Planada, Pacific Holt, and Land Swaps

Note: The following is from an e-mail I received a couple of days ago.

Since it is a bit lengthy, I have highlighted certain portions that may be of interest.


It seems Livingston residents are not the only ones concerned about certain

development projects, and General Plan Upodates.



 July 04, 2008


Merced County Board of Supervisors

2222 M Street

Merced , CA 95340

(209) 385-7366                 via fax (209) 726-7977 and email


RE: Special Session July 8th 2008 10:00 a.m. Continued Public Hearing

        Comment in opposition to the Appeal of Planning Commission consideration of MM 07-025 and MD 08-004 to CUP 05- 031 Housing Authority County of Merced Felix Torres Farm worker Housing Project


Ladies and Gentlemen of the

Board of Supervisors,


Housing Authority County of Merced (HA) is the appellant for MM07-025 and MD 08-004. The project site lies within the boundary of the planned Pacific Holt Residential Communities (PHR Communities) ‘Villages of Geneva at Planada’ project which your board considered on July 25, 2006 in the form of a guidance packageThe guidance package was denied on a 2/3 vote, with Supervisor Crookham stating that this is a good project but this isn’t the right time for it yet.


Just 9 days later in a letter addressed to Mr. Bobbie Lewis, and entitled: COMPREHENSIVE UPDATE TO THE COUNTY GENERAL PLAN, were the following statements from PHRC.


“We believe that our plan represents the most appropriate use of the land northwest of and contiguous to the existing town of Planada . We therefore formally request that the land use plan that we have prepared be included and analyzed within the General Plan Update.”

                  — Des Johnston, On behalf of PHR Communities.

                                                                 (dated: Aug. 3, 2006)


That letter was submitted subsequent to the Board’s denial of the Guidance Package and therefore the contents represent a statement of continuing residential development intentions. These comments, submitted by PHR for inclusion in the General Plan Update (GPU) project, confirm the ongoing threat of a 1,390 acre urban expansion into prime agricultural land east of Plainsburg Road and north of State Hwy 140 (contiguous with the parcels under consideration).            




Further statements from Pacific Holt are noted in communications with the Merced County Civil Grand Jury:


      “ The Pacific Holt Corp. has plans for a large development in the area east of Plainsburg Road and North of Hwy 140.  The project area for this development already contains an affordable housing project built by Bear Creek Developments, but which is not associated with the Housing Authority of Merced County .  The Pacific Holt Corp. felt that by locating the Mega-Plex in the same area, it would enhance the chances of getting approval for their development project.”

                                                —   Merced Grand Jury,  Case No. 05-06-14


Documents discovered in 2008 reveal that the Executive Director of the Housing Authority County of Merced (HA) entered into a Real Property Exchange Agreement with Pacific Holt Corporation (PHC), dated 11/10/04, which provided PHC with an option to build model homes on one acre of the 21 acres government-owned parcel in order to foster PHC’s major residential development plans for all the adjoining prime Ag-land.


The following is an excerpt of Housing Authority / Pacific Holt Property Exchange Agreement:


                  “The parties agree that PHC will be entitled to have use of one (1) acre of the Holt Parcel [Housing Authority’s 21 acre parcel on Plainsburg Rd ] for the purpose of building and utilizing model homes in order to promote PHC’s planned residential development on the adjacent parcel.”

                                                            — Executive Director of Housing Authority

                                                            — Chief Financial Officer of Pacific Holt Corporation


That option, to build model homes, totally undermines the validity of Housing Authority’s later environmental findings (particularly regarding the issue of growth inducement) and belies subsequent statements Pacific Holt in their Environmental Assessment (EA).  Housing Authority,  knowingly acting as an anchor tenant for,  described the HA ‘project’ as an adjunctive use permitted on agricultural land, when in fact Housing Authority,  by consummating the Real Property Exchange Agreement, was obligated to promote the residential development of the surrounding 389+/- acres.  However, the impacts from the 389-acre PHC residential development, contiguous to and surrounding the Felix Torres project are not analyzed in the EA.  In light of this new information, CEQA Guidelines require that further environmental review be undertaken by the County of Merced .   Partnerships with a common goal such as the PHC/HA Real Property Exchange Agreement imply must not divide a project into smaller projects for the purpose of circumventing appropriate environmental review under CEQA.  At this point a supplemental environmental review is required by CEQA.


The Housing Authority, as Lead Agency for its own project, concealed the nature of the Real Property Exchange Agreement and did not evaluate any possible environmental effects of the proposed ‘model homes’ or the explicit promotion of the adjacent planned residential development.  In preparing the Environmental Assessment for NEPA and CEQA review, Housing Authority claimed that there were no significant growth inducing effects from their ‘project’, in stark contrast to the ‘option’ included in the Real Property Exchange Agreement . This is a violation of CEQA and public trust. and invalidates the claims of the EA. This fraud on the public was repeated when HA submitted an application for a conditional use permit for the Felix Torres ProjectThis also was a fraud on the County as land use authority and was a betrayal of the public trust!


