Day 39 of Placer County/Royal Gorge LLC Public Records Watch

GREAT EXPECTATIONS ON DONNER SUMMIT

There are some who might feel that any attempts by Donner Summit/Serene Lakes residents to influence development plans and protect the environment against egregious over- development are exercises in futility.  How can environmental groups and interested citizens ever stand up to all the capital Royal Gorge LLC has directed at furthering their plans for developing up to 1000 units on Donner Summit?  Others may have fallen prey to the theory that anyone who buys land has an unfettered right to do whatever they darn well please with that land, even if that means building quarries, cement production facilities, dumps, rendering factories, ridge top restaurants- you get the picture.

There are some pro-business types that insist that once a developer like Royal Gorge LLC purchases a chunk of land, they magically acquire a right to a "reasonable expectation backed return on investment" (no, I didn't make this silly-pro developer term up), which the government must bend over backwards to protect. Basically, the larger the swath of land the developer has amassed (and the more they've spent), the more their investment expectations are to be protected- no matter if the land wasn't zoned for the developer's intended use in the first place, and no matter if their intended use will grossly overburden a fragile ecosystem. And who cares if there's scanty water, a river already swilling in treated sewage effluent, and a small, single family community that will be swallowed by condos, hotels, commercial enterprises, and fields of parking lots? Doesn't a big money developer like Royal Gorge LLC deserve to recoup their expenditures, and also make a killing in the bargain? 

Well, actually no- a very resounding no!  Developers don't merit special economic protection, and especially not if their investment was unreasonable in the first place. Marilyn Jasper, Chair of the Placer Group, Motherlode Chapter of the Sierra Club, in her very cogent December Message on her groups' website, makes an excellent point. She reminds us that there is no such thing as "FLSIC-  Federal Land Speculation Insurance Corporation." Those who speculate in the stock market are not bailed out when they make bad choices. Land speculators, aka developers, should likewise not expect to be rescued from their bad economic decisions, and counties should never make land-use decisions designed to bail out developers' misguided, and sometimes greedy expectations.

Royal Gorge LLC spent something in the neighborhood of $34 million dollars to purchase their Donner Summit land holdings and the ongoing business of Royal Gorge Cross Country skiing. (This information is public record.) Most of the land purchases were made from Rancho Monterey, and the cross country/lodge business was purchased from a group of various fictitious entities. Working backwards, (and from tax records) the actual land value of the purchases was in the vicinity of $13 million dollars. The business value (or at least purchase price) of Royal Gorge/Rainbow Lodge was around $21 million. Note a few things here. The land is not depreciable, but money types tell me the business is. Second, the business viability has been, shall we say, "belittled" by Mike Livak, Royal Gorge LLC's project director.  In two separate news articles he indicated that Royal Gorge Cross Country was basically a money-pit from the get-go. 

Are we starting to see that the purchase of Royal Gorge Cross Country's business might have been just a tad speculative? Wasn't it risky to purchase something that due diligence most likely showed wasn't very profitable, in hopes of being able to get zoning changes and transform it from a  well loved, low key cross country resort into a major second home and timeshare development? Now, as to a land value of $13 million dollars- a very short walk on any street in the existing Serene Lakes Community will quickly show you $13 million dollars worth of real estate. Add in all the existing infrastructure- roads, sewers, water pipes, other utilities, and then, more importantly, add in all the intangibles, like "sense of place", and "unique community", and you'll quickly find existing homeowners have a much larger economic stake in the surrounding community than a would-be developer who's slapped down $34 million or so on what is essentially a gamble.

Then go beyond the "intangibles", and look at how fragile the environment of Donner Summit is. By all accounts, the present Summit development is probably straining the carrying capacity of the land.  Add in as yet unbuilt houses on the already platted and permitted lots, and we may come to the conclusion that the community is at a "tipping point" in sustainability. And don't even think about how our already substandard single egress will be impacted, perhaps fatally in the event of a fire, by the addition of 1000 new units--and, don't worry, Royal Gorge LLC isn't losing sleep over that either- their representative recently callously told a TV reporter that the existing roadways were "sufficient." 

So what gives developers who rolled up from the San Francisco Bay Area, (where they develop suburban housing tracts and commercial space), the ironclad guarantee that once they've plunked down $34 million, their financial expectations will outweigh present residents' expectations that Serene Lakes and Donner Summit won't be ruined forever by resort development? When will environmental issues get placed on the scale in such a way that they are accorded real weight in making land-use decisions- in such a way that developers can't purchase mitigations like so many pardons purchased by penitents in the middle ages?  The right to develop any particular piece of land as one sees fit is not chiseled into the hard granite of the Sierra. It is unreasonable for a developer to purchase land that is not zoned for condominiums, as did Royal Gorge LLC, and then to expect Placer County to rush to change the zoning to allow hotels and 1000 units, in order to ensure their maximum economic return--- no matter the cost to the environment and the existing community. 

So, is it futile to fight big money interests like Royal Gorge LLC and their pro-development friends, and to question an irrational but increasingly entrenched notion that developers who speculatively purchase land, ergo have an unbridled right to develop that land? Or is working to protect Donner Summit and the Sierra the truly reasonable thing to do?  John Muir would have expected no less-- and those are Great Expectations we should strive to live up to.