Will County Fail to Make Payment for Purchase of Holmwood Canyon?

As San Diego County’s budget crunch tightens, county officials and environmentalists fear that problems with the purchase of Holmwood Canyon in Solana Beach could hurt further county efforts to buy parkland.

Three years after borrowing $1 million from the state Coastal Conservancy to buy the 16-acre canyon on the edge of San Elijo Lagoon, the county is unsure how it will pay this year’s annual loan payment of $226,000.

The Holmwood agreement, like several other county programs, has fallen into the yawning maw listed as “Unfunded Priorities.”

The supervisors Tuesday will make another attempt at balancing the budget--balancing the county’s parks, for example, against the Sheriff’s Department.

While there appears to be little or no chance that the conservancy will foreclose and sell off Holmwood Canyon for development, county officials still fear that reneging on the lease payment now could make it tougher for the county to seek open space funds from the conservancy and other state government agencies in the future.

That could prove critical as the county, in tandem with the City of San Diego, begins the most ambitious open space venture ever attempted in North County: preservation of the verdant San Dieguito River Valley, which stretches from Del Mar to Sutherland Reservoir, 43 miles inland.

In early budget sessions, county officials suggested that the cities of Solana Beach and Encinitas, which share a desire to preserve the lagoon that divides them, be dunned for the Holmwood payment.

When that effort was informally but firmly rebuffed by the two cities, the county then suggested getting the money from payments received for allowing radio transmission antennas on Cowles Mountain near San Diego’s border with Santee. Supervisors rejected that idea, saying that the antenna money should remain in the fund for Mission Trails Regional Park, which includes Cowles Mountain.

So where does that leave Holmwood Canyon?

“At this point, it is sitting on a list of unanswered questions about how it’s going to be paid for,” said Lari Sheehan, deputy chief administrative officer for the county. Like other county officials, Sheehan is worried that reneging on the payment could blacken the county’s “credit rating” with the state.

“It could have a major impact on our dealings with the Coastal Conservancy and other state granting agencies,” Sheehan said, “ . . . the same as a person who does not make their home payments. Their credit rating suffers, and they find it much harder to borrow money.”

No Default on Record

Carol Arnold, project analyst with the Oakland-based Coastal Conservancy, said the agency, in its 10-year history, has never seen a local government renege on a payment. She said she was unable to predict what the conservancy would do.

“It is often the case with these local agencies that there is a budget crunch, and they don’t know where the money is coming from,” said Arnold, who helped arrange the Holmwood Canyon deal. “We tend not to panic on these things.”

The payment, the second of six annual payments, is due in September, although, unlike a private real estate deal, there is no penalty for lateness.

Under the deal, the county paid $2 million for the acreage to become parkland, including $1 million of county funds and the $1-million loan from the Coastal Conservancy.

Jack Peek, leader of the Friends of Holmwood Canyon, the environmental group that spurred the county to spare the land from residential development, said that, as a practical matter, Holmwood Canyon is safe, regardless of whether the payment is made.

“Since incorporation, that land is within the city limits of Solana Beach, and under the General Plan is classified as permanent open space,” said Peek, chairman of the city’s General Plan committee.

Peek shares the concern of Sheehan and others about the impact of reneging on the Holmwood payment on future park plans elsewhere in the county.

Hard Feelings Persist

The incorporation movement in Solana Beach--which led to a June, 1986, vote in favor of cityhood--was fueled by community anger over the county’s early handling of Holmwood Canyon, including the supervisors’ tentative approval of a 38-home development.

The latter action was blamed by activists for driving up the price of the land. Once the land was purchased, the homes were never built, but hard feelings persist.

“Holmwood Canyon was typical of the kinds of insensitive things the county was doing to Solana Beach,” said Solana Beach Mayor Margaret Schlesinger. “It epitomized that the county never listened to what we had to say.”

For that reason, Schlesinger is not eager to bail out the county financially. The community, she notes, kept its part of the bargain by raising $50,000 through private efforts toward the purchase price.

“We feel the county made a deal and should keep it,” Schlesinger said. “(Budgetary) times are tough all over.”

Supervisor Susan Golding, who represents Solana Beach and has championed the preservation of Holmwood Canyon, remains confident that the payment will be met. A top aide said Golding is steadfast that the county will not renege on the payment.

Still, the county has at least $1.43 million worth of programs--including the Holmwood payment--that have been identified as worthy of support by the supervisors but for which there is no money yet available, according to Sheehan.

That figure does not include additional funds being sought by Sheriff John Duffy, who has vowed to make a strong case at Tuesday’s hearing.

Holmwood Canyon sits west of Interstate 5, on the northern edge of Solana Beach, overlooking San Elijo Lagoon. Its marshy foliage is home to at least three officially endangered birds: the clapper rail, the California least tern, and Belding’s savannah sparrow.

“All three of those species speak to what has happened in California with increasing urbanization and decreasing coastal wetlands,” said county parks director Robert Copper. “Those were young, viable species until man began having an impact. They need a place to land and breed.”

Still, Copper says the county budget is equally endangered.

“It’s a tough issue,” Copper said. It gets down to mandated programs such as health and welfare versus non-mandated programs such as the Holmwood Canyon payment, he said.

“Holmwood Canyon is part of the broader question of the state’s allocation of property taxes, where we’re 57th out of 58 counties,” he said. “That makes running the county extremely difficult.”