Merrill Lynch Mob

The firm's Laguna Beach project backers are paving a little piece of paradise

However, Freeman-the city's top negotiator-was untroubled by criticism of the project's size or the incredibly shrinking park. At a recent City Council meeting, he urged angry residents "to be realistic."

Cleverly, the campaign for A and B claims the City Council will force the builder to make "more than 50 percent" of the project "open space." But that is standard developer sleight of hand, implying that the open-space area will be parkland. Actually, much of the so-called open space in the council's plan consists of narrow corridors between buildings, roads, paths, beach and even the sides of steep cliffs.

In more progressive times, the Laguna Beach City Council might have required the developer pay for-"mitigate," in the language of planning-problems created by the project. Not anymore. Led by a pro-development negotiating team, the City Council introduced Phase Four: a plan for taxpayers to pay Merrill Lynch and its partners for certain development costs. In exchange for modest concessions from the developer, Freeman and Peterson pledged the city to give the developers $500,000 to build 50 parking spaces, $600,000 to build a bluff-top park, and $300,000 to landscape along Pacific Coast Highway. The developer must have been ecstatic a year ago when the council waived $994,000 in permits, drainage fees and construction taxes. The total pledged subsidization to date: $2,394,000.

Iseman, alone on the pro-Lynch board, was speaking for any independent observer when she said recently: "I always felt that we really didn't put the heat on the developer. I don't think we were tough enough."

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