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Blog Archives - 2008 Third Quarter


The Navy's strategic use of civilians? 09/27/08


                                      by Pat Flannery                                               top^

John Q. Public was not allowed to record this "public" meeting, according to Captain Matt Brown, Commander, Navy Region Southwest PAO (Public Affairs Office). Watch a (cut short) video of this "public" meeting.

Opposite is a picture of Captain Brown's face as he gave this particular John Q. Public, me, the "heave-ho", the old "you're outta here".

As you can see, the Captain was not amused. I guess "public" means something a little different to the Navy.

But why??

An August 20, 2008 article in the Union-Tribune may provide a clue. Admiral Hering, Commander of the Navy's Southwest Region, may have accidentally let the cat out of the bag in a U-T interview regarding the Navy's economic impact on the San Diego region. This may be the dirty little secret the Navy does not want the civilians of San Diego to know:

"Hering said the new administration building, which is slated to become the Navy's center for logistics for the global war on terror, will result in a $2.7 billion impact on the San Diego community and an infusion of 22,000 jobs."

The Navy Broadway Complex is to become the Navy's center for logistics for the global war on terror! That means that San Diego's waterfront will become Bin Laden's number one target. The primary objective of every terrorist in the world will be to destroy the Navy Broadway Complex, whose known mission is to kill every last one of them. Even the Pentagon will be a secondary target to this San Diego facility.

Today's poorly attended "public" meeting was a sham. I asked Captain Brown (after the meeting, with my camera switched off as he instructed) if he could confirm or deny the Union-Tribune report. He kept referring me to the Draft Environmental Assessment.

Each time he did I explained to him that I had already read the full document online and that it did not even mention anything about the Navy Broadway Complex becoming a center for logistics for the global war on terror. He was obviously ducking my question, so I gave up and left.

Far from addressing the public's fears, as mandated by a Federal Judge, the Navy seems to be hell-bent on ramming this unwelcome waterfront facility down our throats. The only reason the Navy is holding "public" meetings now is to correct the shortcomings Judge Miller found in the Navy's compliance with NEPA law. Here is Judge Miller's complete ruling:

Quote: "In sum, the court grants Plaintiff’s motion for summary judgment on the notice claim and remands the action in order for Defendants to comply with the notice and public participation requirements of NEPA."

Was the judge informed about San Diego's waterfront becoming the world headquarters of America's war on terrorism? I doubt it. A public speaker today, who had obviously read the same U-T report, expressed concern about San Diego becoming such a center. Was that why the Navy did not want today's public comment recorded? Did they anticipate that question?

They banned all local TV stations from recording this "public" event! They only allowed camera crews in the building prior to the public comment segment and removed them all before any member of the public could get up to speak. I took my turn at the podium solely to protest this absence of TV news cameras at the actual hearing. I was told that there was a Navy court reporter present and would adequately "report" on the meeting.

The "public" segment was presided over by a military judge. Why a judge? He seemed totally disinterested in what any member of the public might have to say. When one speaker asked him if he were paying attention, which he clearly was not, the military judge replied that he had nothing to do with the subject matter of the meeting, only its orderly conduct.

So, today's "public" meeting was more like the proceedings of a court martial at Guantanamo Bay, than the U.S. Navy fulfilling the outreach obligation imposed on it by a United States District Judge. The disturbing reality is that the U.S. Navy seems to have made a strategic decision to surround its proposed center for logistics for the global war on terror with tens of thousands of unsuspecting civilians. It is hardly inadvertent.


The financial meltdown and San Diego. 09/18/08


                                      by Pat Flannery                                                top^

Ordinary Americans are now wildly running into “Munis” for a safe haven. But they are running from one fire into another. San Diego, by its Wall Street-style excesses, has proven that unfunded pension entitlements undermine Municipal Bonds. Such entitlement excesses have been repeated across the country making “Munis” the next wave of collapse.

The problem is that both Wall Street and municipal unions are operating under a false premise. They believe that the taxpayer is the ultimate risk-taker for everything. The unions believe that no matter what promise they extract from city management, the taxpayer will honor that promise. Mayor Sanders unwisely reinforced that belief here in San Diego by promising to issue Pension Bonds to pay the City’s unfunded pension liability.

To end belief in this flawed financial premise, we need another Bretton Woods Agreement. The 1944 version has run its course. The American dollar became the de facto reserve currency when in 1971 Nixon ended the gold convertibility envisaged at Bretton Woods. It is now clear that the American dollar is no longer capable of fulfilling that role. Consequently the world does not have a viable monetary system to sustain world trade.

The alternative to the free flow of international trade is war. The lack of such free trade was the root cause of both World War I and World War II. The trouble is that free trade requires a viable international monetary system, which in turn requires the pooling, to some degree, of national sovereignty. That has been a huge problem.

The European Union is the first to develop a viable international monetary system. Unfortunately such a regional trading bloc, while enriching its  members, actually hampers world trade, similar to American isolationism.

