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CUSD Ready to Pay Back Developer for Land It Used to Build San Juan Hills High

The district will sell bonds at the end of October to start paying off a $6 million debt to the builder of Valinda.

Valinda homes in San Juan Capistrano in the foreground, San Juan Hills High School in the background. Patch photo credit: Penny Arévalo
Valinda homes in San Juan Capistrano in the foreground, San Juan Hills High School in the background. Patch photo credit: Penny Arévalo

The Capistrano Unified School District is finally close to making good on a settlement agreement with the developer building the homes next to San Juan Hills High.

The Whispering Hills builder, Rancho San Juan Development, sued the school district in 2009 over the last payment it said the district owed for the land that eventually became the school. The school district said it was planning to make the $6-million payment with proceeds from special taxes, known as Mello Roos fees, raised by the Whispering Hills residents. Then the economy went bust and there were no homes into which new residents could move.

In May 2011, the school district settled the lawsuit, promising to pay back the landowner from the Mello-Roos taxes collected. The agreement also included a land swap to resolve a boundary issue that kept the high school’s football stadium from being built with the rest of the school, which opened in 2007.

Fast forward to March 2012, when the first homes at what’s now called Valinda went on the market.

The agreement with developer requires the school district to issue the bonds when 70 homes have been sold, said Clark Hampton, deputy superintendent of business services. That time has come.

Of the about $10 million in bonds to be sold, $6 million will go straight to the developer, said Lori Raineri, a consultant with CUSD. There will be little, if any, proceeds the district can use to construct additional school facilities.

The rest will go to the city of San Juan Capistrano for providing various municipal services to the new development.

“The developer is saying it’s time to pay me back,” Raineri told the Board of Trustees at last week’s meeting. The two parties are working cooperatively, she added.

The school board will authorize the sale of the bonds at its Sept. 25 meeting and they are scheduled to be sold Oct. 31, Raineri said. The developer will receive the payments in increments, with the first one totaling $2.8 million.

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