Jackrabbits, Ghost Grids and LandBanking+ | Link TV
Jackrabbits, Ghost Grids and LandBanking+
The Mojave Project is an experimental transmedia documentary and curatorial project led by Kim Stringfellow exploring the physical, geological and cultural landscape of the Mojave Desert. The Mojave Project reconsiders and establishes multiple ways in which to interpret this unique and complex landscape, through association and connection of seemingly unrelated sites, themes, and subjects thus creating a speculative and immersive experience for our audience.
Around the time that W. Storrs Lee’s book, “The Great California Deserts,” appeared on store bookshelves in 1963, the American frontier appeared to be finally closing. That is, for those desolate federally-held lands of the Mojave Desert and other undervalued areas across the country that Uncle Sam had been giving away — or being “disposed of ” — according to the official objectives of this “baby” homestead act that had become extraordinarily popular during the previous decade.
Lee opens the chapter with the detailed description below of a sardonic professional auctioneer at work in a packed Los Angeles auditorium prodding anxious bidders to slap down $500 or more for a measly patch of desert — complete with no water, electricity, mineral rights or even shade — let alone a parcel that they had actually seen in person. The event had taken place on March 18, 1957, after the Bureau of Land Management (BLM) had decided to dispose of thousands of acres of unwanted public land assets via auction instead of the original requirement calling for the construction of a small habitable “jackrabbit” homestead that allowed the leasee to eventually acquire the tract outright — few strings attached. These “land grab” auctions would continue over several years until public interest had petered out and the local governing officials balked at overseeing the county infrastructure that had resulted from them.
Lee stated that land purchased through these pop-up auctions was often sold for as much as 500 percent of its actual appraised value.
The parcels being auctioned resulted from the Small Tract Act of 1938, a federal government program that had been established that year to authorize the lease of up to five acres of public land for recreational purpose or use as a home, cabin, camp, health, convalescent, or business site to “able-bodied” U.S. citizens. When the applicant made the necessary improvements to his or her claim by constructing a small dwelling within three to five years of the lease, the applicant could file for a patent — the federal government’s form of a deed — after purchasing the parcel for the appraised price (on average $10 to $20 an acre) at the regional land office. This highly popular mid-century homestead movement reflects the quintessential American desire to claim territory and own a piece of the land even if the property in question is virtually “worthless” from an economic and governmental perspective.
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This “strange land grab” as the Los Angeles Times referred to it was the subject of my second book, “Jackrabbit Homestead: Tracing the Small Tract Act in the Southern California Landscape, 1938 – 2008” and was one of the reasons I had decided to move out to Joshua Tree less than two years after the book was published. Yet I did not purchase one of the many claim shacks dotting the more remote areas of the Morongo Basin where this movement was most popular. Instead, I chose a modest 1986 ranch-styled three-bedroom home with truly spectacular views on 2.5 acres south of State Highway 62 in the town of Joshua Tree proper.
Between 1938 and 1977 — between the time when the Small Tract Act had begun and effectively ended — Uncle Sam issued a total of 59,481 patents for 232,473 acres of publicly-held land across the U.S. but primarily within the western states.[i] The General Land Office received 141,536 lease applications during this same period suggesting that nearly two-thirds of people applying had not “proved up” their leases. In California alone, 27,880 patents had been issued alone for 124,487 acres of public land — primarily within San Bernardino County’s portion of the Mojave Desert — considered to be the epicenter of this public land to private ownership land transfer giveaway. [ii] In all, the Feds received a total of $19,271,336 for its “disposal” of our collectively-owned public lands.[iii]
Undeniably these contemporary homesteaders differed from the earlier homesteading pioneers as they were seeking land primarily for recreational use and also to escape hectic city life during their weekend desert excursions. Those laying claim to small tracts located throughout the Mojave Desert arrived from the Los Angeles metropolitan area seeking solitude, repose and isolation from traffic jams and other distractions of modern urban life. The trend attracted mostly working-class folks but people of all walks of life and economic backgrounds participated. The act allowed many who had only previously rented properties to actually afford real estate. Requirements for the five-acre homesteads did not necessitate that they live off the land as the original homestead laws required freeing many to “prove up” their lease on a casual, leisurely basis during weekend visits.
