Investors sold land to Victorville in “homerun” deal. But city sold “”library” land at a loss, failed to notify potential bidders
April 17, 2011 12:02 AM
VICTORVILLE • Six parcels of land once intended to be a new library continue to cause problems for the city, as investigators look into restricted bond funds Victorville used to purchase the plots and how they relate to a conflict of interest concern tied to Mayor Pro Tem Rudy Cabriales.
Local developers are also asking questions about the high price Victorville quietly fetched for selling off the property, even as that deal may fall apart.
In 2004, a group of private investors sold six vacant lots on the north side of Civic Drive to Civic Drive Commercial Partners, LLC for $820,000.
The LLC was an equal partnership between developers Steve Peisner and Benton Lee, according to Peisner. The therapist, who lives in Idaho now, said via email last week that no one else was involved in the LLC or owned any portion of the six parcels, which he and Lee had intended to develop into office buildings.
Instead, Peisner said they were contacted by a real estate agent who had a voluntary role with Victorville’s planning or zoning department at the time. The agent indicated Victorville was interested in buying the land across from City Hall to build a library. So, less than 19 months after they’d bought the property, Peisner and Lee sold the land to Victorville for nearly $1.6 million — doubling their money in less than two years in what one local broker called a “homerun” deal.
More than five years later, after quarter over quarter of plummeting property values, the city struck a deal Feb. 1 to sell that land to Los Angeles-based ICO Development for nearly $1.5 million, taking just a 10 percent loss on the property.
A number of area developers expressed concern that no “for sale” sign went up and no request for proposals went out so they could’ve had a chance to bid on the property.
The city marketed the land by listing it as “available” on its website, according to spokeswoman Monica Petersen. Lee & Associates brokered the deal, and no offers other than ICO’s were received.
At $19.01 per square foot, real estate comparables show ICO paid up to seven times more for the land than what other property recently sold for in the area.
ICO didn’t respond to three requests for comment on the deal made over the last week. But the company’s contract with the city showed why it was willing to pay so much: ICO hoped to land a valuable lease with San Bernardino County for the property.
However, ICO lost the bid to build a new county Department of Child Support Services complex there, according to county spokesman David Wert. Ramona Office Properties won the bid, Wert said, with plans to tear down the vacant car dealership on Ramona Avenue for the project.
As for the Civic Drive land, Sophie Escobar, assistant director of redevelopment for Victorville, said escrow was never opened because ICO didn’t sign the purchase agreement approved by Council in February.
“ICO has requested some changes to the agreement approved,” Escobar said, with staff bringing a new draft back to Council during closed session at 5 p.m. Tuesday in City Hall.
Brooke Edwards may be reached at (760) 955-5358 or at bedwards@VVDailyPress.com.
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