March 04, 2013

Hint of new housing could lead to water peace

By Lois Henry, Columnist
The Bakersfield Californian

The land may look vacant and dead out at the old McAllister Ranch site in far southwest Bakersfield, but don’t be fooled.

Things are stirring. Big things.

Irvine-based developer SunCal Cos. is apparently interested in buying the eastern third of McAllister Ranch and reviving at least a portion of the old housing development plan.

That could mean two things: Bakersfield is on the cusp of a new building phase (please, lets not use the word “boom”); and such a purchase could be the path toward compromise between the City of Bakersfield and McAllister’s water district owners.

The city was not happy when Buena Vista and Rosedale Rio-Bravo water storage districts bought the 2,000-acre McAllister ranch at a bankruptcy auction in April 2011 and then announced plans for a massive groundwater bank.

The crux of the city’s angst was millions of dollars in development fees it had anticipated from the housing development that went bust when the economy imploded in 2008.

On the surface it may not seem like the city had much of a case. After all, the developer went bankrupt and sold out. How could the city hold the water districts to old promises?

Well, there was a development agreement that went with the land, not the developer, the city countered. The water districts bought into that agreements when they bought the ranch.

The water districts and the city went round and round trying to negotiate a compromise with no luck.

The city filed suit against the districts late last month and the two sides appeared to be marching down a well-trod litigious path among water interests in Kern.

Then came SunCal.

It’s still way early in the game, but SunCal’s interest has sparked a lot of reciprocal interest.

“The city is encouraged by their interest,” said Bakersfield’s attorney Colin Pearce.

“The sooner the better,” was the response from Rosedale Rio-Bravo’s General Manager Eric Averett when asked if Rosedale would be interested in selling to SunCal.

“Yes,” said Buena Vista Director John Vidovich about whether he thought a SunCal purchase could be the ticket to a compromise with the city.

SunCal doesn’t come out of the blue on this deal.

It was the initial developer for McAllister and numerous other properties around California. But many of its properties went into bankruptcy when its investor, Lehman Bros. went belly up.

SunCal itself never declared bankruptcy and got McAllister and three other properties back at the April 2011 auction in a complicated series of deals.

Althogh it sold McAllister to Buena Vista and Rosedale for $22 million, SunCal retained an option on the middle portion of the ranch where most of the infrastructure for houses had already been put in place.

It was always expected SunCal would someday build out that part.

But the eastern third was kind of a no man’s land.

The districts felt it would be expensive to get water to that side and the city didn’t like the idea of a big puddle separating splotches of urbanization.

A SunCal buy would solve a lot of headaches.

“We’re looking at any good land use planning that satisfies both the city and our goals,” Vidovich said.

In Buena Vista’s case, it’s not about money. The district just wants to move forward with groundwater banking.

For Rosedale, cash would be helpful as the district is also pursuing a $25 million purchase of the old Onyx Ranch above Lake Isabella.

“We’re not making enough revenue from farming (on McAllister),” Averett said. “We’d like to get a plan in place (for the groundwater bank) this year.”

SunCal, of course, was coy.

“We believe in the future of the Bakersfield market and look forward to continued participation in McAllister Ranch as we believe this is a premier property,” said spokesman Joe Aguirre.

As always, never a dull moment in the water world.

On a side note, Averett again pledged that Rosedale would not use McAllister to sell water south. And, though Vidovich is just one board member and doesn’t speak for Buena Vista, he’s also said he would not support selling water out of the basin.

That’s good to hear.

Because at the heart of all this for me is the Kern River.

Buena Vista owns rights to river water and that’s what would likely be banked at McAllister.

Environmental documents show the districts anticipate stocking up to 250,000 acre feet in the bank in good years and pumping out as much as 50,000 acre feet a year in dry times.

That’s a lot of water. A lot of river water.

We should be sure every drop stays right here in Kern County.

Opinions expressed in this column are those of Lois Henry, not The Bakersfield Californian. Her column appears Wednesdays and Sundays.