Josh Dulaney, Staff Writer
Created: 10/28/2009 03:40:03 PM PDT

RIALTO – Officials here hope an injection of taxpayer dollars can help prevent the city’s biggest redevelopment bet from going bust.

The City Council, acting as the Redevelopment Agency, has approved a $10.9 million interim agreement with developers while they renegotiate the price of land critical to Renaissance Rialto, a proposed mixed-use project along the 210 Freeway.

It’s a move that could eliminate funding for new projects in the foreseeable future, said Robb Steel, economic development director for the city.

“We’re buying a little bit of breathing room,” Steel said. “It’s not a situation we want to be in, obviously.”

The agreement with Lewis-Hillwood LLC, a partnership of Upland-based Lewis Operating Corp. and Ross Perot Jr.’s Texas-based Hillwood Development Corp., calls for the agency to pay up to $10.9 million to six Rialto Municipal Airport tenants to help offset the costs of relocating from the 437-acre site.

The agency will assume control of the tenants’ leases, which will produce a net income of about $150,000 a year, Steel said.

The agency is funded primarily through property taxes.

The agency and the developers are renegotiating the price of the land, plus an adjacent 60 acres. Each cut of land is part of 1,445 acres where the city hopes to build 1,700 homes, a 600,000- square-foot shopping center and 3.5 million feet of commercial space.

“We are finding that projects of this scale take a long time to get planned and started,” said David R. Lewis, vice president for Lewis Corp. “We are committed to the project and seeing it through.”

Officials earlier this decade billed Renaissance as an economic savior worth about $2.5 billion that would bring in between $2.5 million and $5 million to the General Fund annually.

Previous plans called for more than twice as many homes, two schools and more office space.

The recession and accompanying drop in land values has caused the developers to seek a new agreement.

Lewis-Hillwood said it already has invested $32 million into Renaissance, including land-use entitlements, property acquisitions and other site investigations.

Roughly $15 million of that was put toward tenant relocation, demolition and remediation costs, of which $11.7 million went to leasehold agreements with the six tenants at the heart of the compromise.

The developers were obligated to pay more than $21 million for the relocation of the tenants, and want to recover the $11.7 million it has invested if a permanent restructured contract is not approved.

Under the interim agreement, Lewis-Hillwood will be reimbursed $12.5 million from future sales of the airport portion of the site to any new developer.

The agency and the developers have agreed to negotiate on a permanent restructured contract until Sept. 30, 2010, at which time each party can walk away from the deal.

The agreement means taxpayers take on some of the financial responsibility of the project, which at one time rested solely with the developers, Steel said.

“In 2003, when we struck the original deal, the agency had no money to put into the project, and (Lewis-Hillwood) advanced the money,” Steel said. “And then we came into money and deployed the money to projects around town. We don’t have a lot of money left to offer.”

To come up with the $10.9 million, Steel reallocated money from tax-exempt bonds to taxable bond funds and used surplus dollars from other projects that came in under budget.

“At the end of the day, it was scraping money out of the side of the honey jar,” he said. “The well is dry.”

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Joe Nelson, Staff Writer
Posted: 10/28/2009 03:55:12 PM PDT

The county, at the request of Supervisor Neil Derry, will conduct a survey of other counties to see how they handle accrual of vacation time for their employees.

Derry, who is pushing for caps on vacation accrual time for high-level county employees, made the request to County Administrative Officer Mark Uffer during Tuesday’s Board of Supervisors meeting.

Uffer has directed the human resources department to conduct the survey. He will report back to the Board of Supervisors with the study’s findings upon its completion, county spokesman David Wert said.

Derry said he was prompted to make the request after receiving information that a number of executive-level or administrative employees, referred to as “exempt employees,” had accrued substantial vacation time in their many years of employment.

“I can state that some individuals have well into the six-figure dollar amounts of vacation accrual that they will cash out when they retire in the next few years,” said Derry. “It’s a huge liability for the county to pay out.”

Vacation, Derry said, is for employees to take time to decompress, regroup and be better employees.

“By not taking vacation and accruing it, we defeat the purpose of offering vacation in the first place,” he said.

Derry, a former regional manager of public affairs for Southern California Edison’s Ontario office, said caps on vacation accrual are common in the private sector, and should be in the public sector as well.

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By Dale Kasler
dkasler@sacbee.com
Published: Thursday, Oct. 29, 2009 – 12:00 am | Page 8B

CalPERS is reviewing its relationship with Apollo Management, a big private-equity firm that hired controversial placement agent Alfred Villalobos to obtain investment business from the pension fund.

CalPERS spokeswoman Pat Macht said the review began in May and isn’t tied to a separate review, begun two weeks ago, of Villalobos’ activities. Rather, the review is focusing on Apollo fund performances and other issues, she said. The Apollo investments had been doing poorly as of last spring but have rallied lately, according to CalPERS data.

The California Public Employees Retirement System has been investing with Apollo since 1995 and currently has more than $3.4 billion poured into various Apollo funds. Two years ago it spent an additional $600 million to buy a 9 percent equity stake in the New York firm.

The look at Apollo, first reported in the Wall Street Journal, is part of a larger CalPERS review of its relationship with the private-equity industry begun last spring, Macht said.

“It’s an evaluation of the economics of the relationship and all that stuff,” Macht said.

Among other things, CalPERS has been chafing at the fees paid to some private- equity firms and hedge funds and has been trying to use its financial heft to extract better terms. CalPERS is America’s largest public pension fund, with assets of $199 billion.

“Everything is a buyer’s market today,” Macht said.

The review also will examine CalPERS’ direct equity investment in Apollo. The pension fund is forbidden to disclose what its 9 percent stake in Apollo is currently worth, said CalPERS spokesman Clark McKinley.

The existence of the review comes amid increased scrutiny of the relationships among public pension funds, private-equity firms and the marketing representatives known as placement agents.

Placement agents are hired by private-equity firms to secure investment commitments from funds such as CalPERS.

In mid-October, CalPERS disclosed that Villalobos – a former CalPERS board member who runs a placement-agent business in Stateline, Nev. – earned $50 million in fees obtaining business from CalPERS. A big chunk came from his work for Apollo.

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