Diamond Bar Faces Test of Land Powers : Revenue: The city stands to reap a windfall if it’s allowed to make undeveloped land a redevelopment project area. But critics say the process thwarts the intent if not the letter of the law.

When city officials survey 700 acres of vacant pasture land near the San Bernardino County line, they see development opportunities.

Retail stores. Office parks. Restaurants. A much-needed high school. Perhaps one of three new University of California campuses.

To make all that happen, Diamond Bar officials are looking into including the land in a redevelopment project area, which would qualify it for redevelopment assistance. That raises the question of whether a state law designed to reclaim urban slums can be used to develop pastureland.

The City of Industry faces just such a challenge to its power to include undeveloped land in a redevelopment project area. A Superior Court decision allowed the city to designate a separate parcel of vacant land a redevelopment zone, but the decision is being appealed.

The land that Diamond Bar wants to acquire, which is owned by the City of Industry, is part of the 2,500-acre Tres Hermanos Ranch and is one of several areas that Diamond Bar is looking at for redevelopment.

Under the 40-year-old California Redevelopment Law, Diamond Bar could use eminent domain to acquire land and sell it to developers, to float bonds to finance land purchases and construction, and to collect property taxes.

A preliminary study by consultant A. J. Wilson estimates that a fully developed Tres Hermanos Ranch would bring in $20 million annually in property tax revenues. The city could reap an additional $10 million from redevelopment of the area occupied by the Diamond Bar Golf Course and commercial areas if they were acquired and made redevelopment project zones.

The only catch is that the rolling hills that make up Tres Hermanos Ranch aren’t covered with graffiti-scarred buildings, dilapidated businesses or streets in disrepair. Instead, walnut trees, cattle and an occasional pond dot the landscape. And near the San Bernardino County line, bulldozers are busy leveling the ground for a new Chino Hills Parkway.

The redevelopment law requires that an area be “blighted” and predominantly urban to qualify for redevelopment agency assistance. But rather than precisely defining blight, the law allows for a wide range of local interpretations, including inadequate public works and utilities, depreciated land value, and “social and economic maladjustment.”

At a City Council meeting Tuesday night, Wilson said though Diamond Bar “obviously is not a community overwhelmed with low-income families and deprived economically,” it still has “undeniable deficiencies,” such as inadequate public education facilities and traffic problems that could be helped with tax money from new construction in Tres Hermanos and other areas.

“It could be poor planning, it could be the absence of infrastructure, as long as it meets the letter of the law,” Diamond Bar Mayor Gary Werner said recently.

Industry’s Urban Development Agency purchased the Tres Hermanos Ranch about 10 years ago, before Diamond Bar was incorporated, and is drawing up plans for a reclaimed water reservoir on part of the property.

Meanwhile, Industry is leasing the grazing land for $12.50 a year to San Bernardino County resident Hal Arnold, who in turn is subleasing it to Industry Mayor John Ferrero, said Carl Burnett, the agency’s executive director.

Wilson said Diamond Bar is exempt from a 1983 amendment to the redevelopment law requiring project areas to be 80% urbanized, because the Tres Hermanos Ranch is owned by a public agency. City of Industry officials made the same claim when they included another 600 acres of vacant pastureland outside Tres Hermanos Ranch in a redevelopment zone.

But, the California Redevelopment Agencies Assn., a lobbying group for statewide agencies, is proposing legislation that would prevent cities and counties from including any vacant land in redevelopment project areas, said William Carlson, executive director.

County officials and watchdog groups have criticized cities that use redevelopment to stimulate growth in an undeveloped area, saying so-called “bare-land projects” are a twisted interpretation of the law. Some groups have successfully sued cities and counties, including Solano County, that established redevelopment zones in vacant areas, accusing them of illegally diverting tax money from schools and the county. Other times, suits were dropped when cities promised school districts and counties a larger share of property tax money.

“It’s highly unlikely that a vacant piece of property would withstand judicial scrutiny,” said Bruce Tepper, an attorney with the Los Angeles firm Kane Ballmer & Berkman, which is appealing the Superior Court decision on Industry’s redevelopment project. “I don’t think it would pass muster.”

But Wilson pointed to Pomona’s Phillips Ranch redevelopment plan, a 7,000-unit residential project that Wilson, then Pomona’s city administrator, oversaw. The Los Angeles County Grand Jury commended the development in a 1988 report, Wilson said, because Pomona’s redevelopment agency used property tax money generated from the development of Phillips Ranch to finance construction of an auto mall.

“Diamond Bar has very legitimate concerns,” Wilson said. “This community is not trying to play games with redevelopment.”