Even Frank Sinatra got into the game. Public General Land Office (GLO) records show that Sinatra received his patent for a 2.5-acre parcel located in southwest Las Vegas on July 24, 1959. The land has changed hands many times over but has remained undeveloped. The last time the property sold in 2001 it went for $150,000. Ronald Reagan, on the other hand, filed for a small tract near Twentynine Palms but never proved up on his lease as no GLO record for the former president exists.
While some of these “measly” patches of desert are today worth a very pretty penny, others, located in less desirable parts of the Mojave Desert, haven’t appreciated in value much at all. Plus, there’s a downside to this public land giveaway in that it has contributed to countless derelict structures, desert sprawl, piecemeal development and checkerboard public/private ownership making rights of way confusing and other property disputes difficult to unravel. San Bernardino County’s Land Use Services Building and Safety Division recently had to decide officially how to deal with the legacy of these “recreational cabins” regarding code enforcement, structural improvements and classification.
Indeed, many of the Small Tract parcels that became patented in the Morongo Basin were previously purchased and upgraded by adventuresome artists including Andrea Zittel during the early 2000s. The trend continues full steam today. My 2009 book features several of these creatives including Stephanie Smith, proprietress of a highly popular homesteader cabin vacation rental — a lovely green weathered shack in North Joshua Tree that receives 100,000 hits monthly on the Airbnb website.[iv] According to data from AirDNA there were 2,157 active vacation rentals in the greater Morongo Basin which includes Joshua Tree, Landers, Morongo Valley, Twentynine Palms, Yucca Valley and Wonder Valley during the fourth quarter of 2019.[v]
Of course, many of these Instagramable vacation rentals and must-have Cabin Porn hideouts are central to the hipster tourist’s “high desert experience” and are the subject of numerous high-profile newspaper and magazine features in the New York Times, Los Angeles Times, Sunset and Dwell magazines among others. As of late, with COVID-19 forcing those with the financial means to reevaluate their quarantine living quarters, some are opting to purchase ridiculously priced jackrabbit cabin properties. For instance, a tiny 221 square-foot pink cinderblock jackrabbit homestead on five acres, originally built in 1953, in the very desirable Joshua Tree Highlands near the entrance of the national park was listed in July 2020 for $350,000 and under contract — an extreme example of how some of these Small Tract cabins have appreciated over time.
California City’s Big Lie
California City was the postwar pipe dream of Czech-born, Nathan K. Mendelsohn, a Columbia University educated sociologist and professor with an interest in rural community development. After a stint with the federal government researching farm economies, Mendelsohn, known at Nat, moved to California when World War II had ended and began dabbling in suburban real estate development. After several successful years in the Golden State, he ended up working with developer M. Penn Phillips of Salton City fame to develop the town of Hesperia in the Victor Valley area, north of San Bernardino.
By 1958, Mendelsohn, along with his partners, had purchased their very own piece of desert for $6 million — 82,000 acres to be exact, located about 100 miles north of Los Angeles in southwestern Kern County. This northwestern Mojave Desert parcel would be christened California City — a master-planned community where baby booming greater Los Angeles could spread her wings and blossom—due to an “inexhaustible” million acre-feet of water per year that Mendelsohn’s hired civil engineer Olindo R. Angelillo had discovered. “Sufficient to serve a city of some 50,000 residents,” declared California City Development Company’s marketing literature. But these outlandish claims would be negated the following year by the U.S. Geological Survey and others. Still, the public wanted to believe.
The South Pasadena architecture firm of Smith & Williams was hired to create the overall visual concept for this master-planned community that emphasized a modern, social-oriented design. Mendelsohn ambitiously proposed seven “satellite cities” with 30,000 people in each area plus a centralized city of 85,000 people[vi] that would soon eclipse Los Angeles’ monumental sprawl in size and population. Indeed, when California City was incorporated in 1965, it was noted to be the third largest city in California — in terms of its sheer physical footprint covering 203.63 square miles and remains so to this day.
Paved roadways along with water, sewer and electrical lines crisscrossing the great desert expanse were touted in marketing materials as were schools, recreation facilities and other basic services along with a thriving retail and manufacturing business district, a civic center, an international airport and other urban amenities. The eighty-acre Wonderland Park (later renamed Central Park) centered in the main western section of the development was slated to be a central gem of his master plan featuring a cascading waterfall, a par-three golf course, an outdoor swimming pool, playing fields, tennis courts and other recreational perks, tucked around a twenty-acre man-made lake. Distinctive geometric “parasol” architectural flourishes were showcased at the lake’s floating public pavilion. This mid-century futuristic design was repeated in other buildings including the California City Congregational Church and the city’s airport.
