Builder Wins $3-Million Judgment for Project County Backed Out Of

An Orange County development company has won a $3-million judgment against San Diego County over a failed project to build 223 units of low- and moderate-income housing in Spring Valley.

A jury made the award Wednesday, after a Superior Court trial over a lawsuit filed by G & S Properties Ltd. II, a limited partnership.

G & S and the county signed a contract in January, 1983, authorizing the developer to build the housing project on 11 county-owned acres at the intersection of Sweetwater Lane and Jamacha Road. The 55-year lease was approved by the Board of Supervisors on a 3-2 vote despite heavy opposition from neighbors.

But, in October of the same year, the county withdrew the lease because the state, through its Rental Housing Construction Program, had decided not to finance the project.

The developer claimed the state’s funding was not a condition of the county contract.

In 1985, the lawsuit went to court, but a judge ruled that state financing was a condition of the lease. But, in 1987, the state Court of Appeal reversed the ruling and sent the lawsuit back to Superior Court for another trial.

The outcome of that was Wednesday’s $3-million judgment.

Richard (Duke) Pekin Jr., the San Diego attorney representing G & S, said in a prepared statement that, “while we are pleased with the verdict, in a case like this everyone really loses--from the taxpayers and the developer to the 223 families who would have benefited from this project.”

Deputy County Counsel Mark Beesley, who handled the case, was not available for comment.

Pekin said he expects the county to file an appeal.

The property remains undeveloped.