By Shawn Raymundo

A group of local business owners have filed a lawsuit against the Rancho San Clemente Business Park Association, challenging its recent sale of open-space property to a nonprofit organization that intends to develop a homeless shelter.

Olen Commercial Properties, which operates out of the business park and offered to purchase the land last fall, is among a handful of business park tenants that are suing the Association and the Emergency Shelter Coalition.

According to the complaint, filed in county court on Friday, Feb. 7, the businesses allege that the Association’s leadership didn’t possess the legal authority to execute the sale to ESC, as it lacked the support of its members. The businesses are also seeking to void the agreement, which had been finalized late last month.

Acknowledging that he hadn’t reviewed the claims or arguments raised in the lawsuit as of Tuesday, Feb. 11, Ed Connor, attorney for ESC, said he’d be surprised if the “dissident members had any legitimate grounds for invalidating the grant deed.”

“Sadly, what seems to be driving the lawsuit is an unwarranted fear and dislike of the homeless persons who, for whatever number of unfortunate reasons, reside in San Clemente but have no safe place to sleep, shower, wash their clothes and obtain counseling and referral services,” he said in an email to San Clemente Times.

As of this posting, Bob Adams, president of the Business Park Association, could not comment on the lawsuit, as he too had not reviewed it yet.

In a letter forwarded to other business park tenants on Tuesday, Olen Commercial looked to rally additional support for the lawsuit, citing concerns over security and property values.

The development of the shelter, Olen wrote, “will cause irreparable harm to the value of the properties in the park, as well as disrupt business operations.” It later added, “The certainty of financial harm to each of the owners, as well as the impact on security and business operations within the park, is substantial, making this a necessary business decision to protect our substantial investment in this park.”

Last September, the Association notified members that a pair of land parcels amounting to 10 acres off Avenida Pico was in escrow, as the Coalition would purchase the land for $19,500. As a condition of the sale agreement, the Coalition sought to terminate the CC&Rs over the property—an action that required a vote of the business park tenants.

When the city got wind of the sale agreement, Olen, as well as the city of San Clemente, made offers of $20,000 for the land if the sale with ESC were to fall through. The city wanted to acquire the parcels and turn them into a conservation easement as a means of thwarting one of the Transportation Corridor Agencies’ proposed toll road route extensions.

The pair of parcels had a low price tag because open space restrictions kept them at the low appraisal value of $12,000. The Association, which said has spent an average of $20,000 annually for maintenance-related costs, had wanted to offload the property for years.

After a lengthy voting period over the CC&Rs that had been delayed to late December, the results were roughly 2-to-1 against terminating the rules and guidelines. However, a month later, ESC decided to move forward with the sale anyway, officially buying the property.

Olen notes that several business owners had vehemently objected to the sale during that December meeting to count the votes.

The companies allege in the lawsuit that because they had vehemently opposed both the termination of the CC&Rs and the sale in general, the Association violated its fiduciary duty to all of its members by agreeing to the sale “in direct contravention to the will of the Association’s membership.”

According to the complaint, Olen and the fellow plaintiffs are seeking declaratory relief from the court that the Association was not authorized to make the sale and, therefore, should be canceled.

Pointing to a 1985 document called the “Master Declaration of Covenants, Conditions, Restrictions and Reservation of Easements for Rancho San Clemente Business Park,” referred to in the court filings as the Declaration, Olen claims the Association was required to get a majority of membership approval before selling the property.  

One of the conditions of the sale agreement guarantees that ESC won’t build a shelter within the main part of the business park, which lies within the city’s Emergency Shelter Overlay Zone—the area of the city where emergency shelters can operate.

To comply with the state’s mandate under Senate Bill 2 that requires local municipalities to come up with a plan for providing homeless shelter access, the city, back in 2016, identified the Business Park as a section in the Overlay. Commonly referred to as an SB2 zone, the Overlay allows as many as 70 shelter beds for the homeless.

Further criticizing the business park members, Connor on Tuesday wrote that they “should be thanking” the Association “for getting ESC to agree not to develop a shelter in the Business Park,” rather than attacking the Association.

“Apparently, the dissident members would rather see ESC exercise its rights under state law to establish a shelter complex in the Business Park without the need for a permit,” Connor said in the email. “That seems to be the objective of the lawsuit, but it is doubtful that the majority of owners in the Business Park would like to have a shelter operated right next door to their businesses.”

As of Wednesday, Feb. 12, no court hearing date had been set.

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