ANAVERDE HOME BUILDING STALLED CITY, DEVELOPER AT IMPASSE OVER FLOOD CONTROL.

Byline: JIM SKEEN Staff Writer

PALMDALE -- Home building has ground to a halt in the giant Anaverde master-plan community in a dispute between the city and developers over a flood-control dam that city officials want downstream from the 5,000-home project.

City officials refuse to issue building permits for about 500 homes yet to be built in Anaverde's 1,400-home first phase and forbid grading for the second phase until the developers make significant progress on both financing and designing a dam to control normally dry Anaverde Creek.

``We can't allow them to go forward without a financing mechanism in place for the amenities, including the dam,'' said Assistant City Manager Steve Williams. ``We have to protect the citizens of Palmdale.''

Anaverde LLC officials say city officials are unfairly burdening them with the dam, which is to be built more than a mile downstream from the community in an existing earthen flood-control basin adjoining the Antelope Valley Freeway near Pelona Vista Park, and in addition arbitrarily rejected the developer's proposal to build it with a tax on new Anaverde homeowners.

Anaverde officials said the dam was not mandated in the projects' original approvals and that retention basins built into their project actually reduce storm runoff into Anaverde Creek.

``We're offering a solution for a problem Anaverde is not contributing to,'' said Jonathan Curtis, executive vice president and general counsel for Empire Companies, an Ontario corporation that is the lead partner of Anaverde LLC.

Much of the dispute centers on the interpretation of the project's development agreement and master plan, and what the documents require of the developer.

Steve Walton, chief operating officer of Empire Companies, said a nexus, or connection, must exist between how much storm runoff Anaverde's houses and streets contribute, and the amount the developers must pay to control it.

``Nowhere in the development agreement does it call for a dam,'' Walton said. ``The master plan calls for us to mitigate (runoff) to the extent we contributed to it.''

City officials say the requirement for addressing the water runoff is a long-standing one, and that the flood-control works -- whether a dam or some other mechanism -- is a regional amenity the developer agreed to regardless of the project's own impact on runoff.

And the developer's financing proposal, city officials say, put all of the burden on Anaverde homeowners.

``They are calling for everybody else to pay for it but them,'' Williams said. ``The burden on the homeowners is too much. We're asking, what's the developer going to pay?''

City officials said the drainage master plan to which the developers agreed does not specify the type of flood control facility to be built, but does limit runoff to less than 700 cubic feet per second.

City officials said the nexus argument does not apply in Anaverde's case because the developer agreement includes a provision waiving rights to raise the nexus argument.

(Anaverde officials disagree they waived the right.)

City officials said the developers also agreed to a dam when the planning commission approved a tract map for the project in February 2005.

Curtis said the developers agreed then to the dam with the understanding that it would cost $9 million and that other developments, including the neighboring 7,200-home Ritter Ranch, would make significant contributions.

Anaverde officials contend that the city agreed itself to build a dam when it acquired the Pelona Vista site years ago from Los Angeles County. Further, they say, the Pelona Vista soccer fields that the city built on part of the property created a need for a bigger, stronger, and, ultimately, much more expensive dam.

City officials acknowledged the land transfer was done with the understanding a dam would be built, but state the agreement did not say who was to build it, and add that the soccer fields were in place six years prior to Anaverde LLC taking over the housing development.

As for the $9 million figure, city officials said it didn't come from them. They said they never solicited bids for building a dam and therefore were never in a position to quote such an estimate.

As for Anaverde officials' estimate the dam will really cost $24 million estimate, the city has no way of confirming it, Williams said.

``That is a claim they are making without any evidence showing that it is true,'' Williams said. ``Twenty-four million is their number.''

Anaverde officials' proposed financing plan called for using an existing community facilities district, created so that homeowners over time would pay for Anaverde infrastructure.

Under the dam-financing proposal, the district's tax rate would be increased from 1.8 percent to 2 percent of a home's value for new buyers coming into Anaverde, not those who have already bought homes. The tax amount could increase up to 2 percent each year.

Empire officials said they presented their proposal to City Manager Bob Toone and other city staff at a dinner meeting in mid-June. Anaverde officials said they left the meeting thinking progress was being made only to find the proposal rejected just a few days later.

``He (Toone) dismissed it, saying it was inadequate,'' Walton said. ``There was no discussion, no critique, and no chance to go to the City Council.''

Toone suggested a counterproposal to use drainage fees collected from both the Anaverde and Ritter projects to finance a portion of the project with the rest of the cost being handled through the formation of a separate community facilities district.

Walton said they want to bring the issue before the City Council in an open meeting. Empire officials believe that Toone is not providing the council with a complete picture of the situation.

Toone said he was not obstructing the project or keeping information from the City Council.

``I'm working with my team. I'm talking with my council,'' Toone said. ``I'm not out on my own.''

Mayor Jim Ledford said he has no interest in meddling with the city staff's handling of the dispute.

``I don't believe the City Council should be negotiating with the developer,'' Ledford said. ``We're asking them to uphold their end of the agreement.''

Ledford said the drainage improvements were among the amenities the developers had told the community they would provide.

``These are amenities that are required and agreed to,'' Ledford said. ``There is an expectation from our residents that they will be built.''

City officials believe the dispute will ultimately be resolved though some type of arrangement between Anaverde and the neighboring Ritter Ranch project, which is not yet building homes. Ritter Ranch is also required to provide drainage improvements.

SunCal, the Irvine-based company that is developing Ritter Ranch, did not respond last week to requests for comment.

james.skeen(at)dailynews

[phone]

CAPTION(S):

2 photos

Photo:

(1 -- color) Homes in the Anaverde housing development in Palmdale.

(2) Flood control issues have caused building to cease in the Anaverde housing development.

Jeff Goldwater/Staff Photographer