Mayorly Screwed

Thanks to a sweetheart deal involving a former mayor, Placentia faces bankruptcy

Photo by Matt OttoIf you want to know why the city of Placentia is nearly $17 million in debt, don't start with Washington, D.C.; Sacramento; or even City Hall. Instead, visit the faded-blue-stucco building at 480 S. Placentia St.

Built in 1966 on the site of what had been a Texaco station, the building at the corner of Placentia Street and Crowther Avenue is abandoned save for a couple of refrigerators, stray lumber and a rusting lawnmower. Its most recent tenant, MGZ Inc., lent out equipment such as cherry pickers, camping trailers and moving trucks through a subsidiary named Haz Rental Center for more than 30 years. But in December 2002, Haz Rental Center posted a sign outside its front door announcing that the business would relocate since "in an effort to improve our community, [Placentia] is currently in the process of renovating our streets and the surrounding areas of the railroad track throughout the city."

The memo, still posted on the building's glass door, goes on to explain that Haz Rental Center would sell off its inventory, move next door to 455 Industrial Way, and rename itself Haz Party Rental. A couple of months later, MGZ added a sign facing Placentia Street that proclaimed, "We've Moved Next Door." That sign directs people to make a right on Industrial Way, where a limp American flag marks Haz Party Rental's location. A four-foot-high, tan-brick wall separates the two properties; a ramped gap allows people to walk from the old property to the new.

The move cost Placentia residents $1.3 million.

In an era when conservatives and liberals alike are marking out the severe limits of government power, when we're told that government can't do everything for everyone, that shared suffering is our collective destiny, that gruel is really very good for you, no one seems too freaked-out when government helps the rich. In Placentia, the rich are helping themselves to millions of dollars in tax money and calling it "redevelopment." And like their counterparts in Sacramento and Washington, D.C., local officials are doing it at the expense of the city's health.

According to documents obtained by the Weekly, a 2002 appraisal put the value of the lot at 480 S. Placentia St. at about $331,436. But on Dec. 13, 2002, OnTrac, the agency overseeing Placentia's massive $440 million rail-improvement and redevelopment project, paid MGZ nearly twice that—$625,770. Documents show the council went farther, providing MGZ with another $674,230 as a "relocation/goodwill cost."

Relocation costs are standard expenses for redevelopment agencies moving tenants or businesses out of a project area. But the payment for the Haz Rental Center building was $239,230 more than the next-highest relocation payment Placentia has ever paid, despite the fact Haz Rental Center moved its operations next door.

If the $1.3 million transaction startles you, consider that it ranks third among Placentia's redevelopment payouts. Last year, the city shelled out $5.5 million for an 83,853-square-foot Office Depot and $2.5 million for two historic packinghouses totaling 161,172 square feet. To put the MGZ deal into perspective, the average price per square foot of the 21 other properties acquired by Placentia in the past three years is $51.95; the MGZ parcel averaged $70.23 per square foot.

It's worth noting that the "GZ" in MGZ Inc. stands for owner George Ziegler, a former Placentia mayor and councilmember (1982-1988) and current OnTrac adviser.

"It was a package deal," says Ziegler, when asked if he was surprised Placentia offered him so much for so little. "Whatever [monetary amount] the city gave you is what the facts are. That's public information. The dollar amount is personal and nobody's business but mine."

When I point out that OnTrac's website (www.ontrac-jpa.org) lists Ziegler as part of the committee's advisory board, Ziegler denies participating in any Placentia-redevelopment talks and says he doesn't "intend to stay close to it in any way, shape or form."

Such deals are par for the redevelopment of Placentia's historical Old Town district. The proposed project—first unveiled in April last year—has already suffered the resignation of original master developer Roy D. DePaul and has squandered about $25 million from city funds. It recently lost its most ardent City Council advocate when councilman Scott P. Brady announced he would recuse himself from future redevelopment votes after admitting he violated state conflict-of-interest laws.

"Why did [Placentia officials] pay this kind of money for the MGZ lot? It almost sounds like a good-ol'-boy deal to me," says Craig Green, a mortgage broker by day who spends every other Tuesday night lambasting his elected city representatives. "Ziegler was on the council and now advises OnTrac. They paid him way too much for the Placentia Street building. What else do you need?"

 
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