April 2019

Orange appears unaware of details that could cloud developer’s aspirations for Sully-Miller site

By Tina Richards

The owner of the Sully-Miller property is basing elements of its plan to build 128 tract homes or, failing that, throttle up sand and gravel operations, on assumptions held by the City of Orange that are contradicted by documents obtained from the city itself.

Milan Capital is embracing an opinion written in 2003 by then-City Attorney Dave DeBerry, that surface mining ceased on the site prior to 1975. The date is important because in 1976, the state passed the Surface Mining and Reclamation Act (SMARA) that required mine operators to have a plan to rehabilitate land altered by mining activities once those operations stopped. Governing agencies (the city) were required to ensure that a plan was created to restore the land for “alternate use.”  Mines that closed prior to 1976 were exempt.

A SMARA plan was never developed, and the city never forced the issue on mine operators Sully-Miller or Hansen Aggregates.  During the late 90s, early 2000s, Orange and the State Office of Mine Reclamation (OMR) went back and forth as to the city’s responsibility, and whether or not sand and gravel excavation occurred after 1976.  

Picture perfect
The issue came to a head in 2002 as the Fieldstone Company was seeking approvals to build houses on the site.  Hansen Aggregates, which took over operations in 1997, came up with aerial photos indicating mining had stopped before 1975, and, in 2003, the OMR backed off. Dave DeBerry jumped on it.  That “proof” protected the city from liability, and promised to save any future developer from spending millions to reclaim the land to meet state standards.

City documents, however, show surface mining hadn’t stopped in 1975. It is not clear from available records when the mine was truly retired, but it was somewhere between 1982 and 1996. A 1992 letter from the city to OMR states that there had been no active or idle mining for “approximately ten years.” 

During a city council hearing, an environmental manager for Hansen Aggregates said that both excavation and processing of sand and gravel “took place between 1975 and 1985.”  He later reversed himself, and said operations ceased in 1973.  A Hansen attorney, also speaking at a public hearing, said “mining operations ceased in 1985, and the city hadn’t made a peep for 17 years [referring to SMARA].” The Draft Environmental Impact Reports for the failed Fieldstone and Rio Santiago developments both reported mining had occurred until 1995.

Minding the mine
Sand and gravel mining began on the property around 1919. Santiago Creek had created rich deposits of aggregates needed by the construction industry, and considered by the state to be a valuable resource.  In the 60s and 70s, sand and gravel mined from the Sully-Miller site were trucked to an asphalt batch plant, located roughly at the intersection of Santiago Canyon Road and Hewes.  

In 1971, Sully-Miller asked the city for a Conditional Use Permit (CUP) to move the batch plant to the mining site.  At that time, the company reported “remaining aggregate deposits are 7.5 to 8 million tons, sufficient to continue plant operations for 15 years without bringing material from other areas.” The plant was not built.

Sully-Miller came back in 1975 with the same request. It would be more convenient to process the aggregates on the site, rather than truck them down the road. While planning staff was concerned about the noise generated there by “gravel extraction and processing,” the city granted CUP #704, good for 15 years, with “the life of the extraction and processing operation reviewed every five years.”  It is unlikely that Sully-Miller would have built a batch plant to process aggregates on-site after 1975 if extraction had stopped in 1973.

Illegal, but ongoing
The batch plant CUP expired in 1990. By then, the site was used primarily for rock crushing and concrete recycling.  In February 2002, city staff concluded that the concrete recycling operation was illegal because it involved processing materials not extracted from the site. A code enforcement officer determined that illegal dumping of green waste was occurring. The city planning commission voted to shut down the operation, but that decision was reversed by the city council.

Milan Capital purchased the acreage in 2007. In anticipation of its Rio Santiago development, it hired a subcontractor to level out the property.  A grading permit was issued in 2011, as was a license to infill the property with inert material. In a statement to the Foothills Sentry, Attorney DeBerry said the backfill operation could continue until it brings the site to its natural grade, with Santiago Canyon Road being the landmark for the natural grade. The backfilling could not raise the site above the road. That permit/license was reissued in 2012, but expired in 2014.

Although the city was supposed to monitor the backfilling activity, it apparently did not. “The huge deposits of silt dumped throughout the site in massive ponds,” noted in a 1992 report, have now been replaced with (or buried under) multi-story mounds of dirt. Milan relied on the city’s no-SMARA edict in its second Draft Environmental Impact Report, but the property still requires reclamation. Specifically, who will do it, how it will be done, and whether it must comply with SMARA has yet to be addressed. 

Pile it on
Residents in Mabury Ranch and The Reserve report that a Milan consultant is telling them that if the community doesn’t support its project, it will continue to dump construction waste there, or resume crushing and concrete recycling, or – worse - build another batch plant.

A batch plant would require another CUP to replace the one that expired 30 years ago. The 1975 CUP was for materials already on site, not for anything brought in.  

Milan has already exceeded the limitations of the expired grading permit and infill license. It has not provided fencing or landscaping to mask site activity, and the “inert material” infill far exceeds the height of Santiago Canyon Road. Neighbors privy to the current operation report that the “inert” material includes asphalt, concrete and other debris. But no one knows for sure, because no one is monitoring it.

Covered by code?
Milan claims that any dumping or recycling that it would conduct on the site is covered by the city’s sand and gravel ordinance. Under the code, mining or storage of natural resources and infill with inert material are permitted. Those activities, however, must be conducted in compliance with dust, air pollution and noise controls, proper screening (fencing, berms, landscaping), “in a manner that is most beneficial to the citizens of the city.”

It is also the intent of these regulations, the code states, “to provide assurance that as soon as it is feasible, the property will be suitable for a useful purpose.” 

Milan’s threatened fallback position may have merit, as long as the city agrees to ignore current conditions and past performance.