Lobbying Effort Tries to Salvage Unique Agreement : Off-Road Park Plan Kicks Up Dust in Legislature

After years of frustration and delays, off-road vehicle buffs thought they had finally found relief. And that relief was spelled R-O-Q-U-E, as in Roque de la Fuente II, the flashy Otay Mesa developer and Cadillac dealer.

Earlier this year, De la Fuente had agreed to let the state lease 920 acres of his family’s land on Otay Mesa so off-road enthusiasts like himself could legally ride their three-wheelers and motorcross bikes through the canyons just this side of the Mexican border.

The only thing De la Fuente asked--besides $5.3 million over 20 years, of course--was that the state structure the deal so his name would be off any documents and he could be held harmless for accidents on his property.

What resulted, state officials agree, is a unique agreement: The state would pay De la Fuente his money up front and take clear title to the land. Then, in 20 years, it would sell it back to him for $1, although the property could be worth $100 million by then.

Instead of relief, though, the unusual agreement has caused a bit of indigestion for lawmakers.

For one, the agreement came as a bit of a surprise to legislators, since San Diego lawmakers proposed it as an “augmentation” to the $49.5 billion state spending plan. During the closing days of budget deliberations, some prominent legislators were concerned that it required their approval without the benefit of a full-blown public hearing.

In addition, the proposed price of De la Fuente’s land--and the fact he could buy it back for a mere $1--caused a chorus of private murmurs among legislative budget analysts. They asked: Was this a good deal for the state?

After all, just two years ago a state appraiser suggested paying De la Fuente no more than $77 an acre a year to lease the property, according to an internal state memo. But the proposed agreement would pay him $288 an acre--almost a 275% increase.

Bothered by these questions, a joint Assembly-Senate budget committee rejected the deal and left it for dead.

But now De la Fuente and the off-roaders have mounted a last-minute lobbying scramble to see if legislators are willing to resurrect the proposal before adjourning for the year on Sept. 15.

“I see a sort of sense with Roque that he wants an answer one way or another,” said Robert E. Ham, the Sacramento lobbyist hired by De la Fuente and the off-roaders seal the deal. “That’s why he took me on, to get a sense to see if this is going to happen.

“If not, it’s adios and he has to look at something else,” said Ham.

And De la Fuente says he won’t have to look very far, either.

The Otay Mesa land baron said the City of San Diego is considering using his border land as a place to transplant dried sludge from overburdened Fiesta Island and Brown Field. The county is eyeing his property for a new landfill, and just recently a company proposed paying him $130 million to use 600 acres of the proposed off-road vehicle park to build a private garbage dump.

That’s not to mention the proposal to build a new international airport three miles away on the United States-Mexican border. To build that airport, acres of industrial warehouses would have to be condemned on the mesa and the value of De La Fuente’s property would skyrocket, he said.

“It eliminates some of my competition and it would basically quadruple the value of my land,” said the 34-year-old millionaire. “No, maybe double it.”

Any or all of those scenarios would strip the gears of off-roaders, who long have coveted De La Fuente’s land as a place to open the throttle on their recreational vehicles.

Closest Area 3 Hours Away

For years, the county’s off-roaders have complained vociferously about the need for a nearby area of their own. Currently, the closest state-owned riding area is at Ocotillo Wells, 38,000 acres located next to the Anza-Borrego park.

But while it is the largest of the state’s seven vehicular recreational parks, San Diego off-roaders say that driving up to three hours over the mountains and into the desert to use Ocotillo Wells is just too much of a hassle.

“What we want is a facility where somebody can jump on the freeway, unload and ride around for a couple of hours and then come home for dinner,” said Lynn Brown, feature editor for the San Diego Off-Roader Magazine.

Building such a nearby vehicular playground also would cut down on the number of die-hard off-roaders who break the law by riding their contraptions on private and public tracts of vacant land in the county, Brown said.

“We will be able to get them off the hills, the canyons and back yards, where they are bothering people and are causing environmental damage,” Brown said. “Right now, if the sheriff stops you, he had no place to send you but in the desert.”

Pressure From Off-Roaders

The San Diego complaints have reverberated to the state Department of Parks and Recreation in Sacramento. Not only are the off-roaders particularly effective in writing letters and making phone calls, their San Diego County numbers are the second highest in the state--66,795 compared to 124,000 in Los Angeles. Everyone who registers an off-road vehicle pays $20 for a two-year “green sticker,” and the money is dedicated by the state to building and maintaining off-road riding parks.

At first, the state intended to buy Sycamore Canyon, located between Santee and Poway, in eastern San Diego County. But environmental and wildlife considerations forced state officials to abandon that project after a March, 1982 feasibility study.

