By Matt Coker
By R. Scott Moxley
By Charles Lam
By Nick Schou
By Gustavo Arellano
By Gustavo Arellano
By Steve Lowery
By R. Scott Moxley
“In every community, there are complainers, there are builders,” Edwards says with a sigh. “San Juan, naturally, has a set of complainers. We’re shocked they find something to complain about with open space . . . because who can be against open space?”
“Some folks have taken a position of, they think we should have gotten a better deal from the Ranch,” says Mark Nielsen, a councilman who was mayor when the deal was approved and who sits on the Open Space Committee. “My answer is: I agree. I would have liked to have gotten it for less money. I would have liked to have had different terms. But at the end of the day, in any negotiation, you have to make a decision.”
Critics say they they’d be less worried if those negotiations had been conducted through the normal channels of government. When approaching property owners, Gates and the other two subcommittee members were acting as private citizens, not as official representatives of San Juan Capistrano, says city attorney Omar Sandoval. When the draft of the deal they helped to pen with Rancho Mission Viejo went to the City Council, though, Gates, Lunnen and Paulsen became designated “real-property negotiators” and sat in on closed-session meetings. The purchase agreement that was ultimately approved by the council was, by all accounts, nearly identical to the one the subcommittee had brought to it.
Through spokeswoman Diane Gaynor, Rancho Mission Viejo officials—including Moiso—declined to be interviewed about the transaction and the specific reason they decided to sell. But Gates says he thinks the Ranch saw a chance to cement its historical ties with San Juan Capistrano.
Others think the motives were less noble. “I don’t think there’s any question that the principal beneficiary is Rancho Mission Viejo,” Jim Reardon says. “Follow the money: $27.5 million of public funds is going to end up in the hands of the Ranch.”
Gates says that despite his close relationship with Rancho Mission Viejo, he and the other open-space committee members worked to get the best deal from the Ranch for San Juan Capistrano—not the other way around. “We’ve been friends, very strong friends—I’d be very clear about that—for many, many, many years,” Gates says of Moiso. “Friendship may get you in the door to get the conversation started. But from that point on, it’s a business deal.”
For now, most city leaders appear to be taking him at his word. State law requires elected officials, staffers and appointees in decision-making positions to file conflict-of-interest forms detailing many of their financial holdings. But when the Open Space Committee was established in 2005, it was done with the understanding that the committee would only exist temporarily and its members wouldn’t have to disclose anything.
That fact has also led to criticism. If Gates were benefiting from the Ranch’s sale of the riding park—perhaps through holding a stake in seeing the Ranch have more cash—how would anyone know?
“All I can do is say, the City Council set it up this way, and as a volunteer, I came to the table based on that circumstance,” says Gates, who says he doesn’t have a business relationship with the Ranch. “I’ll just tell you straight out if they weren’t set up that way, I might not have stepped up and offered my help at all in this process. Why would I want to reveal everything I own in the world when I’m here volunteering my time to do a good job for the city of San Juan Capistrano?”
To hear open-space supporters tell it, Gates’ close ties to the Ranch have been an asset. “In business, I’ve negotiated deals where I’ve found a former executive of the company that we’re trying to do business with, and I get them to help me negotiate a deal because of the relationship they have,” Nielsen says. “Because they know the players, because there is a certain amount of trust that exists between that company and that former executive, it gives me a leg up in the negotiation.”
Reardon snorts at that argument.
“Governance of a public body is not the same as running a business,” he says. “I run a business; I hire people all the time with conflicts of interest, and I look for them as advantages. When you’re governing a town, we have laws in this state that are supposed to assure us there’s transparency in government.”
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It’s rare to see Gates sitting in the audience at a City Council meeting. Instead, he stands. Often wearing a windbreaker from Point Center Financial (the investment firm owned by the husband of state Assemblywoman Diane Harkey), he leans against the chamber’s back wall, taking quick glances at the door whenever someone enters or leaves.