Galileo Park, located fifteen miles east of Central Park on a desert rise, was smaller and western-themed with equestrian rodeo grounds and outdoor recreational areas. A museum commemorating the region’s pioneer history was in the planning and an observation tower was built where Mendelsohn was said to daydream his nascent city’s future as he looked out upon the endless maze of newly graded roads in the open desert.
To celebrate Southern California’s car culture, streets were named Cadillac Boulevard, Chrysler Drive, Dodge Court, Chevy Drive and Buick Boulevard. Others were named after renowned universities including Columbia, Rutgers, Stanford and Yale. There’s even one labeled Rommel — after Nazi Germany’s Desert Fox. To attract manufacturing businesses Mendelsohn offered undeveloped land for one dollar an acre if they set up shop and employed local residents.[vii] When the selling frenzy began in 1958, a family could purchase a lot with a newly-constructed three-bedroom house for under $10,000. Empty lots went for as little as $990 with $90 down and $17.50 a month over a five-year period. [viii]
Although thousands of parcels were sold, by 1962 only 175 homes had actually been built. In 1969, the population had reached a whoopingly-unimpressive 1,700 residents with 350 completed single-family residences.[ix] Parcels were sold mostly to Southern Californians but also to far-flung buyers from Germany, Philippines and other countries through bait and switch and other highly questionable hard-sell marketing practices. Some buyers bought in after signing up for a “free” Southern California vacation that would end with a high-pressure sales pitch. Others had purchased land, often sight unseen, persuaded by strategically placed magazine and newspaper advertisements. As of January 1969, Mendelsohn and his associates had pulled in $122 million from the 32,000 parcels they had sold to date.[x]
Mendelsohn’s success lay in the brilliant cottage industry he masterminded to lure thousands of wannabe real estate speculators into his company’s web by operating a worldwide real estate “training program.” Participants were encouraged to invest in land themselves to ensure seller leverage — what better way than to hawk a worthless piece of desert than to show the “up” (an insider term for a buyer) that they, too, had a stake in upcoming California City? The ploy worked remarkably well enabling one of the most egregious pyramid-like real estate schemes the West had ever seen — a scam that would last, albeit transformed, for sixty years.
By 1969, Mendelsohn, who never actually lived in California City, pulled out, selling his company to Great Western United Corp., a Denver-based sugar and mining company for $27.4 million in stock.[xi] As a major stockholder, Mendelsohn continued his influence through Great Western United’s land development subsidiary — Great Western Cities, Inc. but would focus on their development ventures in Colorado and New Mexico until he finally left the firm in 1970 on unfriendly terms.
By then, Great Western Cities, Inc. was in hot water with several state agencies and the Federal Trade Commission (FTC) after investors complained that their nest eggs weren’t appreciating as Mendelsohn had promised. Plus, only a small portion of the area developed had the services, utilities and paved roads that had been hyped in marketing materials and sales pitches. It didn’t help either that Ralph Nader’s Raiders had exposed the deceit in their scathing 1971 Politics of Land. Robert C. Fellmeth, the lead author, referred to the scam as “The Big Lie.”
Fellmeth and his collaborators detailed a largely-ignored 1969 report by the office of the California Deputy District Attorney which illuminated the shady goings-on at the California City Development Company real estate sales division. Their investigation, which began sometime in the mid-1960s, had been completed but not publicly distributed. A particularly scathing conclusion by the Attorney General of Mendelsohn’s real estate dealings is as follows:
In 1972, the FTC issued Great Western Cities, Inc. a cease and desist order to stop the deception fed by their misleading advertising campaign but the company’s disingenuous marketing practices continued. Not until 1974, just after the company had changed ownership once again — this time in a hostile takeover by the controversial Texan Hunt Brothers, who were the inspiration for the popular 1980s TV show, “Dallas” — would the FTC finally crack down on Great Western United, Corp. and its affiliates in the largest refund ever won by the federal agency at the time.
