By: Libi Uremovic | Original Article at Patch.com
Pardee Homes’ Deal With Beaumont Has Turned Into a Deal With the Devil
Since 2002 Pardee Homes has built over 3,000 houses in the City of Beaumont and plans to construct 6,000 more. Pardee isn’t building homes because of the market; Beaumont’s home values are far below the rest of the State. And Pardee isn’t building homes in Beaumont because of a housing ‘need’; there are hundreds of houses for sale and dozens of foreclosures & abandoned houses.
Mike Taylor, Inland Division President of Pardee Homes, regularly speaks at Beaumont Council Meetings when there is bond debt to acquire or fees to object. At the December 2, 2013 Council Meeting Mike Taylor stated: “If it wasn’t for the cooperative relationship Pardee has with this City we wouldn’t be able to build.”
The ‘cooperative relationship’ is the City of Beaumont letting Pardee Homes build houses without paying for Infrastructure costs. Pardee Homes thinks that building houses without infrastructure costs it’s a ‘great deal’ for them, but what they have in exchange is thousands of houses without adequate infrastructure.
Instead of charging Mitigation Fees; the City of Beaumont makes deals with developers to pay for the infrastructure with Mello Roos Bond Debt. Additional property taxes are attached to the homes after they are sold. In the last 20 years the City of Beaumont has built 10,000 houses by obtaining over $300 Million in Bond Debt. Property Owners in the developments are paying up to $7,200 per year for 30 years in additional Mello Roos Property Taxes.
Developers in Riverside County are also required to pay TUMF (Transportation Uniform Mitigation Fees) to the Western Riverside Council of Governments, but the developers made back-room deals with the City of Beaumont to also push those fees unto the ‘future’ property owners. Beaumont recently lost a $42 Million Lawsuit to WRCOG. In the Ruling Judge Chafee described the back-room deals the City made with developers, which gave the City an unfair competitive advantage. Prospective property owners are burdened with massive taxes that they are not made aware of at the time they purchase their homes.
In 2002 Pardee Homes and the City of Beaumont obtained a $10,635,000 Mello Roos Bond to construct the Sundance community with 870 homes and 14.5 acres of Commercial development. Sundance has since obtained a total of $51,535,000 in Mello Roos Bond debt for 2,349 houses. The Commercial district was never built. Houses were built in the area originally allocated for commercial development.
In 2003 Pardee Homes and the City of Beaumont obtained a $10,930,000 Mello Roos Bond to construct Tournament Hills with 488 homes. Tournament Hills has since obtained $33,950,000 Mello Roos Bond Debt to build 888 homes.
The last Bond the City acquired on Tournament Hills was April 2013 for $10.875 Million. There were 488 Individual Home Owners, but there was only one ‘vote’. Mike Taylor of Pardee Homes ‘voted’ to allow the City of Beaumont to attach bond debt to the homes that he had sold years earlier. The property owners were never informed and didn’t notice because it is the City’s policy to charge each home owner the Maximum Amount of Mello Roos taxes regardless of their bond debt.
Most of the developers involved in Beaumont’s housing boom and bust have since fled the scene, but Pardee Homes continues to build houses in Beaumont because Pardee doesn’t have to pay for the infrastructure. What Pardee Homes doesn’t seem to understand that they are still legally liable to the home owners to have the infrastructure in place.
Beaumont is located in the high desert. The City relies on an Aquifer Basin that has been in Overdraft for years and water purchased from the State, if available. The approval of additional houses in this Area was based in part on the City of Beaumont expanding their Sewer Plant and building a Wastewater Treatment Plant to produce recycled water.
The City’s Sewer Plant was built in 1929. It has the sewage capacity for a few thousand homes and no wastewater recycling abilities.
In 1993 the City of Beaumont obtained their first Bond to enlarge the Sewer Plant and build a Recycled Water Facility. From 1993 – 2001 the City of Beaumont obtained a total of $25.8 Million in Bond Debt to build a Wastewater Treatment Plant, additional Mello Roos taxes were charge to property owners, and additional fees were levied. But the facility was never built and all the money is gone.
Instead of properly installing sewer lines and incorporating the entire city; Beaumont Officials just ran sewer lines directly from the developments to the Sewer Plant. Instead of installing the sewer pipes properly so the sewage would flow naturally; Beaumont installed six (6) Lift Stations to force the flow of sewage. Both of Pardee’s properties rely on two (2) Lift Stations to force the flow of sewage. Pardee Homes knew or should have known this was not a properly laid sewer system.
The last time the City even attempted to become Title 22 Compliant was in 2007. The State Regional Quality Control Board has issued Guidelines and Penalties upon the City of Beaumont, but the Board has failed to uphold any Standards or properly Regulate the City to protect the Citizens.
On September 10, 2014 the Beaumont-Cherry Valley Water District (BCVWD) voted to obtain Title 22 Compliant Recycled Water from the Yucaipa Valley Water District after waiting 20 years for Beaumont to produce Recycled Water. This will cost the BCVWD $2 Million, but they have no choice as their water supply is running dangerously low.
At the September 10th BCVWD Workshop many Citizens asked the Water Board to stop granting water rights to developers. There is not enough water to sustain a larger population and because Beaumont never built a recycled water plant the developers are using drinking water for construction.
Nathan Miller, on behalf of the Building Industry Association stood up at the Workshop dismissing any developer accountability and threatening to sue if they aren’t allowed to continue building in this area:
“There are legal complications that, and I think it was brought up last time with regard to reclaimed water, it’s unfortunate that there isn’t reclaimed water running through those (purple) pipes, but to make an assertion that you can only use non-potable water when non-potable water isn’t an option would create some due process complications as well. So that’s why we’re here.”
In regards to the lack of water in the Region Nathan Miller Stated:
“With regard to the Metropolitan Water District’s storage that they have, and that doesn’t include the water basin here, they have about 3 to 4 years of stored water if it doesn’t rain for the next 3 or 4 years and god forbid that be the case our problems are much bigger than just dealing with building right now. Not having water would be pretty significant.”
Only a profiteer that doesn’t live in the area would justify wasting water when there’s less than a five year supply remaining.
Pardee plans to sell 6,00 more houses with 30 year mortgages, massive Mello Roos property taxes, an inadequate infrastructure, no recycled water, and a 5 year supply of drinking water in a city that has over $100 Million in Lawsuit Judgements and $300 Million in Bond Debt.
Is Pardee telling the public that there is no recycled water?
No. Property Owners have stated that when they purchased their homes they were shown the ‘purple pipes’ that have signs on them stating that there is recycled water. The future property owners are assured that the City of Beaumont has a ‘state-of-the-art’ recycled water plant when there is nothing but an 85 year old Sewer Plant that was designed to accommodate a few thousand homes.
Pardee Homes knew or should have known they were defrauding the public and are legally liable to make those property owners whole. To quote Judge Chaffee in the WRCOG vs City of Beaumont Ruling:
“A Pattern and Practice of Deception.”…. “Fraud by Clear and Convincing Evidence.”