Newport City Haul

The latest scandal in the city conservatives built

Lobdell was elated. The next day's headline read, "Glover Does Right Thing Clearing Murphy's Name."

With the ex-city manager at least superficially redeemed, the disinformation campaign then claimed it had solved the mysterious resignation-and that the answer was nothing to alarm residents. Again, the Pilot was indispensable.

Enter 23-year-old reporter Jenifer Ragland. In a Dec. 2 front-page Pilot column (grandly-and preposterously-titled "What Really Happened in Murphy Saga"), Ragland noted that after "hundreds of off-the-record conversations" with city insiders, she had decided that "the most logical conclusion you can reach is this: four council members, for a variety of reasons, had philosophical differences with their city manager and wanted to see him go. . . . They really don't have to have a good reason."

The Newport Beach establishment would love for citizens to swallow Ragland's verdict: four irrational council members-working against the public good-caused one of the city's most notable crises in half a decade. There is, however, substantial reason to believe that the Pilot's villains-Hedges, Noyes, Glover and Thomson-acted as conscientious elected officials who had more than good reason to can Murphy.

Kevin Murphy was a rising star in 1983, when at the age of 29, he was named Alhambra's top administrator. Before his 40th birthday, he hit the public sector big-time, replacing longtime Newport Beach city manager Bob Wynn. Wynn, who had been in power for two decades, left in 1992 to work for the real-estate developers, lobbyists, government contractors and local corporations who had roamed his City Hall. Nowadays, he can be found taking a financial chunk of such city-enhanced deals as the Bonita Canyon upscale-housing development near the toll road.

There is little doubt that much of the respect Murphy has maintained over the years was earned as soon as he replaced Wynn. In his first years on the job, he deftly handled several ugly crises with origins in Wynn's administration: a notorious sex scandal involving two ranking police officers, a $1.8 million employee-embezzlement case, and a massive, state-caused budget shortfall. During more than six years in office, he also tackled precarious issues, even improving employee morale while reorganizing and downsizing city departments.

But by the time Murphy was forced out in August, his $100 million-per-year bureaucracy was far from a model of efficiency and ethics. In June, for example, the city ignored protests from Noyes and Hedges and paid a ridiculous $35 per-square-yard ($65,000 in total) for institutional-grade carpeting at the police station. Bureaucrats claimed they had gotten the best deal possible. However, according to several local carpet outlets, the city spent double the fair market rate and wasted $32,000 of taxpayers' money.

As the city's ranking bureaucrat, Murphy had a responsibility to protect local taxpayers financially as well as ensuring open-government decision-making. That obligation was particularly important when it came to valuable real-estate arrangements involving public property-property such as the Newport Bay tidelands. Part of a state-granted public trust administered by the City Council, the tidelands trust includes part of Lido Marina Village, specifically a breathtaking 3,925-lineal-foot area of bayfront commercial space and boat-slip area. The property, potentially worth millions of dollars in annual profits, is visible to drivers crossing the Old Newport Boulevard bridge at PCH. Yachting enthusiasts hold a popular-and posh-boat show there each year.

For several years, the City Council has wanted the area redeveloped. At 4 p.m. on June 19, Murphy "dumped" on council members, who were preparing for their weekends, a proposed non-competitive 50-year lease for Lido marina. Even though the then-city manager later conceded the deal was "very complicated," he wanted the council to approve the lease two days later-prior to a public forum and without seeing the critical appraisal report. Murphy proposed awarding the deal to LJR Lido Partnership, a venture between Riverside-based developer Jim Ratkovich & Associates and Wall Street investment banking firm Lehman Brothers Holdings.

More suspiciously, Murphy placed the proposal on the council's discussion-free consent calendar, where items that are allegedly not worthy of scrutiny are routinely placed. He had worked behind-the-scenes with Ratkovich for nine months but told startled council members that they were under a "drop dead" deadline of a matter of days-if not hours-to study the 50-year lease and then vote.

"I'd say it was unusual," Noyes said. He pulled the item for discussion from the consent calendar, a move that infuriated then-Mayor Tom Edwards, a Murphy ally who had met privately with Ratkovich and wanted the city to quickly accept the developer's terms. Minutes into the council hearing on the topic, Edwards grew visibly annoyed with Hedges' efforts to thoroughly discuss the deal. "Let's not waste my time . . . the staff's time or [Ratkovich's] time," he said bitterly.

Councilman Dennis O'Neil-who once served as Newport Beach city attorney and today is the mayor-recoiled at the effort to rush the deal. He said he was being asked to approve a "complicated and sophisticated action tonight. . . . It distresses me to have to be able to receive this over the weekend and digest it and be able to comment on this today." O'Neil looked at Murphy and added sternly: "I wanted to point that out."

Hedges (who left office in November because of term limits) noted, "This is hardly the way to do business-especially when you're talking about a 50-year lease of city tidelands in conjunction with a redevelopment."

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