The DWP told the family it was prepared to pay $50 million, Nahai said. But city officials also notified the trust that they might file an eminent domain lawsuit to get the property through a court-ordered sale -- a fact that disturbed Oscar Rudnick.
"If anybody's wearing a black hat, it's the DWP," he said. "How would you like it if somebody threatened to condemn your land?"
Agree to sell
Weeks later, the Rudnicks rejected the idea of a lease with Padoma and agreed to sell to the Swiller-CIM partnership.
In February 2008, Rudnick family members voted 60% to 40% to sell to the Swiller group. The price was $48 million.
Swiller's lawyer said that was the same month her client "learned that DWP had an interest in purchasing or otherwise gaining site control of the property."
Three of Oscar Rudnick's uncles, led by Philip Rudnick, 77, challenged the sale in court, saying other family members had failed to take the best deal for the trust's beneficiaries. In a declaration filed in court, Philip Rudnick accused Oscar Rudnick of improperly allowing Swiller into the family's negotiations with Padoma.
The elder Rudnick also said in his declaration that during a lunch break at the meeting in Century City -- while Padoma executives were not present -- Swiller had urged the family to abandon its plans with Padoma.
Oscar Rudnick disputed that version of events, saying his uncle wanted to preserve a deal with Padoma because he had an additional piece of property that he planned to develop with that firm. Swiller, for his part, "did not urge family members in one direction or another as it related to Padoma Wind Power's request," his lawyer said.
A judge upheld the sale of Onyx Ranch in May 2008 and said that Philip Rudnick had not filed his lawsuit "in good faith." The losing side filed an appeal.
On May 15, 2008 -- two weeks after Kern County Superior Court Judge Robert S. Tafoya issued the ruling, but before the deal had actually closed -- Swiller's business partner, D. Cole Frates, approached the DWP, Nahai said, and asked if the agency would be interested in paying $65 million for the 30,000-acre southern half of the property.
In a recent interview, Nahai characterized the figure as "not even within the realm of possibility." Nahai said he told Frates that there was no point in negotiating with a company over land that it did not yet own -- and was still embroiled in a lawsuit.
"We'd already made our position clear as to what we'd be willing to pay," Nahai said.
Weeks later, Swiller met personally with a high-level DWP executive about the property on Onyx Ranch.
Paulin said Swiller also continued to talk with Padoma, which was trying to resurrect its proposed wind lease. The company spoke to Swiller from April to October 2008 about jointly developing a wind farm on the Onyx Ranch property, Paulin said.
Paulin said that during that period, he had no idea Swiller's venture was also trying to sell the land to Vernon, a city with more than 1,000 mostly manufacturing business and a municipal utility that has developed and sold energy assets over the past decade.
The Vernon City Council voted in August 2008 to pay $42 million for 30,000 Onyx Ranch acres -- with an option to buy additional acres nearby.
Swiller's lawyer said ReNu had been contacted by Vernon about "alternative energy opportunities." A CIM Group spokeswoman said in a statement to The Times that Vernon was "the most aggressive bidder among several entities that expressed interest in the Kern County land."
Vernon City Atty. Jeffrey Harrison said his city did not seek out ReNu to purchase the land: "I guess it would be best to characterize it as, they found us."
Paulin said the transaction showed that the Rudnicks could have negotiated better. ReNu, the Swiller-led buyer of Onyx Ranch, "sold part of the property to Vernon for almost as much as they paid for the whole thing," he said. "The beneficiaries threw away a lot of money on this deal."
The Swiller-CIM partnership closed escrow on Onyx Ranch in October 2008 and within days sold the portion to Vernon. But it held on to something that one official described as highly valuable: the ability to pump water out of the Oynx Ranch ground and sell it. Lorelei Oviatt, division chief of the Kern County Planning Department, said those rights are "a priceless commodity right now."
In December, DWP officials notified Vernon that it may now be the target of its eminent domain lawsuit.
Nahai said his agency won't buy the land "if the price and terms aren't right."