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SAME OLD ISSUES WITH FAIRBANKS RANCH COUNTRY CLUB LEASE   (4/2/08)

The latest audit of the Fairbanks Ranch Country Club reveals that the Club has not paid rent owed to the financially-strapped City of San Diego for the period January 1, 2004 through December 31, 2006.  According to the City’s Office of the Auditor and Comptroller, the Club, which leases approximately 400 acres from the City, was in arrears almost $170,000 as of December 2006 and the matter has been referred to the City Attorney’s Office for advisement.  Actions to be considered include a decision about whether to find the Club in default of their lease, or to refer of the matter to the City’s delinquent bill collection unit in the Treasurer's Office.

The Club's lease, referred to as a "sweetheart deal" by the San Diego Union Tribune 2005 exposé, has been controversial since its approval in 1982, when  developer Ray Watt enticed the City, in a close Council vote, to allow him to build 340 homes where only 128 had previously been allowed in exchange for deeding 615 acres of the land as public open space.  Months later he leased back two-thirds of the property for 61 years in order to build a private golf course with no rent due to the City, beyond an initial $3,000, until 2010 unless the club's membership sales were to exceed $25 million dollars.   In 2003, when the membership sales exceeded that threshold, the Club refused to start paying the City, claiming a technicality in the agreement.  A late payment of $60,004 was made "under protest" in March 2005 but, as of this writing, no further payments have been made despite an outstanding balance of $169,400.  The current dispute notwithstanding, the lease will require that the Club begin paying its rent, a graduated percentage of its gross revenues, in 2010.

Money owed to the City is not the only issue with the FRCC lease. According to the Endangered Habitat League, the Club has failed to fulfill the mitigation requirements contained in the original agreement with Watt.  The Club claims that the requirements are not their responsibility.  

Additionally, the Friends and the River Park Joint Powers Authority have repeatedly pointed out that construction and maintenance of a public trail on the north side of the river is part of the lease with the City and therefore the Club's responsibility. The FRCC also refuses to recognize this agreement.  Unfortunately, the public trail has been graded and disked by another of the City’s lessees, the Fairbanks Polo Club, and used as an exercise track for their polo ponies. The illegal grading and use of the northern river bank is currently under a 2005 cease-and-desist order issued by the City. 

Last August, the Friends Board was asked to review a proposal submitted by the FRCC that would turn back to the City one-third of the leasehold in exchange for an extension of the lease on the remaining property.  The Board responded in a white paper that the "...City should not be unduly hasty in its consideration of the proposal without a thorough, environmentally fiscally responsible review."  

The Friends have always maintained that the long-term goal for this property should be, first and foremost, conservation of the San Dieguito River Valley, a unique and valuable but rapidly diminishing habitat in California. It is the Board’s position that the acreage currently leased by the FRCC should be returned to public open space, as originally promised by Watt.  Since the Club, in refusing to pay its rent, has violated the terms of a legally binding agreement, perhaps the public will not have to wait until 2044 for this "sweetheart deal" to be terminated and the land can be returned to its rightful use.

April, 2008

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