Press Release: Grand Jury Issues Report Pertaining to the SilverLakes Equestrian Sports Complex
NORCO, CA – On May 16, 2018, the City of Norco received a report from the Riverside County Grand Jury (attached) pertaining to the SilverLakes Equestrian Sports Complex. While the City of Norco will provide a detailed response to the Grand Jury within the statutory 90-day response period, the findings appear to be based upon a misunderstanding of the facts and process surrounding the development of SilverLakes. The City of Norco will share its response when it is sent to the Grand Jury.
The following section highlights past actions pertaining to the SilverLakes Equestrian Sports Complex:
The City of Norco acknowledges that the property is subject to a Deed Covenant limiting the use of the 122-acre property to public park, recreational and open space purposes, including public campgrounds and park-related concession operations.
Following the acquisition of the property in 2002, which was unusable in its then state, the City of Norco prepared a Master Plan and unsuccessfully attempted to develop an economically viable park project funded by the City.
Because the City lacked funding to develop the property, in 2004, the City Council requested that the City Attorney petition the Federal Court requesting elimination of the Deed Covenant to allow a traditional mixed-use commercial project, potentially including a Walmart, which the Court denied.
In 2007, the City prepared a Request for Proposals seeking potential developers for an economically viable equestrian/sports park. Two proposals were received and evaluated through interviews conducted by staff and public presentations made by the two proposers. Following the evaluation process, the concept presented by Belstarr Management Company, LLC (now Balboa Management Group) was accepted based largely on the proposal’s compliance with the deed restriction on the property. Balboa Management Group (the developer), the City and the Redevelopment Agency then entered into a Memorandum of Understanding concerning the scope of the project in 2008.
The parties spent the next three years negotiating the specific terms of the related agreements, including the Ground Lease, Shared Use Agreement, Conditional Use Permit, Development Agreement, and Construction, Funding and Acquisition Agreement (“Agreements”). All documents were considered at multiple public hearings and were eventually entered into on July 6, 2011. The City owns the 122-acre property and all improvements constructed on it. In the event of a default by the developer, all property and improvements revert to the City free of the Ground Lease.
The Agreements addressed all aspects of the development, including proposed improvements, permitted uses and shared uses, all of which are specifically listed in the Ground Lease, Development Agreement and Shared Use Agreement. Because there was uncertainty as to the broad language of the Deed Covenant, and as required by the Development Agreement, the parties took the additional step of having the Superior Court review all Agreements (a validation action) and issue a judgment finding that the proposed project as defined by the Agreements complied with the Covenant.
Balboa Management Group spent the next several years arranging very difficult financing, which is an obligation solely of the developer. To date, the developer has invested in excess of $35 million in the project. As a requirement of the Construction, Funding and Acquisition Agreement, which was provided to the Grand Jury, along with all Agreements and financial documents, the City paid $6 million to partially fund the construction of sewer and water improvements on the City’s property. The Agreement requires the developer to repay the costs of those facilities, even though they remain City property. The developer has made all payments required by the Agreements, including reimbursement of the utility improvement costs and the rent payments since 2011, even though SilverLakes did not open until 2015.
While the site plan, which is included in the 2017-2018 Grand Jury Report, has changed somewhat as the project has moved forward, the currently developed SilverLakes Equestrian and Sports Complex is in compliance with the Covenant and the Agreements.
For more information, please contact the City of Norco City Manager’s Office at (951) 270-5617 or email@example.com.
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