In his damning 1954 expos Billion Dollar Blackjack: The story of corruption and theLos Angeles Times, William Bonelli observed that the influential newspaper company "makes itself out to be a champion of honesty in government" but actually aligns "itself with inept [public] administration and a syndicate of hoodlums." In fact, argued Bonelli, a popular LA City Council president, the Times routinely "chose to fight those who wanted honest government."
Fast-forward 45 years, and Bonelli's rebuke remains apropos. The Times-which is still owned by the infamous real-estate developing Chandler family-wants Huntington Beach residents to be "pragmatic" and drop their quarter-century fight against a massive housing community beside the environmentally sensitive Bolsa Chica wetlands. On Feb. 25, the newspaper applauded a controversial 5-2 City Council decision to begin the annexation of Hearthside Homes' proposed gated 1,235-home development. (Hearthside Homes was formerly known as Koll Real Estate Group, a company owned by savvy Newport Beach multimillionaire Donald Koll.) Annexation from an unincorporated area of the county would effectively remove the project's last significant hurdle: Hearthside desperately needs access to city services for water, roads, sewage, fire, ambulance and police.
"Many are unhappy, but in making this decision, the city has taken a pragmatic approach," the Times editorialized, conveniently abandoning its Oct. 7, 1997 observation that "it would be ideal to leave the entire property undeveloped." The paper added that "voting now for annexation no doubt is seen by some as throwing in the towel," but it's the only "sensible" course. At a glance, the Times' arguments appear the model of liberal pragmatism. In reality, they're blatantly bogus.
The Times made two claims about the benefits of annexation that are contradicted by the basic official records of the proposal: the city "can reserve for itself some authority over what happens at the site," and annexation will bring hundreds of thousands of dollars in tax revenue to the city.
According to a provision (recital K) of a deal the Orange County Board of Supervisors generously handed Hearthside Homes in 1995, the developer was "assured" that "if the property is annexed" from the county's unincorporated area, the county-approved project cannot be altered. Simply put, with annexation, Hearthside can legally ignore Huntington Beach officials, who-thanks to the supervisors-must nevertheless foot the bill for the project's public costs.
"It's just not the way to do things in the public interest," said Dave Sullivan, a Republican Huntington Beach councilman who voted against annexation. "It's a lose-lose situation. The developer is going to build, make his money and then leave. It'll be the city's taxpayers who will be stuck."
Nevertheless, the Times, Hearthside and city bureaucrats claim that a much touted fiscal-impact study proves the city will strike a financial windfall if it "acts now" (as the Times encouraged) on annexation. No one seems interested in the fact that the county-which would have received the same "windfall"-concluded that the development was a budget breaker. Still, the project's advocates assert that taxes and developer fees will swell city coffers by $1.4 million during the first four years. The Times used that "fact" as the basis of its Feb. 25 editorial, "Pragmatic Move on Bolsa Chica." Unmentioned was a critical point the city's study obliquely acknowledges: "It is not the purpose of this report to analyze the total cost to the city of the Hearthside Homes development proposal" (my emphasis).
The report also violated a 1994 council "principle" that proclaimed any annexation analysis "must articulate" public costs for a 20-year period. Oddly, the current financial-impact statement stops at four years.
According to Sullivan, the study's numbers are "bogus." He said the city treasury "falls behind essentially from Day One" of the project because "property taxes from housing developments don't pay for all the city services" unless home values exceed $750,000 each; the average price of the new Hearthside Homes reportedly will be $350,000. Eileen Murphy of the nonprofit Bolsa Chica Land Trust estimated that the city could be shortchanged "millions" annually.
How did Hearthside arrange such a sweetheart deal? The answer is a primer on the developer-dominated inner workings of Orange County government. In 1990, when pro-Koll politicians dominated the council, the company asked the city to annex the property. Two years later, before that could happen, angry voters elected council representatives who were not as willing to bend to Koll's demands. Company officials quickly abandoned their request for annexation.
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Hearthside officials admit they always intended the project to be part of Huntington Beach but cleverly skirted local accountability by seeking approval from the notoriously developer-friendly supervisors in 1993. At the board, then-Supervisor Harriett Wieder couldn't have been more accommodating to Koll, one of her major financial contributors; Koll made sure a park at Bolsa Chica bears her name. Even then-state Senator Marian Bergeson proposed a law that would have given Koll control over almost all local government decisions about the property; her proposal failed. Koll's influence also extended to the city council where once solidly environmental politicians (Peter Green and Shirley Dettloff) softened on the development and were later appointed to state jobs by Governor Pete Wilson, a Koll buddy.
Who cares about the ugly behind-the-scenes machinations? Not the Times. They continue to editorialize about their concern for the environment-the "overheated political environment," that is-created by anti-development citizens who they dismiss as "partisans." The paper wants the residents to stop fighting Hearthside. "Picking at a string here and there," a Times editorial writer worried, "could cause the deal to unravel."
Residents aren't listening. At the council's Feb. 22 hearing, Bill Helbin elicited thunderous applause when he blasted the council majority for selling out. As Green angrily pounded the mayor's gavel, Helbin continued, "Every [campaign] sign up in the last election said, 'I'm for the environment.' We're the stupid ones. We believed you."
Nick Schou contributed to this report.