five properties in SJC were subsequently identified and presented to the voters as potential targets for purchase. An aggressive Open Space preservation marketing campaign resulted in more than 70% of the voters approving a $30 million bond to purchase Open Space within the City of San Juan Capistrano (“SJC”.)
Voters soon learned this was a big mistake.
Brad “Locked” Gates.
Rather than purchasing any of the proposed properties in town, a deal was struck in 2009, behind closed doors, to purchase 132 acres outside the city limits. The team of “real property negotiators” included developers, led by former OC Sheriff Brad Gates (left, dubbed “the 6th councilman”.) The landowner from whom the property was purchased was none other than Gates’ good friend and former business partner Tony Moiso, CEO of the Rancho Mission Viejo Company, aka “the Ranch”.
City real estate transactions had always been conducted by the City Manager, so residents were surprised to learn that private citizens like Brad Gates had been appointed as “real property negotiators” on behalf of the city and were allowed to conduct the negotiations – including all restrictions and conditions – entirely behind closed doors.
The negotiators were somehow magically “exempted” from filing conflict of interest disclosures – for the first time in city history. Brad Gates, of all people, should have been required to file disclosures given his lifelong friendship and former business partnership/financial entanglements with the seller, coupled with the fact that he owned two homes in close proximity to the property.
And there were other problems: The purchase violated the public bond covenant which specified that the Open Space would be within the city limits. Still, with the right amount of political pressure it was pushed through “LAFCO,” the county’s annexation commission, in record time, in order to annex it into SJC with close of escrow.
Additional problems with this “deal” were numerous and included:
- An artificially inflated appraisal;
- The fact that half the property was already protected Open Space (so much for the argument that we needed to buy it to “protect it as Open Space”);
- Waiver of our city’s right to legally challenge or even oppose the huge volume of traffic to be generated by the Ranch’s proposed development of 14,000 homes and 5 million square feet of commercial/retail across the street, among others. There’s even a condition that the property reverts back to the seller “within 15 days” if certain clauses are breached.
Since the whole deal was negotiated and approved behind closed doors, the public never knew that they had effectively purchased a park for the Ranch’s newly developed communities across the street – an “amenity” which the developers duly promoted in their marketing material.
Five years later, SJC residents are still prohibited from accessing most of this Open Space because the largest usable parcel, the “Rancho Mission Viejo Riding Park” (it’s even named after them) is leased for a relatively paltry sum to privately-owned “Blenheim Equisports,” an elite equestrian events promoter who generates and keeps the substantial revenue from events held on the property.
The average SJC property owner’s taxes have been increased several hundred dollars per year to pay for this Open Space that they are restricted from using, unless of course you count the “free movie night” the city holds on the property once or twice a year. This presumably fosters the pretense that the property really is accessible to the general public. Judging by my property tax bill, the movie is anything but free.
Since the property was purchased with public bond money as Open Space for ”general public” and not “private” use, the equestrian promoter’s lease appeared to violate a clause in the bond covenant which limits the amount of commercial revenue that can be generated on the publicly owned property. 
In an effort to continue to allow the equestrian event promoter to lease the property, Ranch ally Councilman Sam Allevato (right) and his city council majority asked the City Attorney’s firm of Rutan & Tucker to come up with a way to skirt the bond’s revenue restriction. The attorneys cooked up a clever “management agreement” which allows the equestrian event company to keep the majority of the revenue in exchange for “managing” the property. Whether this circumvention of the public purpose bond is legal or not, residents are not fooled. We continue to insist that the property be opened up to the public, as was promised in the Open Space bond measure.
The seller on the other hand is guaranteed ongoing access thanks to a clause negotiated by Gates which creates a monopoly for the Ranch by allowing it to hold its annual 3-day rodeo on the property free of charge for 50 years, while prohibiting all other rodeos.
Gates also negotiated a clause that directs the majority of the annual rodeo proceeds to his “San Juan Capistrano Open Space Foundation, Inc.” that he established around the time of the purchase. The foundation’s stated goal is “to purchase and manage Open Space.” A view of their tax returns reveals hundreds of thousands of dollars in donations over the past few years.
Locked gates at Sendero Reata
At least once-sleepy San Juan is waking up to the cronyism; this issue is one of a number of reasons why voters in the last election tossed Sam Allevato’s council majority out by a wide margin. I will summarize other issues in upcoming posts.
Seeing is believing! To read the purchase contract, scroll through the “RMV Purchase & Sales Agreement” at: http://tinyurl.com/oyybry5. The more egregious clauses are highlighted, starting on PDF page 15.