Now HA is asking the Board of Supervisors to be complicit in this corruption and fraud!  The Board of Supervisors as a responsible agency must acknowledge the stark facts of the intentional betrayal of the public trust involved in the environmental findings by Housing Authority.  There is no justification for any new discretionary approvals relating to the Felix Torres Mega-Plex in the absence of an updated, genuine and thorough environmental review.  CEQA law requires a responsible agency to assume the role of Lead Agency before granting a discretionary approval if significant changes to the project or environmental conditions have occurred between the original approval and a subsequent modification to a project.


 It should be noted that all the property in question is in Supervisory district one, and that  Supervisor Gloria Keene was offered employment by  Pacific Holt Corporation prior to leaving office, at the rate of  $10,000 per month as a real estate consultant.  Financial records confirm that Keene began receiving compensation from PHC as early as January 2005.  It also bears noting that County CEO Dee Tatum was a party to the land swap which resulted in the creation of a 21 acre parcel on prime Ag-land (without the benefit of any public review).  The 1 acre Housing Authority plot which was set aside for PHC’s model homes appeared as a cross-hatched area on maps presented to the Planning Commission & Supervisors and the acre was labeled “future development,” with no further explanation offered.


The following is an excerpt from a Joint Purchase Agreement between Hostetler Investments and Pacific Holt:

Section 3 Cooperation in Acquisition and Division of Kamangar Property (Planada)

          The total purchase price for the Kamangar property as set forth in the Kamangar Purchase agreement is approximately $6,150,000.00. This purchase price consists of the sum of $500,000.00 which is the purchase price for a 21+/- acre portion of the Kamangar Property identified for sale to the Housing Authority of the County of Merced(the “HA Parcel”) and the sum of $5,650,000.00 for the remainder of the Kamangar Property consisting of 389+/- acres.


          Hostetler and Pacific shall exchange the HA parcel with the Housing Authority for a 24acre parcel of real property (the “Replacement parcel”). Hostetler and Pacific shall then sell the replacement parcel to a third party (Dee Tatum) for the sum of approximately $230,000.00 (the ‘Replacement Parcel Proceeds’)…

Signed by Saundra Nevis for Pacific Holt

Signed by Greg Hostetler

(Dated 7/28/04)


Just 9 days after the above agreement was signed Greg Hostetler treated County CEO Dee Tatum to a pleasure trip to San Francisco :


Excerpt from (form 700) Statement of Economic Interests for

Demitrios Tatum from Schedule “E” Income – Gifts

Name of Source: Ranchwood Homes Corp

Date of trip: 8/5/04

Reason: Business/Pleasure trip to San Francisco , CA


Quid pro quo?


The paper trail from the residential developers’ schemes for the Planada area clearly shows that administrative and elected official have been the target of intense lobbying and in some cases became parties to the developers’ schemes.  Regarding the current Minor Modification and Minor Deviation applications it is apparent that the applicant (HA) has totally disregarded the proper permitting procedures and has presented patently false commitment letters in the hopes of obtaining premature and unjustifiable building permits and project modification approvals. 


Planada CSD has misrepresented that it has authority over and capacity to serve the Felix Torres Plainsburg Road parcel.( including the Head Start facility), to the County of Merced on multiple occasions during the review and permitting of this project. This is a complete fraud and we have been informed by the secretary of Planada CSD that Merced County , in fact, requested the fraudulent letters of commitment to be issued for the purpose of approving the Minor Modification and Minor Deviation. (This is outrageous behavior from county staff!!) The Planada CSD does not include the proposed parcels under consideration. 


On November 20, 2007 Daniel Chavez the president of the Board of Directors, signed commitment letter number 159 for 128 residential units.   This letter of commitment was issued as if  the Felix Torres project were within the Planada CSD boundary, and was a continuation of the fraud which lead to the inappropriate approval of the Felix Torres CUP 05-031.


On April 4th 2008 Planada CSD approved two separate ‘WATER- SEWER COMMITMENT FOR BUILDING PERMITS” to the Housing Authority; one for 128 units, and one for one (1) unit for the day care facility, signed by Planada CSD Office Manager Martha S. Mayo.  The Board action approving these out of bounds services came during the same meeting at which the Board of Planada CSD approved an application to LAFCo for annexation of the proposed Felix Torres Site.  These documents were issued in full knowledge that the subject parcels were still outside the district and that Planada CSD had no legal authority to issue such commitment documents


This action is clearly fraud. This Planada CSD’s action is growth inducing.  This falsified documentation is intended to facilitate HA project approvals and grant proceeds as well as to satisfy developers who have prepaid for future connections in expectation of a significant sewer expansion.  It should be noted for the record that Thomas J. Keene, husband of former District One Supervisor Gloria Keene, stated in recent correspondence that Planada CSD does not even have enough capacity to serve the land within its current boundaries. Planada CSD certainly should not be issuing Water-Sewer Commitments beyond their own legal authority:


                        “The Board of Directors of the District is no longer talking about a project large enough to serve all of the land in the District’s planning area..  The project has been scaled back so that it will probably not serve all of the land within the District’s current Boundaries.”

