Ahmanson Ranch Fails to Win Support for Bond : Housing: Ventura County supervisors reject the company’s $140-million plan.

Officials have quietly rejected a proposal to pull Ventura County into the financing of the giant Ahmanson Ranch housing project.

Developers asked the county two weeks ago to support the sale of $140 million in bonds to pay for police and fire protection and other basic services in the new community west of Agoura Hills.

Ahmanson Land Co. President Donald Brackenbush said his company gave up the proposal when officials rejected it, but it will pursue other financing options discussed with the county.

The proposal called for the issuance of so-called Mello-Roos bonds, which state law allows to finance construction of utilities in new communities. The bonds allow developers to shift costs of services such as roads and sewers to home buyers. Failure to repay the bonds can jeopardize the credit rating of government agencies that back them.

Ventura County Supervisor Maria VanderKolk, the board’s chief supporter of the housing project, said officials quickly dismissed the proposal.

“They were taking their shot, and we told them very succinctly, ‘No.’ End of discussion,” she said.

Although a majority of the board has tentatively supported the 2,600-home project as a way to acquire 10,000 acres of public parkland, county officials said they will not give Ahmanson preferential treatment.

“There may be a perception out there that because of our agreement to fast-track this project, the county may be a pushover in a lot of different areas,” VanderKolk said.

“But we’re going to make sure this is a healthy thing for the county, that this is not going to be a drain or harm our credit rating,” she said.

Supervisor Vicky Howard, who participated in the meeting, said the Ahmanson company presented county officials with a chart outlining a series of projects to be paid for with bonds.

“Frankly, I was surprised at the extent of the request,” Howard said. “We didn’t look at their proposal in any detail before rejecting it.”

Ventura County Public Works Director Arthur Goulet, who also attended the meeting, added: “In a game of bridge, you only get one trump card. Ahmanson used it to fast-track its project. . . . We weren’t offended by their proposal--we simply did not support it.”

Ventura County officials agreed to put the Ahmanson project on a fast track in December, so that state and federal funds committed to the purchase of parkland would not be lost to budget cutbacks.

Both county and Ahmanson representatives said Tuesday that the rejection of the Mello-Roos proposal would not jeopardize the overall project, which would cluster the Ahmanson and Jordan housing projects at a single location and turn thousands of acres of mountain property into public parkland.

“As far as we’re concerned, the process is moving along without delay,” said planner Dennis Hawkins, the county’s project manager.

Brackenbush said the bond proposal was just one among a series of financing options discussed with the county, and that his company gave it up when it met with rejection.

“We are preparing a detailed plan description that . . . will outline a series of financing options, and believe me, the words Mello-Roos will not be on it,” he said.

Brackenbush said his company will explore such financing alternatives as tax-increment financing, community assessment districts and private funding.

Under tax-increment financing, yearly property tax increases are set aside to pay for improvements, Brackenbush said.

Property owners in community assessment districts pay a fee for amenities such as lighting or parking structures.

Howard said Ventura County is willing to look at such financial alternatives as long as improvements directly benefit homeowners and the county is not saddled with a heavy debt. The Mello-Roos bonds would pay for such services as fire stations that would be used by residents outside the development.

Goulet said developers originally asked to pay for almost half of the $300 million in required community improvements through Mello-Roos financing.

The developers argued that such low-interest, tax-free financing would benefit buyers who would pay less for their houses, Goulet said.

“But we’re not convinced that public financing leads to lower prices or that home buyers like the liability,” he said.

Moreover, Goulet added, the county does not want to be seen as a partner in development. “We don’t want to place ourselves in a position of being painted as proponents of development,” he said.

The Mello-Roos bonds are named after state Sen. Henry J. Mello (D-Watsonville) and former Assemblyman Michael Roos, who won passage of the law in 1982.

The law allows local governments and developers to issue tax-exempt bonds to pay for community and school improvements.

The law was passed in response to Proposition 13, the 1978 ballot initiative that limits property taxes.

With the sponsorship of local governments, landowners can band together to support the formation of a Mello-Roos bond district. After the land is developed, buyers make the bond payments in addition to their property taxes.

According to the California Debt Advisory Commission, $3.6 billion in Mello-Roos bonds has been sold through 1991, mostly in fast-growing communities in Orange, San Bernardino and Riverside counties.

But California’s weakening real estate market makes Mello-Roos bonds an increasingly risky proposition, financial experts say. That is because the bonds are secured ultimately by a developer’s land--collateral that in some areas has declined markedly in value.

Financial consultants told The Times last month that up to 10 of California’s 226 Mello-Roos districts could default in the next two years. Last year, Oxnard became the first Ventura County city to suffer from unpaid Mello-Roos district fees.

On Jan. 8, the city began foreclosure on eight undeveloped parcels at the Oxnard Town Center after Santa Clara Development Ltd. and Oxnard Town Center Ltd. were unable to pay $1.04 million in special taxes due April 10 and Dec. 10 of last year.

The taxes were owed on $14.77 million in bonds for roads and utilities. So far, only one office building has been built on Town Center’s 12 parcels.

Goulet said that even if the Ahmanson company made all of its bond payments on time, the bonds would still be a liability to the county.

“First of all, we’d be adding $140 million to our debt burden,” he said. “Credit rating agencies pay close attention to how much debt governments have. We’re very proud of our credit rating. We don’t want to risk it by taking on too much debt.”

NEXT STEP

Ahmanson Ranch Co.’s final project description must be submitted to the county by Feb. 12. Over the next five months, the environmental impact of the development will be analyzed and development agreements and changes to county planning maps will be drafted. Alternative proposals also will be analyzed. Supervisors will consider the package in late July.