Main Offender

Steve Sheldon isn't nearly as famous as his gay-bashing evangelical-minister dad. Most people know him simply as the son of Lou Sheldon, whose Traditional Values Coalition raises money to fight the vast gay conspiracy to undermine America but has less of a problem with sins that don't involve lube. In 2000, Sheldon the elder helped lobbyist Jack Abramoff and his Las Vegas casino clients kill federal gambling legislation. Crucial to that effort was his son Steve, a Newport Beach-based public relations consultant who in the previous decade had already taken more than $100,000 from Sin City to fight Indian gaming in California.

But along Garden Grove's Main Street—one of the last relics of small-town America in the suburban sprawl that has engulfed Orange County—Sheldon the younger is rapidly becoming a celebrity. Just not in a good way. Last October, the longtime consultant to the City of Garden Grove convinced city council to give him the exclusive right to develop a $40 million condominium project adjacent to Main Street. In approving the deal, the city sold him the land—currently a city-owned parking lot serving Main Street businesses—for just $1.5 million.

In January, the Garden Grove Downtown Business Association filed a lawsuit to stop the 100-unit condo project, alleging it violates city and state law by declaring the parking lot "blighted" and handing it to Sheldon without competitive bidding.

Sheldon and city officials who pushed the project through claim the condos will help draw business to Main Street. But Main Street's business owners say the city has neglected them for the past 30 years and has now cut a deal that benefits exactly one politically powerful person. They also decry what they see as the absurdly low sale price, which translates to just $15,000 per unit of the proposed condo, each of which will ultimately sell for between $400,000 and $600,000.

"There is only one guy who will benefit from this—Steve Sheldon," said Scott Weimer, a firefighter, real estate broker and president of the Garden Grove Downtown Business Association. He and other businesses are raising money for the lawsuit at their website, "[Sheldon] has an innate ability to waltz into communities such as ours, get control of public land and then simply hand it off to another developer."

Critics like Weimer say they don't understand why the city approved the deal without opening the project to competitive bidding or an environmental-impact study. Although the city performed a parking study, it didn't bother with a more comprehensive environmental review, which would have measured how the project will affect traffic flow and local businesses once it is completed.

"The city is bending over backwards to help this developer, and I don't know why," said J.J. Juaregi, owner of the Azteca Restaurant. "It's not right to give exclusive rights to a developer without bids or an environmental study. They didn't go through due process."

"Steve Sheldon came along and saw an opportunity, and has the political connections and money to get the land and sell it off," said Pete Katz, who operates a mail box and shipping business on Main Street. "The public will suffer from it."

Until recently, Katz also served on the city's parking commission. In November, he wrote a letter to city council raising questions about the condo project. He didn't get a response until March 15, when Mayor William Dalton sent a letter back. "Thank you for your past service on the Parking & Main Street Commission," Dalton wrote. "In order to give others an opportunity to serve, I am replacing some of the commissioners with residents who have not previously served. . . . I hope you will consider service to us at a later time."

Katz isn't sure why he was fired. "I had the shortest tenure of anyone in the history of the parking commission," he said. But he suspects it has something to do with Dalton's relationship with Sheldon. Katz points to several campaign contributions Sheldon gave Dalton, including an October 28, 2006 check for $1,000—just four days after Dalton voted for his project.

Dalton didn't respond to interview requests. Sheldon refused to say anything except that his project is going to help Main Street. "It will bring home ownership to the downtown area and thus draw people to the businesses," he said. "This project was decided on its merits."

According to City Manager Matt Fertal, preserving Main Street wasn't a top priority for city hall. "Main Street has never been a significant contributor to the overall economic health of the city, and it never will be," he said. "It will never be a thriving retail center. . . . I don't think it measures up to other older downtown Main Streets, but it is what it is, and we are maintaining it. And to the extent this development might add a little more activity, that's a bonus."


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