                                                         — Thomas J. Keene ,   P.C.S.D.  Special Counsel,                                                                               Environmental Review (dated:  Feb. 29, 2008)



CEQA Guidelines: Required Subsequent Environmental Review

A responsible agency may not grant a discretionary approval for a project for which a negative declaration has been prepared without first considering the environmental impacts outlined in the negative declaration. (CEQA Guidelines § 15096(f); cf. Endangered Habitats League, Inc. v. State Water Resources Control Board (1997) 63 Cal.App.4th 227.) A responsible agency must decide for itself how to respond to a project’s significant effects that will directly or indirectly result from the responsible agency’s own decision to approve an aspect of the project. (CEQA Guidelines § 15096(g)(1); and Pub. Res. Code § 21002.1(d).) The responsible agency must adopt any feasible mitigation measures that will substantially lessen such effects. (CEQA Guidelines § 15096(g)(2).)

When a responsible agency believes that a lead agency has improperly relied on a negative declaration it may elect from options set forth in CEQA Guidelines section 15096 as follows: (1) take the matter to court within the applicable limitations period; (2) prepare its own “subsequent EIR” if permissible under CEQA Guidelines section 15162; or (3) assume the role of lead agency if permissible under section 15052. (Guidelines § 15096; and see City of Redding v. Shasta County Local Agency Formation Comm. (1989) 209 Cal.App.3d 1169, 1179-1181.)

As discussed in detail below, the initial study and negative declaration for the project failed to analyze certain impacts, and new information regarding potentially significant impacts has come to light since the HA approved the project. Thus, if the HA refuses to supplement the inadequate environmental review, the Board of Supervisors should assume the role of lead agency and evaluate the impacts of the project prior to approval of the above referenced MM and MD.

It bears noting that the HA adopted the negative declaration for the project two and a half years ago on November 15, 2005. There is substantial evidence showing that the Felix Torres Housing Center is significantly different today in its construction phase than the project that was reviewed and approved by the HA. Further, there is substantial evidence showing that the Planada Community Services District’s (“CSD”) plans to expand the wastewater treatment capacity have changed considerably.  There is new information showing that the project will likely have significant impacts that were not addressed by the HA. 

We feel, based upon the irregularities that have occurred from the inception of the Housing Authority’s project, that there is sufficient reason for the Board of Supervisors to deny this appeal outright.  The application for a minor modification and minor deviation are truly deceptive captions for the matters up for consideration by the BOS today.  There is sufficient evidence before the Board of Supervisors to trigger a supplemental environmental review of this project.  Conditions have changed since the EA in 2005 and the CUP in 2006 were issued for this project.


Significant information that was not available to the board at the time the original CUP was approved has come to light.  CEQA law requires that if the Lead Agency refuses to evaluate these subsequent environmental impacts then the Responsible Agency must assume the role of Lead Agency and conduct its own Initial Study and Notice of Preparation and from that process make its own independent findings. 


For all of the above reasons we respectfully request that the Board of Supervisors deny the appeal of MM-07-025 and MD 08-004 of CUP 05-031.





Bryant Owens and on behalf of

David Corser Individually and Member of San Joaquin Raptor/ Wildlife Rescue Center

Katie Lopez and

Members of the Planada Association



Kenneth R. Mackie Esq.

Interested Parties


Attachments Submitted in person under separate cover.

“A” 2002 Preliminary Engineering Report for Planada WWTF Expansion
“B” Can and Will Serve Ledgers and related e-mail (13 pages)
“C” E-mail from PCSD to David Capron (1pg)
“D” Letter from Ken Mackie LAFCo (2pg)
“E” 11/7/03 Modification of Escrow, 21 acre Felix Torres Parcel (1pg)
“F” Community Plan Update Map Showing Felix Torres on Gerard Ave (1pg)
“F-1” Planada Community Plan Update 2003, Included by Reference
“G” PHRC Letter to Robert Lewis dated 8/3/06 (2pgs)
“H” Tom Nevis to Terry Allen re: Planada/Tatum Inquiry, Grand Jury Notes (2pgs)
“I” Villages of Geneva EIR Guidance Package (13pgs)
“J” Merced County Municipal Service Review, 2007, Planada (6pgs)
“J-1” Local Agency Formation Municipal Service Review Guidelines August 2003
(Govt. Publication included in its entirety)
“K” Settlement Agreement between Bryant Owens and PCSD dated 5/27/08 (5pgs)
“L” CA Regional Water Quality Control Board Administrative Liability Order (6pgs)
“M” 1993 Bear Creek Village CUP and amendments

“N” LAFCo Sphere of Influence Amendment 1055B

“O” Statement of Economic Interest Form 700 5/28/05 Dee Tatum

“P” Joint purchase Agreement 7/28/04 Pacific Holt/ Hostetler Investments/ HA.

“Q” Real Property Exchange Agreement HA/PHC




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