Escrow closes on FPUD's Santa Margarita property sale

Escrow for the sale of the Fallbrook Public Utility District’s Santa Margarita property closed Dec. 19.

“The ownership of the property is now transferred to the Wildlands Conservancy,” FPUD general manager Jack Bebee said.

The Wildlands Conservancy paid FPUD $10 million for the 1,384-acre property which was at one time planned for a dam along the Santa Margarita River.

“I think it’s a good deal for the community,” Bebee said.

In the late 1940s, the FPUD board pursued the building of a dam on the Santa Margarita River and purchased the 1,384-acre property with the intent to use the land for a dam. Issues involving U.S. Marine Base Camp Pendleton water rights needed to be resolved at higher government levels, and by the time that occurred, environmental and funding issues prevented the dam from being built. The plans for the dam were replaced with the Santa Margarita River Conjunctive Use Project which will enhance groundwater recharge and recovery capacity within the lower Santa Margarita River basin and develop a program to increase available water supplies for Camp Pendleton and FPUD.

The Santa Margarita property includes approximately 18 miles of multi-use trails for hiking, bicycling and horseback riding. FPUD owned the trails but had a maintenance agreement with the Fallbrook Trails Council. The county’s general plan designates the property as Public Agency Lands while the zoning is S80 open space for all but a 3.6-acre parcel which has A70 limited agriculture zoning.

In September 2015, FPUD’s board approved a sale agreement of the 1,384-acre property to Western Rivers Conservancy for $9,975,000. The purchase and sale agreement stipulated an escrow closing date of Dec. 31, 2016, unless Western Rivers Conservancy chose to increase the deposit and extend escrow to June 30, 2017. The expectation was for the land to be placed into a permanent conservation easement, and the purchase and sale agreement stipulated that a recreational trails easement as well as a long-term stewardship agreement would be finalized before the close of escrow. The process would have involved The Wildlands Conservancy undertaking the role of the long-term steward for the entire land with an equestrian easement being granted to the Fallbrook Trails Council. Concurrence in writing by FPUD, Western Rivers Conservancy, The Wildlands Conservancy and the Fallbrook Trails Council would have been necessary for the agreement to be finalized.

The conditions to close escrow were not met, and in June 2017, FPUD’s board voted 3-2 to reject a motion which would have extended the escrow agreement with Western Rivers Conservancy for an additional 90 days. In September 2017, the FPUD board voted 4-1 to issue a request for proposals soliciting interested parties to propose a transaction agreement to acquire the Santa Margarita River property which would include preserving access to the trails on the land. The proposals were due by Jan. 15 and needed the proposed compensation to FPUD, the terms and conditions of the transaction and a detailed summary including ownership structure and principals, management experience and financial capacity to complete the transaction and preserve the property.

The Wildlands Conservancy was the only organization to submit a proposal. The Wildlands Conservancy is based in California and is a nonprofit private entity whose mission is to provide passive recreation and education opportunities which are free to the public. On April 30, the FPUD board voted 4-1 to approve the sale and purchase agreement for the 1,384-acre property along with escrow instructions.

The components of the proposal assumed that the state’s voters would pass Proposition 68 in the June 5 election. Proposition 68 authorized $4 billion of general obligation bonds for state and local park, environmental protection, water infrastructure and flood protection programs. Proposition 68 was approved, and The Wildlands Conservancy was allocated $10 million of Proposition 68 funding for the acquisition of the Santa Margarita property.

The conditions of escrow also included that a trail easement be recorded and that The Wildlands Conservancy will manage the property in accordance with an integrated resource management plan which will preserve the existing 18-mile trail system on the property, maintain year-round access to the property for passive recreational uses and preserve the property from development. The escrow agreement also called for The Wildlands Conservancy to manage the property through an on-site preserve manager and a ranger beginning 90 days after the escrow opening date and continuing until the close of escrow.

“The Trails Council still has an easement over the trails, and Wildlands is looking to have a permanent on-site presence on the property,” Bebee said.

The Wildlands Conservancy had placed a $50,000 non-refundable deposit which will be applied toward the purchase price. Escrow was required to close before April 20, although The Wildlands Conservancy had the option to extend the close of escrow to April 20, 2020, with a written request and providing an additional $200,000 non-refundable deposit within 30 days of that written request.

“There was a lot of effort by a lot of people to get the deal done,” Bebee said.