Development Schemes Floated With Public Expense
DESERT HOT SPRINGS, CA – It usually begins with over-inflated hype. A little truth stretches a long way to hide the bamboozle. Past city leaders have a history of falling for and suffering embarrassing deceits, unfortunately defining the city as the chump that keeps on asking for more.
A few names remain etched in our city’s development history not for fame but for notoriety; Brian Bescoby, Michael Krzyzaniak and Roger Schnellenberger are a few.
Some drove fancy cars and talked a good game promoting themselves with slick websites and prospectus while working the back room of council meetings on the lookout for vulnerabilities to exploit.
Prior to their projects appearing on the agenda these developers were not shy about scheduling private meetings to charm council members by floating hopeful dreams of castles in the air …or on hillsides.
A well-known developer now returns to take another bite out of the apple, promoting his plan to carve up the foothills with a project brazenly named The Foothills.
Doing so will cost the city precious time and money, especially since this is BLM land not located in the city but in the county. There is considerable public expense to incorporate and provide public works such as sewer and water for certain developments.
One problem plaguing the city has been the lack of oversight examining the track record of developers accompanied by an inability to hold developers accountable to get ambitious projects finished.
So, let’s use our wayback machine to pierce the veil of a recent past and pull the wool away from covering our eyes.
The Completed Mess of Tuscan Hills
“Yes, Meyer Luce was the borrower and we have foreclosed on the property. We took back the property,” said Jeffery Lubin, President of Scripps Investments and Loans when he confirmed seven years ago that the Tuscan Hills project was no longer part of the Meyer Luce development portfolio.
Scripps, a private equity lender based in La Jolla, California, provided over $38 million in financing for the Tuscan Hills project. That was in late 2006. Tuscan Hills today remains a chewed up and barren hillside distinctively on view while driving into the city.
A fleet of a dozen gigantor diesel powered earth-movers ran from sun up to sun down for nearly a year flattening naturally undulating foothills of Tuscan Hills.
The half finished result was a massive earthwork berm blocking what were fine mountain views previously enjoyed by dozens of residents with prior built homes on the edge of the development. Their view now is a mound of dirt piled as high as roof tops.
Tuscan Hills still poses an environmental threat. The worry of massive erosive damage continues to loom due to there being no flood control to speak of. At the time they shut down the project a spokesperson for the grading contractor said that in order to finish it would take those dozen earth movers working round the clock for another year.
The earth movers have been long gone. Eight years later the city is only left with this big mess surrounded by ugly construction fencing with torn fabric blowing away in the winds. Although there is no clear solution in sight for what remains, this is how Walter Luce defines a completed project.
The same Walter Luce is a writer of fiction who enjoys a home in the Mission Lakes Country Club and spends summers in Vermont.
Today another hillside in Desert Hot Springs – and favored by hikers and dog walkers – is in the sights of Walter Luce who was the CEO of the former Mayer Luce development company. This time it’s a 161 acre project named The Foothills. By all appearances it is non-fiction.
Behind the eye-candy of a flashy website are compelling details luring investors and financiers to buy into believing. This is called forward thinking.
“Our Senior community encompasses over 1500 units and will be placed on forty acres in the middle of a secure and scenic valley surrounded by 120 acres of untouched desertscape,” says the website description of The Foothills of Walter Luce.
The prospective location of The Foothills touches the northern Desert Hot Springs city limits at the top of Santa Cruz Road near Casa Grande Drive.
The sole purpose of the website is the promotion of The Foothills. The name of the company associated with the project is Rising India Inc. listing Walter Luce as CEO.
By the way, none of this has gone before any city or county planning commissions.
The questions are will The Foothills happen? And should it?
Willow Crest and The Vineyards Left Unfinished
Tuscan Hills is not the only unfinished project left behind by Walter Luce in late 2006. Also unfinished and abandoned were Willow Crest Condos, located on Pierson Boulevard in Desert Hot Springs and The Vineyards in Indio.
Inexplicable the Rising India website lists all three projects – Tuscan Hills, Willow Crest and The Vineyards as “Management’s past personally complete projects.”
