IAG partner explains reasons behind Conway Ranch lawsuit
Even the most patient businessperson can tire of a never-ending money pit, which is why the Inland Aquaculture Group, LLC (IAG) has taken Mono County to court.
“We’ve been in limbo and it has become expensive,” IAG partner John Frederickson very frankly told The Sheet.
Mono County relies heavily on tourism and in the summer, numbers from the County’s Tourism and Economic Development office show that 60 percent of those visiting are coming to the County to fish.
Yet grant restrictions have tied the hands of IAG, the contractor brought in as a partner back in 2006 to turn Conway Ranch into a trophy trout farm for Alpers Trophy Trout in order to enhance the local economy, keeping IAG from pushing forward with its original intent.
IAG started the facility as a pass-through — bringing already-grown fish to its raceways to fatten them up and then sell them off to the County and other customers. The end goal, however, was to turn the Ranch into a fish-rearing facility, a true hatchery where fish would be raised from eggs and fry (fingerlings).
“The pass-through method is not viable long term,” explained Frederickson. Any profit is eaten up in the purchase of more fish.
To grow fish, IAG needed a barn. The barn would protect the eggs and fry from the elements, predators, etc. A portion of the proposed barn would also be used as an interpretive center, as the Conway Ranch is open to the public and used as a place to encourage people to learn to fish. Educational and interpretive programs at the Ranch are operated under the Conway Ranch Foundation, a non-profit.
Several years into its investment, in 2009/10 when IAG was developing the barn concept, it was told to stop. The barn concept, as well as a few other improvements already installed at the Conway Ranch such as a handicap accessible ramp, was said to be in violation of grant restrictions from Caltrans.
Caltrans supplied one of several grants to Mono County more than a decade ago as the County began purchasing land parcels on and around Conway Ranch. The other two granting agencies on the land are California State Parks and the National Fish and Wildlife Foundation (NFWF).
“The grant restrictions are the problem,” Frederickson said. “The County took the grants and either didn’t understand them or didn’t agree.” Either way, Frederickson said that IAG was not made aware of the grant restrictions when it entered the partnership with the County.
And so IAG has been waiting … and putting money into Conway Ranch … and waiting some more while the County and Caltrans tried to come to an agreement over the interpretation of the grant restrictions. In the meantime, IAG has requested some things from the County, such as $11,132.19 to repay the Conway Ranch Foundation for expenses and revenue losses caused by a pipeline installation at Conway Ranch last November. On many occasions, such as that one, the Mono County Board of Supervisors denied payment.
“The government wasn’t giving much back,” Frederickson said. “We’re all family up here but the County has never tried to help.”
This is something that Frederickson doesn’t think is the Board’s fault. “The Supervisors don’t know what’s going on,” he said. “They are relying on staff [to feed them information]. County Counsel is running this.”
The County told IAG that it could pull out of operations at the Conway Ranch at any time, with 30 days notice, Frederickson said.
“We have $1 million invested,” he said. “If you want us to pull out, at least make it right. The County is not willing to do that.”
Which is why, at the end of 2012, even with three new Board members coming to the dais in January 2013 bringing with them the potential for fresh dialogue, IAG began its lawsuit against the County. Paperwork was officially filed in February/March of this year, according to Frederickson.
“We can’t do what we were told we could,” Frederickson said of the reason behind it.
Sheet: Is the situation similar to the Town of Mammoth Lakes/Hot Creek litigation?
Frederickson: Our lawyers keep saying so.
The situation is similar in that a contractor entered an agreement with a government agency to build something; then, due to a third party (in this case, Caltrans, while in the Hot Creek case it was the FAA), was told it could not continue with the plans it had been pursuing.
Luckily for the County, IAG is only asking for $1.6 million to settle, according to Frederickson, a far cry from the original $150 million in damages that Mammoth Lakes Land Acquisition (MLLA, i.e. Hot Creek) originally sought in its 2008 lawsuit against the Town.
However, the situation grows uglier as each day passes. Most recently, the Mono County Fisheries Commission was brought into the fight.
The Commission, according to a staff report at this week’s Mono County Board of Supervisors meeting, was created in 2002, and given the primary responsibility of advising the Board of Supervisors on matters relating to the rearing and stocking of various trout species in Mono County.
“In addition, the MCFC upon request of the Board may assist in oversight of Conway Ranch aquaculture activities; the oversight and planning of the Mono County Fish Management Study; research and consultation with individuals of expertise and communication, as needed with elected officials and agencies at all levels of government,” the report said.
