$67 Million Suit Set for Trial

A real estate concern's $67 million lawsuit against Riverside County for alleged breach of contract is set for trial later this month, despite repeated requests by county attorneys to have the suit summarily dismissed.

The Temecula-based French Valley Business Center LLC is seeking compensation and damages for the county's alleged decision in 2009 to back out of a project that involved erecting a new office complex for the district attorney's and public defender's offices.

To read about the suit,

Orange County Superior Court Judge Derek Hunt has scheduled trial proceedings to get under way Nov. 28 in Santa Ana. However, attorney Fletcher Paddison, representing the plaintiffs, told City News Service the trial could be delayed a few days.

Paddison said more than 20 letters sent to the county's attorneys seeking settlement negotiations over the last six months have gone unanswered. County spokesman Ray Smith did not immediately respond to requests for comment about the case.

The county has submitted three separate motions challenging the merits of the plaintiffs' allegations and asking for summary judgment in favor of the county. Hunt rejected each motion.

"We are disappointed that we've had to resort to a lawsuit to remedy our situation, but we are glad to finally get our day in court,'' said Bruce Keeton, managing partner of the French Valley Business Center. "This is certainly a cautionary tale for any company that does business with the government in a public-private partnership.''

Keeton alleges a decision by the county in early 2009 to withhold building permits for the development of 10 acres where the D.A.'s and public defender's southwest operations were to be located caused the contractor to default on agreements with subcontractors and abandon an otherwise viable enterprise.

The French Valley Business Center, a partnership between Keeton, who runs Keeton Construction Co. Inc., and David Phares, owner of D.L. Phares & Associates, received lease rights from the county in February 2006 to a 37-acre tract near French Valley Airport. The spot was considered a choice location for construction of a business complex.

At the time, the D.A.'s office and the Office of the Public Defender were under pressure from the state to vacate long-occupied space at the Southwest Justice Center.

Without seeking any competitive bids, the selected French Valley Business Center to undertake the project.

According to county officials, the plan was for the developer to acquire private financing, and when the office complex was complete, the county would lease the property for the next 50 years.

In the fall of 2008, representatives from the French Valley Business Center notified the county that because of the economic downturn, obtaining loans was proving difficult, leading to inevitable delays in construction.

The Board of Supervisors gave the real estate concern until the beginning of 2009 to secure funding to proceed with a scaled-down version of the original project, using 10 acres instead of 37.

According to the lawsuit, in March 2009, the plaintiffs' applications for building permits were denied by the county, which stated that the developer had missed a February deadline to seek permits.

The plaintiffs argue the only deadline they were aware of fell on April 1, 2009. Keeton characterized the county's earlier date as a "secret deadline.''

According to court papers, in a Feb. 19, 2009, meeting with county Economic Development Agency Director Rob Field and Supervisor Jeff Stone, the developer's representatives were never "advised ... of a February 1 deadline.'' "FVBC was again advised that it had until March 31 to pull permits,'' documents state.

The county settled on an alternate relocation plan for personnel from the district attorney's and public defender's offices. The French Valley Business Center filed suit in 2010 in Orange County Superior Court.

According to a company statement, FVBC "spent millions of dollars preparing plans, obtaining county approvals, completing grading (and) paying land leases,'' resulting in steep losses when the project was derailed.