$67M Developer Suit Against County Heads to Trial

Jury selection is slated to get under way Monday in a civil trial to determine whether a Temecula real estate concern is owed millions of dollars from Riverside County for alleged breach of contract connected to an abandoned commercial development.

French Valley Business Center LLC filed a $67 million lawsuit over the county's alleged decision in 2009 to back out of a project that involved erecting a new 140,000-square-foot office complex for the district attorney's and public defender's offices.

The case will be tried in Orange County. Potential jurors are due Monday morning in the Santa Ana courtroom of Superior Court Judge Derek Hunt to be screened as to their qualifications and availability.

Attorneys representing Riverside County 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.

According to French Valley Business Center attorney Fletcher Paddison, the plaintiffs sent more than 20 emails and letters to the county seeking settlement negotiations, but got no response.

Bruce Keeton, managing partner of FVBC, 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.

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.

In a court brief, the county argues that it is immune from liability because the agreement with FVBC was illegitimate as a result of not being awarded through a formal bidding process.

The county's attorneys -- from the law firm Freedland, McKinley & McKinley in San Diego -- also insist that because the plaintiffs failed to go through an administrative appeals process, as provided under state law, they voided their own claim.

FVBC, 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 Board of Supervisors 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 FVBC 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 February 2010.