The Hunts were forced to pay out a $4 million settlement to 14,000 misled buyers, $16 million in community capital improvements that had been misrepresented in marketing materials along with $50,000 in legal costs for all three of its land development projects at California City, Colorado City, Colorado and Cochiti Lake, New Mexico. They were also instructed to provide a warning to possible investors that they should “consider the value of any of our land to be uncertain.”[xii] Although the settlement had resulted from the previous owner’s “deceptive land sales tactics and from violating the Truth and Lending Act” it seems very unlikely that the Hunts were unaware of the issues at hand when they acquired Great Western United Corp.[xiii] Because the settlement was spread across three land development projects in three states it wasn’t effective in providing or improving existing utility infrastructure at any one location. According to the Washington Post in 1977 about 50,000 people had purchased the excessively overvalued properties ranging in price from $2,000 to $5,000 a lot.[xiv]
A satellite map where the ghost grid of roads is visible.
Great Western United Corp. and its subsidiaries would go bankrupt ten years later in 1984 — the same year that Mendelsohn died of a heart attack while golfing at a resort community he had founded in Texas. Shady real estate outfits would continue to sell overvalued land in California City throughout the late 1980s, 1990s and 2000s that the Kern County Assessor’s Office had determined was ten, twenty and even fifty times its “fair market value.”[xv] National Recreational Properties, Inc. hired “CHIPS” star, Erik Estrada, in the early 2000s as their television "infomercial" spokesperson, hawking properties near town while another company, Silver Saddle, had already been selling highly-inflated quarter-acre lots and larger parcels, further east of the city, for many years prior.
Journalist Emily Guerin, in her engrossing 2020 LAist podcast exposé “California City”, states that an estimated 73,000 investors have collectively lost hundreds of millions of dollars after purchasing California City’s overvalued land that began with Mendelsohn’s great visionary real estate scam.[xvi] But the saga doesn’t end here.
LandBanking+ in the Desert
There are no streets in California City named for Nat Mendelsohn. No buildings, landmarks or bronze plaque commemorations. For the most part, Mendelsohn’s former presence has been erased but his legacy lingers in a contemporary version of his legendary real estate investment scheme — one that preys upon vulnerable ethnic communities and the elderly — many of whom speak English as a second language. It requires that unsophisticated investors bring family members and close friends into the twisted equation in their attempt to recoup their losses. It has looted the savings of “thousands of hard-working Californians [who have] invested their life savings in this scam” through “blatant misrepresentations” and “deliberate omission” of material information. All stated in the California Department of Business Oversight (DBO) October 2019 press release.[xvii] This is the dark side of the American Dream — desert style.
The DBO alleges that Thomas M. Maney of Lancaster, California, along with other named defendants associated with Silver Saddle Ranch & Club, Inc., initiated a “scheme that targeted Filipino, Chinese and Spanish-speaking communities with high-pressure sales tactics and false promises” violating state securities laws in the process.[xviii] It continues stating that the scam was enacted during supermarket raffles and through social media. Potential investors were baited with a “free” vacation at some Southern California dude ranch resort. This ranch, Silver Saddle, just happens to be at the foot of Galileo Hill — the very place where Mendelsohn was said to daydream about his metropolis. It is here, at California City’s “Second Community,” where the new trap was set.
In July 2020, I drove out with a friend to shoot some drone imagery of the ghost grid atop Galileo Hill just before I learned about the sordid details of Silver Saddle Commercial Development and its associated entities through Guerin’s podcast. Upon reaching the Silver Saddle Ranch, it appeared to have been recently shuttered but still maintained. “No Trespass” notices were posted everywhere. Both of us found the place odd.
At the west side of the desert rise there were about a dozen random two- and one-story tract homes. These houses looked completely out of place out along California City’s far eastern frontier — a hot and dusty seventeen miles from the town center. A few lots nearby were listed as “For Sale” with crude, hand-drawn signs. A commercial billboard, faded and cracked, announced itself as THE GALILEO COMMERCIAL PROPERTY OWNERS ASSOCIATION with “1020 acres of unsubdivided LandBanking Plus+ for future commercial or industrial development.” A red outline marked the boundaries of the future community on a map detail and the last bullet point stated, “approximately five square miles of low to high density residential subdivisions with over 10,000 residential lots.” Another faded sign nearby boasted “underground power, city water & streets installed, city trash, school, medical, fire & police serviced.” I thought to myself, “yeah, right.”
