County Ordered to Post Another $19.5 Million in Jail Land Dispute

Calling an original $6.4-million deposit “clearly inadequate,” a judge Thursday ordered San Diego County to post $19.5 million more while an appellate court decides how much the county owes developer Roque de la Fuente II for seizing 525 acres to build the East Mesa jail.

Superior Court Judge Jeffrey T. Miller, who had cut a jury’s verdict by more than half and ruled last month that the land was worth $22.9 million, said state law clearly requires the county to lodge with the court a deposit equal to the land’s value.

To bring the deposit up to $22.9 million, Miller said, the county has to add $16.5 million to the original $6.4 million. In addition, Miller said, the county must ante up interest on that $16.5 million, which De la Fuente calculated at about $3 million, for a total of about $19.5 million--all due in 30 days.

The county’s lawyers said the financially strapped county is likely to ask for more time, at least until March, to come up with the cash. De la Fuente said the county’s strategy “since day one has been postponement, postponement, postponement,” and he expressed hope that the appeal will restore the jury’s verdict on the land’s worth--$55.6 million.

Meanwhile, in a closed-door hearing after his ruling, Miller urged both sides to settle the case, attorneys said. “It’s logical to do that,” said one of the county’s attorneys, Ronald L. Endeman, although he stressed that he would not be involved in any talks.

De la Fuente said he has always been and remains willing to settle. “But, because the county is in a financial bind, it’s trying to buy the land not for what it’s worth but for how much they have,” he said.

County Board of Supervisors Chairman John MacDonald could not be reached Thursday for comment. Neither could other members of the board.

Supervisors have said repeatedly that the county can ill afford to pay $55.6 million.

One attractive solution, lawyers said, would involve a so-called “lease-back” arrangement, under which the county would let De la Fuente retake the land--near the U.S.-Mexico border about seven miles east of Interstate 805--and lease it back to the county, which would use it for the jail.

Michael Thorsnes, one of De la Fuente’s attorneys, emphasized that a lease-back is only one of a variety of options. But he called it “favorable for us and good for the county.”

Thorsnes also warned that, if the case is not resolved, De la Fuente may seek simply to dismiss the county’s court case to condemn the land, which led to the trial and the $55.6-million jury verdict. If successful, that move would return the land to De la Fuente.

Since about $70 million in improvements already have been made to the site--not just in buildings but in sewers and roads--that appears to De la Fuente to be a rewarding option, Thorsnes said.

The first phase of the jail, a 784-bed facility, is under construction and scheduled to be completed this spring. But county officials have said repeatedly in the past few months that they don’t even have money to pay a staff to run it.

The county took the land in 1987, after negotiating with De la Fuente for two years. Any governmental body may legally seize land under the eminent domain powers of the federal Constitution. But state law says the seizure may occur only after a court deposit of the probable value of the land, in anticipation of a legal fight over its worth. The county originally put up $6.4 million.

Last Sept. 28, the jury put the land’s value at $55.6 million, saying it was ideally suited for a jail. The county had contended at the lengthy trial that the site would best be used for houses.

On Dec. 28, Miller said $55.6 million was “excessive” and offered a new trial or a $22.9-million settlement. He based that figure on a review of several commercial and industrial properties introduced by appraisers who testified at the trial.

On Jan. 7, De la Fuente rejected the $22.9-million offer and opted to fight on appeal for all $55.6 million.

The appeals process--the case is scheduled to move next to the 4th District Court of Appeal in San Diego--could take months.

Still to be determined are the amount of De la Fuente’s attorneys’ fees and the interest accrued on a final verdict. The lawyers had asked for $15.4 million in fees, but that request, originally scheduled to be heard last week, is on hold pending an appellate court decision.