Rialto Seal

The article carried in yesterday’s Sun and published on this blog titled “Officials rework Renaissance Rialto”, addresses the move to renegotiate the agreement for the “Renaissance Rialto” project for the redevelopment of the Rialto Airport and adjacent areas. The agreement is between the City of Rialto and Lewis-Hillwood Rialto Company, LLC. The city has basically agreed to spend all of its Redevelopment Agency money to aid an influential wealthy developer and campaign contributor.

The price, a cool $10.9 million.

The developer apparently wants to unwind the current purchase agreement, which has the group committed to millions of dollars in investment. The angle is to get the value of the real estate as close to zero as possible.

That’s right, a big fat zero.

Nice for the developer, bad for the city and taxpayers.

The Sun article says at one point the developer was prepared to pay the city $120 – $135 million. Now the city is paying the developer? Who is kidding who here? The Sun article further says Lewis-Hillwood has invested $32 million so far. That’s like giving a banker a $32 million down payment on land valued at $120-$135 million. In this case the banker is the City of Rialto.

There’s only one problem here. The developer is giving the banker campaign contributions.

So what. If it’s not a great deal any longer, then walk away. Just not with taxpayer money. The $32 million investment can carry over to the benefit of the city and the next master developer.

In reality, is bankrupting the Redevelopment Agency really the way to go? Everyone knows it’s a bad real estate market right now. The key word in that sentence being now. Why let the city be taken advantage of? The desire for future tax dollars to the city is not reason enough. A dark cloud already surrounds the project with questions looming on how the project moved forward without the city conducting any competitive bidding process. The additional fact that the city did not engage an outside consultant on the formation of any redevelopment plans is another red flag.

As highlighted in a previous article on iePolitics titled, “A closer look – Part 2: Lewis Pacific Partners and affiliated entities”, we highlighted the political influence being wielded in the City of Rialto by Lewis. Until now the activity has been quietly kept from the radar screen, and public scrutiny. The Lewis Group has contributed almost $110,000.00 to the campaign accounts of current and former members of the Rialto City Council.

A tidy sum for a small city like Rialto. Donations by Lewis-funded Political Action Committee’s is currently being reconciled as of the publication of this article.

For a project that purportedly will be worth billions of dollars when completed, something sure doesn’t look right. I have been told that City of Rialto Economic Development Director Robb Steele can’t be too happy with the recent turn of events.

Also of interest, the Lewis Group is the lead partner in Rancho Alliance, a group of developers competing for the right to purchase, entitle, and develop, a 1200 acre parcel of land currently owned by the San Bernardino County Flood Control District. The parcel is located within the sphere of influence of the City of Rancho Cucamonga. The land sale was canceled by the San Bernardino County Board of Supervisors following the announcement of a Grand Jury investigation into the request for proposal (RFP) process and Rancho Alliance.

The investigation into Rancho Alliance appears to be side-stepping any mention of Lewis.

So for the City of Rialto to sole source this major development initiative the city has assumed the position that Lewis-Hillwood is preeminently qualified and there is no other competitor(s) with equal or greater qualification. That the developer has substantial financial assets to underwrite the entire project. In this case upwards of $1 billion.

Now all of a sudden the developer is crying poor. I forgot to mention a principal partner with the Lewis’ in this deal (Hillwood) is a company owned by H. Ross Perot.

The aborted RFP process for the aforementioned sale of 1200 acres of county flood control land attracted major developers with a nationwide experience, track record, and financial strength overshadowing that of Rancho Alliance.

How the Rialto City Council acting as the City Redevelopment Agency (RDA) can take the position to single source Renaissance Rialto makes absolutely no sense.

It’s time for the city to step back and seek professional advice and stop using the developer as their adviser.

The Lewis Group of Companies seems to have the golden touch when it comes to obtaining “Sweetheart” deals. Renaissance Rialto appears to be another one in the making.

The smell test is looking pretty bad here. This whole process on its face warrants an investigation.

Look for our next article in the series titled “A closer look – Part 3: Lewis Pacific Partners and affiliated entities, which will focus on activity in the Chino area.