Other than the isolated houses, the lonely ranch with its looming water tower and the curious wooden octagon structure on the hill loaded with cell tower antennae, the surrounding landscape was, for the most part, completely devoid of human occupation — unless you considered the geoglyph of dirt roads that radiated outward for miles in the open desert. Indeed, this is a very strange place for a suburban housing or commercial development.
As it turns out, Thomas Maney had been a signator in the earlier FTC settlement involving Great Western Cities, Inc. He is listed as the vice-president and general counsel for the Hunt Brothers in signed legal documents. Maney’s signature appears just below W. Herbert Hunt’s in a document posted online by the “California City” podcast team.
Maney most likely acquired the Silver Saddle Ranch property during the mid-1980s through his business affiliation with Great Western Cities, Inc. During this period the ranch resort was built. In a 2017 news article, Maney comments that the Hunt Brothers had brought him in to “clean up the problems left behind.”[xix] It is not clear when the current investment scheme was initiated but the DBO press release suggests that it started in 2011. We can only speculate on what happened during years leading up to 2011 but it appears from an October 2, 2005 Bakersfield Californian investigative story by Joe Mullin that Maney and his representatives, through Silver Saddle, had been selling and reselling parcels in the Second Community this entire time.[xx]
The 2019 DBO complaint details how Silver Saddle’s “LandBanking Plus+” or alternative “The Galileo Project” offered investors until just last year, a 1,000-acre parcel surrounding Galileo Hill that was apportioned into 4,000 fractionalized interests — instead of offering lots for outright sale. Investors paid up to 100 times the land’s actual value — with many investors spending up to $30,000 for their investment that included taxes, high closing costs, a pooled development fund plus recurring membership dues and other associated fees. Financing interest rates were as high as 15.9 percent. The complaint additionally states that investors’ money was “deliberately commingled” to avoid a paper trail and to divert funds elsewhere.
In documented interviews Maney has stated that investors were clearly informed that “landbanking” at California City was a “long term investment” requiring patience to eventually pay out — but there is no sound financial basis to back this statement. Sadly, for those desperate investors who have attempted to leave the deal, representatives of Silver Saddle have threatened them with lawsuits and financial ruin. Guerin comments in Episode 5 of “California City” that up to “2,000 people have spent nearly $60 million on that dream in the past eight years alone.”[xxi] The question is: “where did all that money go?”
In October 2019, a San Diego Superior Court judge granted the DBO’s request for a temporary restraining order to stop any future land sales and froze their assets. A court-appointed receiver was assigned to sort out the mess. As of August 2020, the receiver is in the process of selling off Silver Saddle Ranch and Galileo Property’s assets. The ranch has been listed at $1,874,500 — a figure far less than what some investors claim it is worth. Now that the potential buyer has agreed to cancel escrows associated with the properties, the sale of the ranch and land can proceed. It should be noted that the landbanking investors do not hold interest in the ranch property. The sale would be used to partially pay back their investment but this would be pennies on the dollar.
Over time, Mendelsohn’s fantasy deceit would have all but faded if not for a dedicated journalist like Emily Guerin who brought the swindle back into the public realm. After she initially traveled there in 2016 to report on the city’s excessive water use caused by a slew of water line breaks (400 occurrences in 2015 alone) in the 170 miles of aging, rusted pipeline that Mendelsohn had originally built in the western developed sector of the city — did she begin her inquest into Silver Saddle’s questionable landbanking scheme. As it turned out, the DBO had been quietly doing so as well.
Today, California City’s elaborate ghost grid, etched across the desert surface and viewable only from above, continues to beckon those of us fascinated with the bizarre development patterns unique to Southern California. Although just over 14,000 people reside in California City’s semi-developed western sector, the eastern sector remains largely haunted by developers' schemes and landowners’ dreams. But, in town, there are some business owners and residents working to improve the overall impression of Cal City — what the locals here call it.
When we visited Cal City in July 2020 during the height of COVID-19 we stopped for lunch at Raven’s Nest Café located in a small shopping center complex. Having expected McDonald’s as our only culinary option, we were pleasantly surprised to find an independently-owned bakery and coffee shop — especially as the food was excellent. While having lunch we chatted with the owner who had “I ❤︎ CAL CITY” t-shirts, mugs and other promotional items for sale. We realized that their café was not only a family-run business — it was consciously designed to create much-needed community and a sense of place here. The outlook was positive. I wish the owners prosperity and hope that Cal City residents like them can transcend the negativity of the recent lawsuits and its past real estate scandals to ensure that it becomes the livable and thriving desert community that Mendelsohn could not have imagined.
