The cooperation we are getting from the County, the cities we work in, and the utility companies is unprecedented in the 43 years we’ve been in business. We have prided ourselves as a company on being a high quality developer, being environmentally sensitive and being responsible to the needs of the community. As a result, the municipalities appreciate our approach and we have created tremendous relationships in the communities we buy, manage, develop and sell property.
It seems like in the last year everyone is bending over backwards to help us accomplish our goals in regards to the properties we own. In our opinion, it’s a result of the following: Since everything has been so depressed for the last six years, the various cities, counties and utility companies are anxious to see development occur again. Add to that the fact that Rancon has a great reputation and the results are exciting. Positive situations that are occurring between us and the various agencies are tremendously increasing the value of our partnership’s properties.
Some of these major events are as follows:
A. The County of Riverside is working on a program to generate $40 million to solve the area drainage problems in the Menifee Romoland area. Once this project is complete, it will open up 13 square miles of land for development that, according to an economic report, will generate billions of dollars of increased property values. As a company, we have seven projects that are located specifically in the area that benefits from these improvements. The solution to this drainage problem will result in a tremendous shot in the arm for property values in that area.
B. The Eastern Municipal Water District and the County of Riverside have teamed up to finance a $26 million sewer program that will bring sewer to the major part of the Temecula Valley Wine Country. This includes sewer to serve our own Europa Village and Europa Vineyard Estates. This has eliminated the virtual moratorium on new wineries and, in our opinion, the result will be an exploding wave of winery development in the Temecula Valley Wine Country. We believe that you will see the number of wineries increased by 50% over the next three to five years merely as a result of the sewer installation. This not only has a tremendous positive impact on our Europa Village, LLC and Europa Vineyard Estates, LLC projects, but will be a major economic benefit to all the cities within Riverside County as well as the County itself.
C. The Transportation Uniform Mitigation Fee (TUMF) and the Road and Bridges Benefit District fee are being credited to all the properties in the Winchester Valley. Our own Jeff Comerchero, the President of the Rancon Group, has worked very diligently over the last 18 months with the County of Riverside and the Western Regional Council of Governments (WRCOG) to secure a fee credit for the $16 million the Winchester Ranch property owners put up improving Domenigoni Parkway and the $24 million it will take to build the bridges needed in the Winchester Valley. This is a huge benefit to every one of our Winchester Valley partnerships and gives each of our partnerships approximately a $7,200 credit per dwelling unit. Let’s look at Winchester Valley 200 as an example.
WV 200 has 206 lots. That is a savings of approximately $1,480,000. Considering we only paid $3 million for the property when we acquired it, you can see why were so excited about this credit.
D. Our management team at Rancon approached the key executives of the Eastern Municipal Water District and asked them to help us install water and sewer in the Winchester Valley. We provided a complete business plan as well as engineering drawings and agreed to put up $3 million to build sewer and water lines that would bring water to a specific property that one of our partnerships owns in Winchester Valley. The Water District felt it was to their benefit to upsize those new lines and build the entire sewer and water system needed to service all the properties in the Winchester Valley. They informed us that if we would put up that initial $3 million, they would put up the additional $13 million to accomplish that task. Once building permits are pulled by the homebuilders who buy our properties, those builders will pay water and sewer hookup fees that will reimburse the Water District. We wholeheartedly supported that decision and as a team we are moving forward to bring water and sewer to the entire Winchester Valley.
Our timing in converting all of our efforts to managing our existing partnerships could not have been better, particularly when you see the cooperation we have been receiving from the cities, the County and the utility companies with which we are dealing. As the old expression goes "make hay while the sun shines." The sun has finally come out and now is the time to do just that in regards to getting our properties in position to sell over the next several years. So that is exactly what we are doing!