The Board has lately accused commissioners of taking sides with IAG because they were seen sitting on the IAG side of the courtroom during last month’s depositions for the lawsuit.
“We may have the appearance of wanting IAG to succeed at Conway, but we are not taking sides in the lawsuit,” said Commission Chair Steve Marti, who admitted that as a fishing resort operator, Conway Ranch affects him in the pocketbook and he wants to do everything in his power to make it succeed. “We were told by Marshall Rudolph [Mono County Counsel] when the lawsuit was filed that we had to deal with IAG as normal as possible.
“Maybe the Board has taken sides that IAG shouldn’t be the partner out there,” he added.
“It was just as big of a shock to us as it was to you when Caltrans said stop,” argued Supervisor Byng Hunt. “I am so frustrated with the stonewall at Conway Ranch.
“Don’t shake hands with an attorney for IAG and have your picture taken in a parking lot,” Hunt added in reference to a photo allegedly taken of Marti.
“It seems like one partner is suing another partner,” said Supervisor Larry Johnston. “The perception is that some partners have taken sides with other partners. It seems they are aiding and abetting the enemy.”
“No partners should be considered enemies,” Marti said. “The Board needs to define partnerships for a public/private role. My understanding is that the County was the bully in the room. When the County enters into a partnership, it has to be an equal partnership.”
Supervisor Tim Fesko seemed to agree. “It wasn’t the Fisheries Commission’s fault that IAG sued,” he said.
“The Commission’s sole goal is to benefit Mono County fishing,” said Commission member Dan Anthony. “Supervisor Johnston’s comments are a slap in the face.”
Another Commission member, John Webb, said that he was one of the commissioners sitting on the IAG side of the courtroom. “It was the first time I’ve ever been in a courtroom. I didn’t know there was a right and wrong side. If you [the Board] don’t want us to go, you need to put it in the language of the bylaws.”
Supervisor Johnston pointed out that at a recent Commission meeting, one commissioner was on tape as saying he was at the hearing to support IAG. The name of the commissioner was not given.
While all of this goes round and round, the County is no closer to having more fish for its waters. In fact, supply continues to shrink as the California Department of Fish and Wildlife has said it will reduce its stocking levels by 15 percent in the next year.
In terms of solving the grant restriction issues, the County began working on a Memorandum of Understanding (MOU) with Caltrans earlier this year.
The idea proposed was to have the County pay back the Caltrans grant on the 75 acres that would be affected by Conway Ranch improvements for the price of $95,800. The remaining acreage that would remain under the Caltrans grant would then be rolled into a conservation easement that would be administered by the Eastern Sierra Land Trust (ESLT). The restrictions on the land would be the same as they were under the Caltrans grant. The only difference would be that ESLT would be responsible for monitoring that the restrictions were being followed.
Conway Ranch would be left free and clear of the conservation easement to do what it would like unless the two other granting agencies that have stake in the land want their grant restrictions rolled into the conservation easement as well.
In June, a County staff report stated, “The County recently entered into an MOU with Caltrans which, if all conditions of the MOU are satisfied, would ultimately result in certain grant restrictions (EEMP Cycle 7 grant) being removed in a seventy-five (75) acre area of Conway Ranch where fish-rearing and other fishing activities are currently occurring, thereby allowing the County to more fully utilize that area. It is proposed that the County retain Professional Aquaculture Services (Tony Vaught) to assist the County in evaluating and planning for future aquaculture facilities and an interpretive site in that 75-acre area.”
That plan has moved forward and is currently in draft form. What Frederickson found interesting was that the plan calls for much more infrastructure to be installed at Conway Ranch than IAG ever requested. Something, he said, that isn’t a bad thing and he’s not against it, but he fears what the other two granting agencies may have to say about it.
As for the IAG suit, the outcome is far from determined. According to Frederickson, IAG filed the suit on five accounts. The County filed demurs on all five, but Judge Stan Eller denied all five demurs.
“I’m not sure where they’re [the County] going now,” Frederickson. He expected more depositions in the future.
“We would still be willing to be a partner [at Conway Ranch], but the County will probably throw us out,” Frederickson said.
“I got involved in this [Conway Ranch] to keep the Alpers Trophy Trout legacy alive,” Frederickson concluded. “You need to know what your market is and grab it. Embrace what your community has to offer. We have the beauty and the water and we can make the fish. It’s a renewable resource. It’s not going to run out like oil [or be unpredictable like snow].”
