Board settles huge suit over land

San Bernardino County supervisors Tuesday approved a $102-million settlement with a politically connected developer that sued the county for failing to pay for flood-control improvements for its community of new homes and stores in Upland.

The lengthy legal battle had ignited a political firestorm among the supervisors, including allegations of secret negotiations and leaked government memos -- and prompted some supervisors to offer to take lie-detector tests. An investigation by the district attorney’s office found no evidence of wrongdoing.

Under the agreement, the county will immediately pay Colonies Partners $22 million and $80 million from bond issues. If a bond issue is not secured in 180 days, the county will pay Colonies $8 million a year over the next decade at 9% interest, according to county spokesman David Wert.

“I had to think of what makes the most sense for the county and how the county could cut its losses,” said Supervisor Gary Ovitt, who voted in favor of the settlement along with Supervisors Paul Biane and Bill Postmus.

Supervisors Dennis Hansberger and Josie Gonzalez voted against the deal.

“I still do not believe the district owes the developers any money,” Hansberger said. “There’s nothing to support that large a settlement except their request for it.”

In 1997, Colonies Partners bought several hundred acres near the Foothill Freeway in Upland to build about 1,100 homes and a retail center. Colonies executives said that because water runoff from the newly extended 210 Freeway was being drained onto Colonies property, the company was forced to build a flood control system.

In March 2002, the developer sued, saying the county should have paid for flood control improvements and for the land -- owned by Colonies -- needed to divert the runoff.

The developer originally asked for $300 million.

The county argued that it had no responsibility to pay for any land used for flood control because it already had decades-old legal easements that granted the county limited rights to the land. The county also denied that it was responsible for the cost of building the flood control system.

A state appellate court in Riverside ruled that the easements gave the county rights to some but not all of the property that would be required to build a flood control basin.

The court sent the case to San Bernardino County Superior Court Judge Christopher J. Warner, who tentatively ruled in July that the county forfeited rights to the drainage basin through deceits in dealing with the developer, leaving some county supervisors wondering if the county would be liable for the requested $300 million.

On Tuesday, a Colonies spokeswoman said most of the recent debate over the lawsuit focused on property rights, which missed the main reason for the legal action.

“Tragically, what seems to have been forgotten is why there was a dispute in the first place: the need for a permanent flood control facility to protect lives and property,” said Lorraine Le Clear.

After the lawsuit was filed, the dispute triggered a number of nasty political fights among supervisors.

The Riverside Press-Enterprise in June 2005 reported that Biane and board Chairman Postmus negotiated with Colonies without the county’s attorneys present.

Biane, Postmus and Ovitt had accepted thousands of dollars in campaign donations from the developer or its partners. And Biane, a former real estate agent, worked on at least one business deal with Colonies partner Dan Richards.

An internal county memo leaked to local news media detailed a proposed $77-million settlement that Biane and Postmus reached with the developer but was never approved by the board.

Biane denied he leaked the memo and offered to take a lie-detector test. Other board members -- including Hansberger, whom Biane blamed for the leak -- offered to do the same.

In a July statement, the district attorney’s public-integrity unit said polygraph tests would be inadmissible in court and that prosecutors could not determine the source of the leak.

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jonathan.abrams@latimes.com