County May Be a Bidder in Its Sale of Rancho del Rio

Sometime in late February, a for-sale sign will go up on the 213-acre Rancho del Rio, once allegedly the home of an international drug-trafficking ring, now little more than a scrappy collection of weathered buildings and chaparral owned by Orange County.

The county hopes to fetch at least $1.4 million for the land, which has no running water, no electricity, no sewer hookups. The real estate market these days is desperately soft, the ranch is miles from the nearest development, and the county estimates that it will be a decade until other homes spring up in the surrounding area.

So who’s going to bid for such a property?

Surprisingly, it looks as though there will be no shortage of interest, county officials say. Investors looking for a personal estate and developers hoping to put up new homes lead the private sector pack. The county itself is also preparing to let one of its agencies bid, and a consortium of businessmen might rally to buy it for Sheriff Brad Gates to turn into a drug-enforcement training center.

All of which leaves Rancho del Rio in the same position it has been in since the property was turned over to the county after being seized by a task force of state and federal agents in a 1985 drug raid: caught in the middle of a tug-of-war that has county officials holding both sides of the rope and the federal government standing ready to declare the winner.

“Absolutely, there will be interest in this property,” said Pat Ormsbee, an investment broker with Grubb & Ellis in Newport Beach. “It has some problems, but anybody would be interested in controlling a piece of property of that size in Orange County.”

Gary Gornnert, a Newport Beach real estate broker, agreed. “Good property is unique,” he said. “Even though the market’s a little weak, there’s always interest in good property.”

Ormsbee and Gornnert are two of 17 property owners, developers and brokers who have contacted the county about their interest in the ranch sale. Many of them said they expect the county to receive at least a handful of private bids when the land goes on the market.

The ranch, developers say, might not be valuable in the short term, but for an investor willing to wait, it could be a catch.

That’s enough to get the attention of real estate interests: Housing developments, a golf course, a personal estate and an equestrian center are just a few of the long-term possibilities for the ranch.

Still, the two most intriguing potential bidders do not even show up on the county’s list of interested parties, and they might determine the outcome of the ranch debate.

In one corner is the county’s Harbors, Beaches and Parks agency, which officials say will submit a bid for the land. While less certain, another possible contender could be a consortium of private businessmen, who might join the fray in support of Sheriff Gates.

If the property went to Harbors, Beaches and Parks, it would remain as open space, preserved for future generations.

If the ranch wound up with the sheriff’s backers, it would be for the purpose of turning it into a narcotics enforcement training center.

“My guess is that there will be a move to put together a consortium to try to buy this property,” said Eileen Padberg, a political consultant who works with Gates. “All of Orange County law enforcement is unanimous in its support for this center, and there are plenty of people who’d like to see it built.”

Although members of the Board of Supervisors turned down the idea of deeding the property over as a narcotics center, since a continuing budget crisis has them searching for any and every revenue source, county officials said last week they would be happy to see private investors step in on the sheriff’s behalf.

“They can put a bid together just like anyone else,” said Ronald S. Rubino, associate county administrative officer for management and budget. “The board didn’t vote no on drug training; they voted no on this particular drug training center proposal.”

Gates, while confirming that talks for buying the land have taken place over the past several months, added that they have never gotten down to specifics.

While the plans of Gates’ backers are unclear, the county’s intentions are on the table. Harbors, Beaches and Parks is preparing to enter a bid whatever turns out to be the property’s final estimated value. Under that scenario, the agency would buy the land for open space, and money from the sale would go to the regional narcotics suppression fund.

The sheriff administers that fund, but supervisors make the final decision on spending money.

John Sibley, deputy director of the Environmental Management Agency, said parks officials would be able to pay for the land by shifting other park acquisition projects to a back burner. Also, the deal for the ranch is not expected to close until after the next fiscal year begins in July.

The bigger issue might be whether the federal government, which has the right to disapprove of both the buyer and the price for the ranch, will allow a county agency to bid for it. Under the agreement with the U.S. Justice Department, the land must be used as a drug training facility if it is owned by the county.

U.S. Atty. Lourdes G. Baird in Los Angeles reminded county officials of that agreement in a recent letter, adding: “I wish to express to you my continued support that Rancho del Rio be developed as a law enforcement training center.”

County officials are confident that they can amend their contract with the federal government to allow the sale and say they expect the agency to be a bidder in February. Among other things, a Harbors, Beaches and Parks bid would prevent a private company or group from getting the land at less than its appraised value, officials said.

“This will make sure that nobody low-balls the price,” Rubino said.

Supervisors agree, and many of them look forward to the end of the training center debate, which has occupied them for years and so far produced little more than discord.

“This is just the wrong time and the wrong circumstance for that center,” Supervisor Roger R. Stanton said following the board vote last week. “We need to get on with something else.”