June 27, 2008






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News that the developers for Audie Murphy Ranch had pulled out of the project didn't come as much of a surprise to residents attending Tuesday's public meeting, but none were happy that it meant the opening of "new" Newport Rd. could be delayed for up to two years.
Audie Murphy developers abandon work on Newport

     At a public meeting held Tuesday night in the City Multi-purpose Room, Riverside County Transportation Director Juan Perez confirmed for a group of approximately 40 residents something they already knew: the developers of Audie Murphy Ranch have pulled out of the project due to financial reasons and will not complete the remainder of the road improvements required by the county, leaving realigned Newport Rd. approximately 80 percent complete and unable to be opened in its current state.
     Juan indicated that the developers have reported they have invested $20 million to this date in grading, roadwork and utility work and had hoped to recoup some of their money through the sale of Community Facilities District bonds, but with current economic conditions, the land values are no longer there to support bond sales.
     In addition, with the housing market downturn and construction slowdown, developers say the project itself has lost value and it is no longer feasible for them to continue with the project at this time.
     While the developers did post a completion bond for the improvements that is meant to cover the cost of any work not performed, Juan explained the process for filing a claim is a long one, likening it to filing an insurance claim. The county has already taken the first step, he said, submitting a letter to the developers, with a copy to the bonding company, demanding a completion date as well as a punch list describing the amount of work remaining and the estimated cost. No response had been received from the developers as of Tuesday’s meeting.
     The county has planned to perform its own survey of the roadwork and prepare an estimate, which it will submit to the bonding company. Much like an insurance company, Juan explained the most likely result will be a denial of the claim, after which time the county will need to file a civil suit, something that might not come to fruition for 18 months to two years.
     The remaining work consists of completing the realignment of Newport Rd., moving an EMWD water line, installing a sound wall and constructing a bridge at Salt Creek. The county is looking into alternatives, including ways it might be able to provide the funding to finish at least enough of Newport Rd. to open it to traffic.
     One such alternative is requesting Transportation Uniform Mitigation Fee (TUMF) money through the Western Riverside Council of Governments (WRCOG). These are fees paid by developers of residential, industrial and commercial property to fund transportation projects that will be required as a result of the growth the projects create. Those funds would then be repaid upon award of the bond money, at which time the remainder of the required work could also be completed.
     Using this alternative, the county could open the two south side lanes, one for each direction, within a few months of receiving the funds; the request will likely be heard by the executive committee, WRCOG’s decision-making policy board, in August. The board meets monthly but is dark in January and July. According to City Manager Lori Moss, there should be little trouble with the request being approved, as both the County of Riverside and City of Canyon Lake are supporting the request and Councilmember John Zaitz, who holds the position of second vice-president with WRCOG, will help ensure the request is processed properly.
     Residents at the meeting, many of whom own homes that back up to the roadwork, expressed anger and disgust over the actions of the developers and questioned whether there were any other options open that would allow the work to be completed in its entirety any faster. “We know it’s important to you and we would love to get it done too,” said Juan, adding that it is at the top of the county’s priorities but explaining that the legal process is clear and they simply have to go through it step by step.
     With both alternatives having its own positives and negatives, residents were divided on which alternative they preferred, with some wanting Newport Rd. opened as soon as possible, even with only two lanes, and others preferring the county go after the bond money first, then complete all aspects of the remaining work. Juan promised to provide an update through the City of Canyon Lake within 30 days.


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