It was the off-roaders--and particularly Brown--who suggested that the state take a good look at the Otay Mesa, particularly 1,200 acres stretching east from the Otay Border Crossing.

The only neighbors, Brown said, would be the Mexican border on the south, wilderness to the east, a proposed race track on the west, and the county’s proposed jail on the north.

“We thought, “Geez, what better neighbors could we have?’ ” Brown said.

Mother Owns Large Parcel

Of the three landowners, the largest--and most crucial--was Rancho Vista Del Mar, which De la Fuente says is 100% owned by his mother. De la Fuente, the company’s vice president, acts on her behalf.

“They wanted to buy and my position was that Otay Mesa land is going up by a rate of 3% a month since 1982,” De La Fuente said. “I don’t think you can have a better investment.

“I said, ‘Look folks, you should not have wasted your time and energy. The property is not for sale.’ ”

Subsequent discussions centered on the possibility of leasing the land. In an August 1987 internal memorandum, a state Department of General Services appraiser wrote that the purchase price for 978 acres of De la Fuente’s Otay land was worth $4.59 million, according to a state source. If the property were leased, De La Fuente should receive between $50,000 to $75,000, the memo says.

The $75,000 lease would break down to about $77 an acre--a fair price, the appraiser argued, for property that would only fetch about $10 an acre for grazing, the only other use allowed under its current zoning.

Even discussions over leasing the land stalled. The state offered to give De la Fuente 1% a year return on the value of his land. He wanted 8%.

“I told them, ‘Why don’t you go and lease all the land you want from someone else?’ ” De La Fuente recalled.

Worried About Liability

Besides, there was another hitch.

“My lawyers told me that if one of these guys breaks a leg, breaks a head or gets killed, I would be named in a lawsuit and there is not enough money in the world to make it worth my while,” said the young millionaire, who owns two off-road vehicles himself.

When discussions about leasing the property resumed about eight months ago, De la Fuente made his concerns about potential lawsuits his top priority, the developer and state officials say.

“When the state approached me for the second merry-go-round, I told the state that unless it was willing to resolve the liability issue, I’m not interested in any numbers,” De La Fuente said.

So was born the concept of a “limited term acquisition,” a transaction that would actually allow the state to purchase the property with the understanding that it be sold back to De La Fuente in 20 years.

In all, the transaction for the 1,200 acres would cost $7 million. The money would not come out of general tax revenues but the $14 million the state has collected in off-road vehicle green sticker fees.

No Taxes Would Be Paid

The arrangement also would have an added benefit to De la Fuente. As long as the state owned the land, he wouldn’t have to pay taxes, estimated by one analyst to be about $600,000 over the 20 years.

“This one looks like a pretty good deal for the State of California to have,” said state Sen. Larry Stirling (R-San Diego). “If you take the total amount of acres involved, and divide it by the annual rental, and divide that by month, it comes to a pretty low price per month.”

But when Stirling and Assemblyman Carol Bentley (R-El Cajon) asked their colleagues to include the deal in a budget amendment, state lawmakers were less than impressed. The joint Assembly-Senate budget committee turned thumbs down on it.

According to Ham, the lobbyist, legislators felt uncomfortable because the unusual agreement had not been discussed thoroughly in a public hearing. Lawmakers were also uneasy about the fact that De la Fuente would buy the land back for a mere $1.

So Ham and De La Fuente convinced an Assembly committee on the Resources, Agriculture and the Environment on Aug. 23 to conduct a 90-minute hearing on the agreement--a meeting that Ham claims went a long way to ease legislative skepticism.

State Drops $1 Payback

And as another concession, state park officials have dropped the provision that De La Fuente buy back his property for only $1--the kind of thing makes budget analysts give a double-take. The legislation was changed to give De la Fuente his land back for nothing.

Asked about the discrepancy in price between the 1987 appraisal and the current deal, Ham said it is all the more proof that the state can’t afford to wait any longer to sign an agreement for the Otay Mesa off-roader park.

“We waited before and we could have gotten it for less,” he said. “If we wait any more, the prices will go up to the point that the (green sticker) fund will not handle it.”

Ham said he is trying to make sure the proposed agreement is included in an omnibus park bill legislators are drafting before their Sept. 15 quitting date to restore some of the money cut from the 1989-1990 budget by Gov. George Deukmejian.

“I’m trying to keep this alive long enough that it might be considered to be put into that bill,” Ham said.

And is De la Fuente worried? Although he is pushing for an answer from the state, the developer said he knows his property is a hot item, off-road vehicle park or not.

“I couldn’t care less one way or another,” he said.