Willow Crest and The Vineyards were eventually completed, but not by Walter Luce or his former Mayer Luce development company.
After sitting idle for two years, Willow Crest was purchased by a private developer and completed. Scripps took possession of the partially constructed Vineyards project. Lubin said his company decided to go ahead and finish the development without Meyer Luce.
Tuscan Hills was only a graded hillside with construction not far enough along for Scripps to finish. In the process to take possession, Scripps was the highest bidder, taking control of the property with a bid amount of $38,448,256.59, the amount of the unpaid debt Meyer Luce owed Scripps on the project.
Tuscan Hills, however, eventual sold again in foreclosure with Scripps and its investors taking a multi-million loss on the project that was once planned to be a 505-acre gated county club featuring 2,000 single family homes and condominiums surrounding an 18-hole golf course that was said to be designed by professional golfer Johnny Miller. Once more big names on big plans but ending with nothing.
Unfinished Developments’ Public Cost
No matter what the track record is of the promoter the development of any project on raw land comes at a considerable public cost. Paying for city staff and engineering comes out of the budget of city hall.
Often as a result of scrubbing the landscape, unfinished projects linger as an eyesore for years while announcing an necessary disruption of wildlife and habitat not to mention the environmental degradation that contributes to erosion due to the lack of flood control.
The reason why the city’s new middle school was named Painted Hills was not due to it facing a position on the map named Painted Hills.
Prior to the Snellenberger project those rolling hills on the horizon west of the city were once a rainbow of colors painted by minerals naturally found in the soil. Snellenberger ground that up with another fleet of earth movers that spit out a blur of gray.
There is no better description of entropy than Snellenberger’s project that unpainted the Painted Hills landscape. The cost of the city’s loss is priceless.
Although the Snellenberger development never made it to the build stage it also ended up costing the water district millions of dollars to run water and sewer lines out Pierson and across Highway 62 …for nothing.
Finally Snellenberger got out of his deal by flipping the land to speculators where it has been sitting as a raw eyesore for over a decade.
Snellenberger also left the The Mission Springs Water District the expense of flushing poop down the chute as there is insufficient volume from the couple dozen homes at the end of the line for the poop to travel downhill by itself.
The cost to perform this shitty job – and to build those sewer and water lines – is included of your water bill, just kinda hidden there. Roger Snellenberger is long gone but the smell remains.
Unfinished Developments Plague City
Projects like rehabilitating the Pink Flamingo Hotel and developing Palmwood are joined by The Terraces and Hacienda Heights as grand ideas left unfinished and costing public funds.
Brian Bescoby, having no experience as a builder or contractor, was given one of those $250,000 checks signed by former mayor Yvonne Parks. Instead of rehabilitating the Pink Flamingo Hotel Bescoby left it in ruins and skipped town.
Only recently the property was finally purchased and is now undergoing a complete renovation by an experienced builder at no expense to the city. Still, the city’s quarter million dollars is gone, leaving another smelly financial mess.
Michael Crosby promoted the impressive Palmwood Development at the edge of the city promising two 18 hole golf courses, hotels, condos and homes with an outlet mall located on public land north of North Indian Canyon Road between Mission Lakes Boulevard and Highway 62.
That stink ended up costing the public over a million dollars after Crosby was exposed as Michael Krzyzaniak, a convicted felon and his project just another pipe dream. Today Krzyzaniak remains behind bars in a federal penitentiary after another fraud conviction.
Walter Luce was once the most prominent developer in Desert Hot Springs, with his first project in the city the completed Hacienda Heights residential development on east Hacienda Drive.
It is impossible to say this project is finished as it leaves the city of Desert Hot Springs on the hook for maintenance costs due to an improperly constructed flood control channel running through the development.
Also in the Walter Luce’s Desert Hot Springs portfolio was The Terraces located on Hacienda Drive. This was also left incomplete but was later purchased by Hitzke Development who finished the project by converted to low income housing. For an unknown reason that Meyer Luce project is not listed anywhere on their portfolio or website.
The Initial Hoard of ‘Forward Thinking’ Hype
A scanty number of self published press releases to make new believers…