Lompoc, a city looking for new housing, is taking legal action to try to move forward a development that city officials said is being held up by a 20-year-old agreement.
In 2000, the city of Lompoc and the Mission Hills Community Services District entered into an annexation agreement that states the land slated for a roughly 400-unit housing development would become part of the city’s jurisdiction. However, because the city lacked the adequate infrastructure at the time, the district agreed to provide water and wastewater services to the homes built.
But, in a lawsuit filed on July 2, the city claims that the district is holding up the build out of the Burton Ranch housing development by not being able to fulfill its end of the deal.
“The Burton Ranch Project is now at the point where water and wastewater services are needed; however, [the district] does not have and, despite representations to the contrary, never had, the infrastructure and capacity to provide water and wastewater services to the Burton Ranch Project,” the lawsuit alleges.
In 2007, the developers behind the project and the district entered into an agreement that required the developers to pay for the infrastructure upgrades necessary to the district’s system. Jon Martin—who is the general partner for Harris Grade Partners LP, which owns 32 acres of the Burton Ranch area—said that in exchange for funding these upgrades, the developers would receive credits to offset connection fees and other costs the district charges.
But this initial agreement has since expired, and they’ve been unable to reach a new one. Martin said that a few years ago, the district completed a study that established a new fee structure that removed the credits the developers were set to receive and increase the proposed connection fee amount.
Martin said that under this proposal, the development would not have been economically feasible.
“Once that agreement expired … they said, ‘Agreement is over, here’s the new deal,’ and the new deal killed the project,” Martin said.
With this stalemate preventing the project from moving forward, Derek Hansen, executive vice president of The Towbes Group—another firm involved in the project—said the developers are hoping to instead receive water and wastewater service through the city, which would make the project economically feasible and allow it to move forward.
Lompoc Mayor Jenelle Osborne said that’s all the city wants as well. About 30 percent of the city’s housing stock is designated as low-income, which is by far the highest percentage in the county. The city needs homes at other income levels that people can move into in order to open up the low-income housing for other people who need it, she said.
Hansen said the Burton Ranch development consists of more than 400 single and multifamily housing units at price ranges suited to various income levels. The addition of these homes to the city’s stagnant housing supply could help entice new businesses to the city that could provide jobs.
Although at the time the annexation agreement was signed the city couldn’t provide water and wastewater services to the development, it’s since developed the infrastructure to do so as the north end of Lompoc has grown over the last 20 years. Osborne said the city filed the lawsuit with the aim to amend the agreement or scrap it altogether, so that the city can provide these services and allow the homes to be built.
“Standing in the way of building housing at a time when California needs housing is an undue burden on our community,” Osborne said.
As of July 10, the Mission Hills Community Services District (CSD) hadn’t filed a response to the city’s lawsuit. District General Manager Loch Dreizler said the CSD would meet with its attorney soon to decide how best to respond.
Dreizler noted that the 2000 annexation agreement remains in place. He added that the developers and the district had a “can and will serve” letter in place that stated the district would provide water and wastewater services to the development. But the letter expired last year, and another one has not been agreed upon.
This issue was last publicly discussed when the city approved a five-year extension to the Burton Ranch development plan during its City Council meeting in April 2019. During this meeting, Walt Fasold, who serves on the CSD’s board of directors, said the district is ready and willing to provide services to the development.
Before he spoke, Fasold passed out a six-page letter to the council that laid out concerns the district had with the development that its members believed needed to be worked out. Additionally, the letter names improvements the district has made to its water and wastewater infrastructure to support the Burton Ranch development.
“We as a district fully support the effort of moving the development forward,” Fasold said. “We don’t see ourselves as a delay.”
But the city and the developers disagree with this assessment. If the city is successful in its attempt to take over the rights to provide the development’s water and wastewater services, Martin said some environmental studies would have to take place. But, depending on how long the court battle takes, he said he’s hoping the developers can start construction next year.
“We want to get the project going,” Martin said. “We’re in the business of providing housing. We just want to get our homes built.”
Reach Staff Writer Zac Ezzone at zezzone@santamariasun.com.
This article appears in Jul 16-23, 2020.