Update: Assignment and Assumption of Development Agreement for Whispering Hills

The San Juan Capistrano City Council met on Tuesday night to consider the request to approve assignment of the Whispering Hills Development Agreement to a new entity called Rancho San Juan Development LLC. The Council did not approve the request when a motion by Councilman Hribar failed for lack of a second from any other member.

Council did pass a voice motion to reconsider the request at Council's next meeting on January 20, 2009.

Written comments were supplied to Council by me and by the developer. The developer's letter is evidence that the sole purpose of the requested assignment is to shield the new "member", Woodbridge, from past liability. One can speculate that there is some year-end tax structuring involved as well, though the letter is silent on this point.

Ellen Addonizio, President of the CUSD Board of Trustees, spoke as a private citizen and requested that the City allow time for CUSD Trustees to look into the transfer.

Sue Palazzo, a member of the CUSD Board of Trustees was also present in the audience.

I spoke briefly to draw Council's attention to my letter and to remind them that the Development Agreement was just one element of a complex set of agreements pertaining to Whispering Hills. I suggested that the public interest would be served by delaying consideration of the matter for a reasonable period of time to allow consideration of all of the developer obligations, including those obligations to the County of Orange and the school district. I closed by expressing my support for seeing the Whispering Hills development be completed as planned, assuming the public's interest is respected.

A representative of Woodbridge also spoke and urged the Council to approve the assignment, in fact stating the City was obligated to deal with the request "within 30 days". The City Attorney disputed this statement, at which point the matter appeared to be decided.

Comments from the dais provide a few insights. Apparently, the relationship between the City and CUSD is not warm. In fact, one council member spoke of being "blown off" and "ignored" by the school district in the past. In another case, it was noted that CUSD used its governmental authority to override City land use restrictions on the San Juan Hills High School site. Apparently, this was viewed as being a heavy-handed and contrary to public will expressed in a ballot measure.

It is clear that CUSD leadership has some fence-mending to do with this Council.

Time is short for the school district to act to protect any claims it may have against Whispering Hills. The City is, strictly speaking, not a party in the relationship between CUSD and the developer and it may not unreasonably thwart the transfer of the Development Agreement.

However, Councilman Allevato did raise the issue that the County of Orange is a third party beneficiary under the Development Agreement. Is the County aware of the impending transfer?