Board Chairman Anthony Botelho today said he was surprised by
the timing of DMB’s decision to withdraw its El Rancho San Benito
project while he believes a vast decline in housing values prompted
the company to realize it
”
just doesn’t pencil out.
”
When DMB first publicly proposed the project in 2005,
real-estate values were booming. Since that time they have
plummeted, while the area suffers one of the highest foreclosure
rates in the state.
For a timeline of events and story archive on DMB’s pursuit of El Rancho San Benito, go here.
HOLLISTER
Board Chairman Anthony Botelho today said he was surprised by the timing of DMB’s decision to withdraw its El Rancho San Benito project while he believes a vast decline in housing values prompted the company to realize it “just doesn’t pencil out.”
The supervisor who represents the district where DMB had proposed the 6,800-unit planned community said it had “more to do with the state of the housing industry and our overall economy” than issues with government bureaucracy.
When DMB first publicly proposed the project in 2005, real-estate values were booming. Since that time they have plummeted, while the area suffers one of the highest foreclosure rates in the state.
He also noted how DMB had concerns about necessary improvements to Highways 25 and 101 – to accommodate thousands of new residents if the project had been approved – and whether the state has the money to help get them done anytime soon.
“My sense is that to do these highway projects and overpasses, it’s just a phenomenal amount of money,” Botelho said. “The value of the housing has decreased to such a point that they weren’t going to realize the profits they were anticipating before the market crashed. It just doesn’t pencil out.”
He said he was surprised by the timing of the decision, however, because county officials had been in continual talks with DMB over consulting as the project was moving toward a vote.
“Naturally, I was surprised. We just did another amendment to the counsel services. If there was any sort of dialogue that maybe this project wasn’t going to move forward, everybody could have saved time and money.”
DMB is bound, meanwhile, to reimburse the county for all consulting fees such as those for attorneys, environmental review and water quality analysis. In its letter to the county, DMB stressed that it intends to pay back taxpayers for all those consultants, while San Benito County still holds a $150,000 deposit from the company.
Both sides appear intent on maintaining some sort of relationship.
DMB intends to keep its property there. The company owns a 684-acre parcel along the El Rancho San Benito project area’s northeast edge. It also has had an option agreement on the 2,777-acre Rancho Gavilan to the west of the DMB property and it had been pursuing purchase of the 6,850-acre O’Connell Ranch to the west of that. Using those parcels, it had planned to build El Rancho on around 6,000 acres while keeping the rest as open space with potential, at least at one point, for further development.
DMB’s plans for the option agreements and details involved with them are unclear. Regarding those agreements and how they relate to the company’s future plans, Botelho said he is “as curious about that as anybody else.”
“They really weren’t specific,” he said. “They’re pretty tight with their information.”
Added Botelho: “I think they’re going to hold onto the property. Whether it’s that business or somebody else, we will probably do something different down the road in that area. It’s just a matter of the times right now. It just isn’t conducive to a major project.”
