$3 million: Nothing to show for it

Collapsed Victor Road deal has Delta officials looking at other options
By Andrew Adams
News-Sentinel Staff Writer
Updated: Saturday, July 26, 2008 6:08 AM PDT

Delta College spent more than $3 million on the ill-fated Victor Road site — without buying a single acre.

All the money went for options, fees and studies. No land.

Now, what had been envisioned as a new Lodi campus is likely to remain a bucolic spread of vineyards and stately homes.

With cost overruns at other Delta sites — especially Mountain House near Tracy — and inflation, the school's $250 million in Measure L bond money has quickly diminished.

Now there's only about $64.5 million to pay for regional centers at Lodi and Manteca and a campus at Mountain House.

That has left the school looking at other options in Lodi, such as an existing building or another piece of land.

Much of the money the school spent on the Victor Road site was for site analysis and planning. The firm Carter & Burgess received a little more than $1 million for reviewing the property as well as developing two master plans.

The city of Lodi received $32,780 for work on the environmental impact report.

The firm Private Public Ventures Inc., based in Pasadena, received about $760,000 to help Delta pick the site off Victor Road in Lodi as well as establish the development agreement with private companies to add housing and retail.

Delta has also spent $450,000 on option payments to retain the right to buy the property.

However, the college's board of trustees voted 5-2 on July 15 to forgo paying another $150,000 to hang onto those options.

Some are relieved

Landowners near the Victor Road site say they are relieved to hear that Delta is looking elsewhere, especially because they found the development agreement troubling.

Initial plans called for homes, retail outlets and possibly even a hotel.

Mary Hoff, who led a group of residents opposed to the school's plans, said Delta should be looking at opportunities to establish a campus within the city limits of Lodi.

"We're happy that they're hopefully not going to build a campus here," she said. "We never thought it was a good idea from the beginning."

She said a college campus could be an "in-fill" development, and locating it in the city would preserve farmland.

Another property owner, Terry Fena, said he has always supported a Delta campus in the Lodi area, even perhaps in the rural area near his home. He just balked at the idea of a large commercial development.

"I've never been against Delta College," he said, "just the developers that came with it."

Those developers were Capitol Avenue Development and Investments, or CADI, and Granite Land Co.

Granite Land Co. is the real estate development arm of construction giant Granite Construction Inc., best known for building highways, bridges, tunnels and other infrastructure. In 2004, the company employed 6,000 and had revenues of $2.1 billion, according to the firm's Web site.

CADI and Granite formed a partnership company, Victor Ventures, LLC., which assumed CADI's side in a development agreement with Delta College in August 2007. CADI and Delta formed their original partnership in March 2007.

The college had initially been looking to develop 114 acres off Victor Road itself.

When that appeared to be too costly, it opted to use only 40 acres for an "academic village" and leave the remainder for Victor Ventures.

CADI staff have rarely discussed their plans for the area in public. The company did not return a call for comment or respond to an e-mail.

David Rodriguez, the consultant with PPV, helped lead the search for a location in Lodi.

His company also helped negotiate the development agreement, according to its Web site www.publicprivateventures.net.

PPV lists the Delta project as one of its successes, saying it "arranged a complex, five-party agreement" between Delta, the city of Lodi, CADI and property owners to create a "master-planned, mixed use" development.

The company also notes the land was being purchased "well below market value," although Delta College still has not purchased the land.

Contacted at his office Friday, Rodriguez declined to comment on the Victor Road project.

Public and private partnerships

Trustee Ted Simas said he wasn't sure how Delta became linked to CADI. He said he remembered that in 2006, when the college voted to buy the property, the trustees did not know which company would help develop the Lodi site.

Simas said the college's consultant, Rodriguez, would only say "it was a reputable developer from the Sacramento area."

Trustee Marie Elena Serna also said she could not recall how CADI and Delta came together ,but thought it was "some type of bid process."

Delta spokesman Greg Greenwood said he did not know how the college and CADI came to form a partnership.

He also said the board's decision not to proceed with an option on the Victor Road property does not necessarily preclude the college's agreement with CADI.

"The college is analyzing all of the aspects surrounding the proposed Lodi site, as well as exploring the likelihood of alternatives. That said, the agreement is currently in effect," Greenwood said.

Even if the agreement is in effect, it's hard to tell if anything will happen at the Victor site. Delta doesn't appear to have enough money, and San Joaquin County planning staff could not find any development applications submitted by CADI or Victor Ventures.

Part of Delta's agreement with CADI established an escrow account into which funds would be deposited for work on the project site.

Delta has spent millions on planning work, but it's unclear if CADI or Victor Ventures has deposited anything.

Greenwood said the account is processed by a neutral third party and could not say if CADI had made any deposits.

"We recommend you contact representatives of CADI for information as to what they have, or have not, deposited," he said.

CADI did not respond to inquiries from the News-Sentinel.

Trustee Simas said he did not believe CADI had contributed anything for Delta's Lodi project, and characterized the endeavor as "gambling with taxpayer money."

Serna, however, said she still views public and private partnerships as a method to building a Lodi campus.

"There are those that are just negative on public/private partnerships, and I'm not," she said.

She said she still thinks the Victor Road site may work out, but would be willing to consider other options that Delta staff may discover. The trustee is dead set against a "storefront" location, however, because such an arrangement would not allow Delta to expand.

"We'll probably have to get very creative, but that's OK," she said. "These things don't come cheap."

Lodi campus costs

• The following is a breakdown of San Joaquin Delta College's spending on the Victor Road site. Consultant costs are current as of March 31 and dealt mainly with site analysis and planning work.
  
• Property option payments: $450,000.
  
• Private Public Ventures: $758,083.20, planning and site search.
  
• Dennis E. Barnhart Program Services: $165,547.14, planning.
  
• Lozano Smith: $116,440.93, legal review.
  
• Carter & Burgess: $1,009,487.21, land use and master plans.
  
• CCS: $111,038.51, curriculum planning.
  
• City of Lodi: $32,780.02, environmental impact review.
  
• Palmero Reporting: $608.75, notation services for a public meeting.
  
• Design, Community & Environment Inc.: $44,948.35, land use report.
  
• EDAW, Inc.: $260,698.38, land use and environmental impact review.
  
• Unallocated: $148,521.
  
• Total: $3,098,153.49.
  
  
  Source: San Joaquin Delta College
  

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