Much more to come…
Scandal after scandal in the Great OC. When will we voters rise up and say enough is enough? These people should be in jail for fraud! After they serve their time, they can acclimate back into government running the County of Orange, where they apparently have no problem letting a guy be second in command who was convicted of voter fraud.
Jeez, this is just like Anaheim only on a smaller scale.
Once again, I notice Rutan at the heart of a scam.
“Once again, I notice Rutan at the heart of a scam.”
Oh, and Rancho Mission Viejo, too.
The common denominator in all of this is either Brad Gates or Sam Allevato. I am surprised Brad Gates would continually allow Sam Allevato to drag him down. Thank you orange juice blog for not only bringing this to our attention but Sam Allevato’s depositions which are quite incriminating.
If I understand correctly, the taxpayers are paying for a park they can’t use and receive a pittance in rent which does not even come close to what the taxpayers must pay in an annual mortgage payment. Then the people who use this park aren’t even from San Juan Capistrano. Nice !
Exactly. This land was purchased behind closed doors. The residents were sent no notice. But, we are forced to pay roughly 700.00 on our tax bill every year.
The park is not for our use. It is used for equestrian events and the city does not benefit. Residents of SJC, please show up at the city council meeting and voice your anger. Stand up and be heard.
seriously guys…you are screwing things up in anaheim, orange, garden grove and other islands of creative capitalism. now you are coming down to our quiet corner of the world where things have run very smoothly for decades. don’t we have the right to continue to pursue the american dream
Really? Somebody writes this and signs it as V? Com’on. I f you’re gonna lie and exaggerate, at least give your full name.
Vern, the editor. I didn’t write the article but it seems credible to me, and Capistrano peeps know who runs “Common Sense.”
Now tell us, J, what are the lies and exaggerations? You can’t just say that and not back it up.
a park for the Ranch’s newly developed communities across the street NOT
SJC residents are still prohibited from accessing most of this Open Space NOT
J, want to hear all about the Gobernadora Basin scam?
“J”; this boondoggle is well documented. In fact it’s actually even worse than what was written.
Take for example the lie used to justify the purchase (after the deal was done) to San Juan taxpayers. They were told that the purchase of this property would save it from development and therefore, traffic (already a huge problem in San Juan). But nearly half of the property was already preserved as open space and according to their own statements, the Ranch had always planned to preserve the riding park, obviating the need for San Juan taxpayers to pay to preserve it. Besides, it wasn’t even in San Juan.
There is a reason that this deal was done in such a secretive manner. Maybe it’s because they knew buying “open space” outside San Juan wouldn’t fly with the public – especially property they couldn’t use and that had so many restrictions.
The Ranch is moving forward with their plans to sell substantial parcels of surrounding property to developers in phases, to facilitate the eventual goal of constructing 14,000 homes and 5 million sf of commercial/retail. The first phases are being constructed right across the street from the so-called “open space”. How does this save San Juan from development and the traffic it generates? It doesn’t of course. All this new development will crush San Juan with traffic – open space or no.
As far as whether this is a park for the new gated development of Sendero across the street from the “open space”; Sendero has 24/7 access via an underpass to a strip of the open space that runs parallel to Ortega, called “Reata Park”. San Juan residents on the other hand, are locked out of this small park from sunset to sunrise. And judging by the marketing materials promoting Sendero, it sure sounds like their park.
The largest and most usable parcel however, is not the relatively small strip of land now known as Reata Park, it is the “riding park” parcel. If you know anything about the property, then you know that the general public is prohibited from accessing the riding park because it is leased to Blenheim Equisports. It is reasonable for San Juan residents to have access to it since they are paying for it.
There are other onerous conditions in the Purchase Agreement that I didn’t mention; I can list them all if you like, but you need only read the Purchase & Sale Agreement to see just how bad this “deal” is for San Juan taxpayers.
So are you telling us the City of SJC pretty much subsidized a good portion of the new Rancho Mission Viejo (RMV) housing development? Typically when developers ask to build new communities, they must at least put up some money for parks, roads, and schools. But in this case, it looks like SJC paid RMV for park land… That is mostly being used by new RMV residents. And these RMV residents don’t even live in SJC city limits!
There’s something rotten in the state of San Juan Capistrano.
I caught the County subsidizing RMV, too. Watch for the essay at the Voice of OC.
Well, when you put it THAT way, it doesn’t sound as good!
(Snapping it up for LTC, I hope!)
The residents of SJC were led to believe if we voted for open space in 08, we would be preserving existing open space, and the Vermulen property was mentioned as a possible aquisition. Then the city council and Brad Gates went to work creating a land purchase in Mission Viejo that would bail out Tony Moiso. We residents and homeowners are stuck with the bill attached to our tax bill every year.
