City of Norco SilverLakes Equestrian and Sports Complex

The original Federal District Court Quit Claim Deed Covenant Restriction issued on June 13, 2002, has never been legally modified, amended, or rescinded. Norco recognized that they were restricted from building this commercial venture and filed a motion in Federal Court for interpretation, modification and/or elimination of the restrictive covenant. The motion was unequivocally denied on November 2, 2004, in the following: …The receiver in this action sold the property at issue on the condition that the deed contain a covenant running with the land restricting the use of the property to park in open space purposes, which was intended for the benefit of the public. The covenant clearly precludes the mixed use project proposed by the City of Norco. Thus, the Court will not construe the covenant as permitting the mixed-use project. Given that the beneficiaries of the covenant include members of the public, the Court will not eliminate the covenant. [sic]

The SilverLakes Equestrian and Sports Complex is not a public park as presented in the 2002 Quit Claim Deed including the Covenant Restriction. The concept plans submitted in 2012 to Riverside County Superior Court for validation gave the impression that there would be limited 5 commercial or money making activities at this property. However, the plans were substantially different from what was actually constructed. The extent of commercial development in the plans submitted to Riverside Superior Court was minimized. For example, the exhibit plans had no reference to constructing a full service commercial restaurant and bar.

After reviewing official correspondence, sworn testimony and memos, the Grand Jury discovered that pursuant to the Council’s prior authorization, approximately $1.8 million had been provided to the Developer for water and sewer improvements. However, no loan documentation or legal contracts to support this transfer of funds have been found or provided to the Grand Jury despite subpoenaed requests. The money for the loan was drawn from an existing $39 million Enterprise Revenue Refunding Bond. Although the Bond was not designated for this specific instance, there is a clause in its description which allows Norco to finance up to $6 million for improvements to the City’s Water and Sewer Systems.