San Juan Capistrano to Sell Home Bought From Its City Manager : House: San Juan Capistrano is preparing for sale of the property, which has been rented out.
SAN JUAN CAPISTRANO — Wanted: Buyer for four-bedroom, hillside home. Upscale. View. Quiet. See owners at City Hall.
Three years after spending $280,000 to buy a residence “for future municipal housing,” the city of San Juan Capistrano is trying to get out of the real-estate market by selling the home at 28121 Calle San Remo, about a mile south of Ortega Highway.
For the record:
12:00 a.m. March 1, 1992 For the Record
Los Angeles Times Sunday March 1, 1992 Home Edition Part A Page 3 Column 4 Metro Desk 5 inches; 162 words Type of Material: Correction
Stephen B. Julian, city manager of San Juan Capistrano, filed a lawsuit last month against The Times and several of its employees for libel. The lawsuit claims, in part, that the articles and editorials published during January and February, 1991, accused Julian of illegal and corrupt conduct in his financial dealings with the city of San Juan Capistrano.
The Times wishes to make clear that the articles did not state and were not intended to imply that Julian is a corrupt public official. Additionally, the articles did not state, nor were they intended to imply, that Julian participated in any illegal activity or that any of the terms and conditions of his employment were illegal.
As The Times reported on March 9, 1991, the Orange County district attorney’s office declined to investigate Julian’s dealings with San Juan Capistrano, stating that it had no evidence suggesting that any crime had been committed.
Julian contends that the articles harmed him and caused him and members of his family to be the subject of harassment. The Times does not condone or encourage any harassment of Julian or his family and regrets any harm that may have occurred.
“I just think we need to quit messing around and sell it,” said David P. Bentz, city finance director. “We can use the money for other purposes in the city. There’s no need for us to be in the rental market.”
After buying the residence from City Manager Stephen B. Julian in the spring of 1988, the city at first hired a property management firm to rent and care for it. Now, Bentz and his staff are responsible for collecting the rent and responding to maintenance problems.
And Bentz said that on Dec. 17 the city sent a notice to its tenants--who do not work for the city--asking them to leave by mid-January so the house can be prepared for sale.
Bentz said he is unsure what price the city will seek in this period of real-estate recession--an appraiser valued the house at $280,000 three years ago--but he said the tenants would be given a chance to buy it.
The city helped Julian purchase the house in mid-1981.
Julian’s predecessor as city manager in San Juan Capistrano, James S. Mocalis, briefed City Council members on the impending housing arrangement, listing three options but recommending that the city lease a house to Julian.
“In this way, the city could reasonably expect to make an appropriate return on the capital investment, and at the same time, would retain greater control over its investment,” Mocalis wrote.
Instead, the council loaned Julian $250,000 to buy the house at a yearly interest rate tied to the return earned on other municipal investments.
Julian told a Times reporter in 1981 that he hoped to obtain conventional financing for the home and repay the city within five years, but he has yet to fully repay the money.
He wound up selling the property to the city in 1988 in exchange for reducing his loan debt.
That effectively put the city in the residential real-estate business. When the council decided to buy the house from Julian, it did so with the intention of using the residence “for future municipal housing,” according to records. Yet since Julian moved out, no city employees have lived in the house, according to Bentz.
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