Allevato, Gates, and Moiso did not send out little yellow cards announcing a city acquisition or zoning change. They (and Gates) negotiated this land contract behind closed doors. A group of residents tried to recall Allevato in 2014 and Allevato raised 67K in less than 3 months from developers, property owners and stakeholders who benefit from this land purchase. The land was outside the borders of SJC, and residents are prohibited from using this land. But, we get to pay for it.
This land was purchased with resident of SJC property tax (bond) dollars. SJC residents can not use the part. But, the water and maintenance bill is roughly $300,000. 00 a year and that bill comes to the city of SJC.
The Bond Oversight committee has not filed a finacial report since 6/2013. The SJC Bond Oversight Committee is supposed to meet once a month and make the minutes public. They canceled the last meeting scheduled in January 2015.
Residents are entitled to review the income and expenses of the Bond money for open space. It is our money. What is up with no oversight?
Thanks so much for shining a light on this. Folks outside South County may not realize how much news is happening down there. Hell, many folks in South County may not realize what’s happening just under their noses! It’s critical to share stories like this so more voters can be truly informed voters (and take proper action).
*They didn’t steal the Mission did they? Pope Frank is supposed to issue Father Serra his Sainthood. OK then, just call your favorite SJC City Council Member and give them a good piece of your mind.
So what are residents in the area going to do? I am counting what I believe to be violations, if the deal was discussed in Closed Session but the property was not properly noticed (they have to tell you WHICH property is being purchased) and they may only discuss “price” and “terms of payment” in Closed Session, which eliminates a lot of what gets discussed. Not using the bond funds as promised is another.
Are you going to file legal complaints? Blog posts do help expose what is going on, but only if citizens use that information to rise up and fight back with whatever tools are available and there are a number of them out there for citizens. Good luck.
*Brown Act….Brown Act…..Brown Act Violations….call the FEC right away…my goodness!
“You know what we need in this county?,” he said archly.
We need to take out the trash again. Most recently, the city council approved plumbing improvements. contamination riding park/creek. caused by Blenheim the renter of the property is now asking for 800K$ to improve and clean up the contaminated creek. The two members of the city council are recalled. Residents are waking up. Work is halted on the plumbing. To Ron and Anna, we have screamed and the work is stopped and the $800K is in limbo. Blenheim needs to pay for its own mess. Not the residents of San Juan Capistrano.
Sam Allevato has been repeatedly asked to resign from the city council during meetings, now that he stands alone with his bad ideas after Kramer and Taylor were voted out this last election.
The voters have spoken, and his brand of governing isn’t going to be tolerated here anymore. This sleepy little town has woken up, and we’re pissed.
Pissed in 2015 and again in 2017. Resident tax dollars are not approved to modify Blenheim (the renter) contaminated creek problem. We will not stand for our city council to write out a check for $800,000.00 to repair, modify the contaminated creek so that Blenheim can continue to have horse events. The renter pays for maintenance and damages. Not the owner and the owner is the tax payers.
Perhaps the Common Sense folks will write a piece about the latest brewing scandal. As soon as the new city council slate was elected one of their group retired and the new majority appointed none other than one of Common Sense’s own, John Perry, to the council. They knew there was no other way that guy was going to get on the city council via an election. He is about as electable as a clump of dirt.
Actually I take that back, a lump of dirt would not have cost the city big bucks by having it sued … get ready for this … for progressive water rate billing! Yes, in the face of our massive drought and recently announced cut-backs it would seem Darth Vader felt heavy water users were paying too much and perhaps his beloved golf course (where he lives right beside the fairway!) should be allowed to water to its hearts content and keep his front lawn green. Apparently someone needs to catch Lord Vader up with the current state of water affairs in CA.
Now it appears some members of the new city council may have engaged in illegal referendum activities to defeat a proposal the old city council had approved for a downtown hotel. The DA has opened an investigation. Say what you want about the merits of a hotel in downtown SJC but now those same new council members have turned right around and supported a different downtown hotel project.
One set of developers seems to have lost out big time and another group seem to have benefited greatly. Yes, indeed what a breathe of fresh air the new city council is … I’m holding my breath here Common Sense until you write all this up … unless you are too busy organizing the next anti-immigrant tea party rally.
This is all very shocking. I am so disappointed…
Great Blog. I see now that The City of SJC is considering paying $8 million dollar mitigation effort related to the history of pollution coming from this park. Why wouldn’t the previous owner of the riding park be part of the mitigation. This continues to stink.