City facing lawsuit from Orange County developer

The City of San Bernardino is facing a $21 million dollar lawsuit filed by a developer for essentially reneging on an agreement to help them build homes on the property and acting in bad faith.

According to reports in the media, Orange County-based Montecito Equities’ claim states former and current elected officials owe damages to the developer.

In March of 2013 the City Council voted in the affirmative on the Spring Trails Specific Plan. This was the developers plan to build homes in an area encompassing more than 300 acres on the North end of San Bernardino.  The land was not part of the City but is within the city’s sphere of influence.

After an outcry by some local residents, the city council in 2020 reversed course and voted against annexing the project into the city and beginning the process to develop the property.  The crux of the legal claim is that the city broke an agreement in place that assured the development company that they would assist with the necessary actions to see the project to fruition.  Legal counsel for the city at the time, city attorney Sonia Carvalho, recommended against the reversal and tabling of the item as it would put the city in legal jeopardy.

Mayor Valdivia, who has always been staunchly in favor of new development in the City, at the time voted in favor of moving forward with the annexation.

“Henry Nickel was facing a tough reelection and caved to the political pressure of local residents and because it was in his district  he convinced a majority of the council members to go along and as was predicted and threatened by the developer we are now facing a multi-million dollar lawsuit,” said Valdivia.

In October of 2019 the Local Agency Formation Commission (LAFCO) had as part of the process voted in favor of the project and its annexation into the City.   LAFCO added a condition and recommendation that a 26 acre parcel of land significantly surrounded by the project also be annexed into the City as part of the plan.

Ultimately, in a city council meeting on May 6, 2020, a motion was made by Councilmen Fred Shorett that the motion to annex be tabled.  Councilmen Mulvehill provided a second for the motion which carried 5-2 in a veto proof majority with members Sanchez, Ibarra, Figueroa, Shorett and Nickel voting to table and strangely councilmen Mulvehill voting no although he provided the impetus for the motion to move forward.

Despite pandering to local residents, Nickel was defeated in his re-election bid by Ben Reynoso.  In that same election cycle Damon Alexander defeated Mulvehill.

“First of all quality housing in the City of San Bernardino is a no brainer to be in support of. Second, building in that northern area near the foothills is a path that other cities have taken and been very successful and the error is compounded by making an apparently politically motivated decision that has put the City in serious legal jeopardy,” said Jay Prag Professor Economics and Finance at the Drucker School in Claremont. “Hopefully the city will once again reverse course and find a way to move forward with what would clearly be an asset for the City and is currently a major headache.