BUSINESS NEWS : W. Covina Agrees to Help Finance 291 Homes Near BKK Dump


City officials dismissed concerns of a sluggish economy and drought and agreed Tuesday to help a developer finance construction of 291 luxury homes near the controversial BKK Corp. landfill.

The council voted 4 to 1 to create a Mello-Roos Community Assessment District that will allow a special tax on the new development. Councilman Richard Jennings voted against the measure, saying the city should help finance public facilities, not private development. He was also concerned that the developer waited until after some of the improvements were made before asking the city for help.

For the record:

12:00 AM, Mar. 03, 1991 For the Record
Los Angeles Times Sunday March 3, 1991 Home Edition San Gabriel Valley Part J Page 2 Column 1 Zones Desk 3 inches; 103 words Type of Material: Correction
South Hills development--A map in Thursday’s San Gabriel Valley section showed the BKK landfill as being larger than it actually is. Though BKK property extends east to the West Covina city limit and into Walnut, the landfill ends west of the city limit and does not abut the eastern portion of the proposed South Hills subdivision.
The accompanying story incorrectly characterized the uses of a special bond issue the West Covina City Council will vote on March 25. The bond money, under the Mello-Roos state law, can be used only for streets, sewers and other improvements.
Also, city spokesman Tom Manheim said the bond underwriter intends to include a full disclosure statement on the nearby BKK landfill to prospective bond buyers.

On March 25, the council will vote on whether to issue up to $37.5 million in bonds to pay for streets, sewers and other improvements, as well as construction of the homes on the proposed 308-acre site west of Citrus Street. Construction is to begin in April, with completion expected sometime in 1992.

Hassen Development Co. has completed 90% of the improvements, including grading, storm drains, sewers and water facilities, according to city officials. The estimated cost is $25 million.


During a six-hour public hearing, some people questioned whether the city should finance such a risky venture when the region is already faced with a severe drought and a weak economy.

“Because of the recent real estate market conditions and the soft economy, the market for luxury housing in Southern California is soft,” said Joseph J. Evans, of Empire Economics, a real estate consulting firm hired by the city.

Royall Brown, a West Covina resident who also is director of the Upper San Gabriel Valley Municipal Water District, pointed out that the Las Virgenes Municipal Water District in northwest Los Angeles County had already put a moratorium on new water meter hookups, because of the drought. West Covina gets its water from the Metropolitan Water District.

But city officials said they are confident the slow economy will pick up and predicted that the South Hills project will generate about $2 million in building fees and more than $500,000 yearly in property taxes.

The 1983 Mello-Roos law allows taxes to be imposed on planned communities in California before residents move in, to help developers pay for streets and other improvements.

Taxes on the single-family homes in the proposed South Hills subdivision will vary from $8,060 to $14,508 a year, according to the size of each house. The money from the tax will pay off the bonds and interest.

Evans, however, said it would take at least eight years for the developer to sell the homes at estimated prices of $630,000 to $1.3 million. He also said the development’s location near the landfill could hurt sales.

In 1986, the U.S. Environmental Protection Agency determined that toxic wastes at the dump threatened ground water and ordered a cleanup. On the advice of the state Health Services Department, the city imposed a two-year moratorium on residential development within 2,000 feet of the dump.


The South Hills site is outside the moratorium area. The city lifted the moratorium in 1988. EPA officials are still working with BKK on the cleanup.

When the council votes on the bond issue next month, a major factor in the discussions will be how much information about the dump should be included in the disclosure statement to prospective bond buyers.