To remain abreast of the legal proceedings and outcomes involving Silver Saddle Ranch and the Galieo Project click here.
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Top Image: A ghost grid of the desolate federally-held lands of the Mojave Desert. | Kim Stringfellow
[i] “The Small Tract Act (Act of June 1, as amended) Guide Book for Managing Existing Small Tract Areas,” Bureau of Land Management, U.S. Department of the Interior, April 1980, 30.
[ii] “The Small Tract Act Guide Book,” 17 - 23.
[iii] “The Small Tract Act Guide Book,” 30. The majority of Small Tract patents were issued between 1952 and 1961 primarily as five-acre parcels. The peak number of patents issued in one year was in 1960 with 9,908 patents.
[iv] Stephanie Smith, phone interview with the author on June 16, 2020.
[v] Not every Morongo Basin Airbnb listing is a mid-century recreation cabin but there are a substantial number of cabin rentals listed.
[vi] Micaela Cortez Torres-Gil, “Preserving California City: An exploration into the city plan preservation of a mid-century, master-planned community” (PhD diss., University of Southern California School of Architecture, 2015), 53.
[vii] David Colker, “California City—A Dream in Progress: Mojave Desert: The space and the expectations have been there for 30 years. But reality has not caught up with the plan. America’s 11th largest city has only 6,500 residents,” Los Angeles Times, February 11, 1990.
[viii] David Colker, “California City—A Dream in Progress.”
[x] Robert C. Fellmeth, Politics of Land: Ralph Nader's Study Group Report on Land Use in California (New York: Grossman Publishers, 1073), 320.
[xi] David Colker, “California City—A Dream in Progress.”
[xii] Carole Shifrin, “A Message to Buyers of Land,” The Washington Post, February 5, 1977.
[xiii] Carole Shifrin, “A Message to Buyers of Land.”
[xiv] Carole Shifrin, “A Message to Buyers of Land.”
[xv] Joe Mullin, “Exploiting dreams for big profits,” The Bakersfield Californian, October 2, 2005.
[xvi] Emily Guerin, “California City Episode 4: Soldiers of the Sale” (podcast) LAist Studios, July 27, 2020. https://laist.com/podcasts/california-city/season/1/episode/4.php.
[xvii] “Department of Business Oversight Sues to Stop $30 million Silver Saddle Ranch Investment Fraud,” State of California Dept. of Business Oversight, accessed August 28, 2020, https://dbo.ca.gov/2019/10/01/department-of-business-oversight-sues-to-stop-30-million-silver-saddle-ranch-investment-fraud.
[xviii] “Department of Business Oversight Sues.”
[xix] Chloe Nordquist, “California City: The city of broken promises, a bright future, and a whole lot of barren desert,” 23ABC News Bakersfield, February 17, 2017.
[xx] According to Joe Mullin’s 2005 Bakersfield Californian article Silver Saddle would acquire and resell parcels they had originally sold after the purchaser stopped paying property taxes. When land went up for auction at a county tax sale Silver Saddle representatives would buy back the parcel—often far below its fair market value. Kern County Assessor records show that many parcels were acquired in this manner, multiple times.
[xxi] Emily Guerin, “California City Episode 5: The Tragedy That Occurred” (podcast) LAist Studios, August 3, 2020. https://laist.com/podcasts/california-city/season/1/episode/5.php.
An unplanned surprise of Mendelsohn’s masterplan is two well-known birding sites at California City’s Central Park and Silver Saddle, whose water features and landscaping are particularly attractive to migratory birds traveling along the Pacific Flyway through the Mojave Desert on route to destinations far north and south. Charles Hood, author of "A Californian’s Guide to the Birds Among Us" (Heyday Books) who is based in Antelope Valley is an avid birder who frequents these locations along with Edwards Air Force Base’s Piute Ponds that are supplied from a Los Angeles County wastewater treatment plant. Mr. Hood discusses the nuances of his peculiar obsession and others like him in this post.
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