But as the best model we have, an EU-style monetary system, if applied worldwide, might work. If the fiercely independent European nations can learn to live with pooled financial regulation, could the rest of the world?

may be a hybrid system, a cross between capitalism and communism. Free-wheeling capitalism, taken to its limits, is not the answer. The Young Turks of Wall Street, with their Harvard MBAs, have killed the unregulated market golden goose. They spun the thing out of existence by attempting to eliminate risk and are now clamoring for public ownership.

The best practitioner of public ownership is communist China. It will have a powerful voice at the next Bretton Woods-style conference. The Chinese may turn out to be the ultimate purchaser of the Bank of America, which seems on the path to becoming the chosen repository of America’s financial meltdown. If China owns our mistakes, can it control us?

Locally, we need to think hard before we heap more debt on ourselves. Whatever chance we as a city have of digging ourselves out of the present financial hole, we have zero chance if we pass more municipal bond measures. We have to dispel the notion that every generation can just borrow its way out of debt. That belief is what's wrong with our system.


09/16/08 Stephen Whitburn demonstrates his independence from both unions and developers.


                                      by Pat Flannery                                                    top^

Stephen Whitburn, a candidate for Council District 3, today called for the disbandment of both CCDC and SEDC. Here is a copy of his speech and here is a short video clip of his press conference at 7th & Market, the site of CCDC's most controversial project.

These are compressed excerpts from his speech:

"Surprisingly, just as we are discovering the problems with CCDC and SEDC, there is talk of outsourcing the efforts of the City’s 11 other redevelopment areas -- those that are currently managed by our City’s Redevelopment Division. Hopefully, the City Council will not allow that idea to move forward.

This summer has highlighted profound problems at CCDC and SEDC. We should dissolve both of these corporations. We should bring these redevelopment efforts back under the city's auspices to provide better oversight and more control of taxpayer dollars.

I believe that the work that SEDC does can be better accomplished in-house, and with better oversight, through our City Redevelopment Agency. Southeast San Diego should be a top priority of that agency."

I suspect Whitburn is reading the public accurately. He believes they want less bureaucracy, not more. He believes they want more accountability, not less. It is becoming clearer which candidates want to serve the public and which want to serve special interests such as developers and city unions. This election may finally break that old political stranglehold.

Stephen Whitburn has demonstrated that he is beholden to neither the unions nor the developers. Last week he told the Labor Council in no uncertain fashion that their endorsement would not buy his vote. They wanted him to promise his vote for Hueso against Frye for Council President.  Then today he sent a clear message to the developers that he would "bring these redevelopment efforts back under the city's auspices to provide better oversight and more control of taxpayer dollars." 

Perhaps there is still hope. We just experienced the worst eight years in San Diego's history, caused by the worst City Council in history. A large percentage of those who will vote in November have never voted before. Less than half of those who will vote in November actually voted in June.

This election could fundamentally change San Diego. Voters are worried about how the financial crisis is affecting the pension system. They know that City revenue is plummeting - that the city's property tax base has halved. They may well tell the unions and developers that the party is over. They may say: No more borrowing and No more taxes.


Next giant rip-off - "Agency-Employee" Redevelopment Agency. 09/15/08


                                      by Pat Flannery                                                  top^

Currently, management services for the eleven redevelopment projects not managed by CCDC or SEDC is provided by the Redevelopment Division of the City Planning & Community Investment Department (“CPCI”).

The Redevelopment Agency (RA) has asked the staff of this Division to conduct the necessary studies and prepare the necessary documents to implement an “Agency-Employee" model for the RA. So what is an “Agency-Employee" model?

This RA report and recommendation, RA-08-07, dated April 9, 2008 gives the basic outline. On April 28, 2008 the Redevelopment Agency adopted the recommendations in RA-08-07 and set January 1, 2009 as the deadline for preparing the necessary implementation documents. It instructed the CPCI staff to give status reports every 45 days. One of those is on the RA Agenda for tomorrow Tuesday September 16, 2008.

Here is the accompanying staff "Update Memo" and "Task Implementation Report". These two documents are the focus of this blog.

The Update Memo states that "there has not been a decision made as to a permanent structure for delivery of redevelopment services." If you believe that I have some waterfront property in Arizona .....

On April 15, 2008 they snuck a change to the Municipal Code through City Council on consent. Here are the Minutes of that April meeting. Here is the amended Municipal Code. Former prohibitions against a
City official participating in decisions regarding any entity with which he/she is "seeking, negotiating, or securing an agreement concerning future employment", no longer applies to a Public Agency.

This was done so that Jim Madaffer and Toni Atkins can walk into $250,000 per year "public agency" jobs the day after they leave the City Council. And they did it by stealth using the Consent Agenda.

The Update Memo summarizes how an “Agency-Employee" model would have an Executive Director, "appointed through an Agency/Mayor committee, with confirmation by the Agency". It explains how the Mayor, or the Mayor’s designee, would serve in an “Ex-Officio” capacity on the Agency Board and how there would be a "Technical Review Committee".

This "Technical Review Committee" would no doubt be the RA equivalent of DSD's "Technical Advisory Committee", where the development industry, and all its constituent parts, gets to "advise" the Mayor's staff, every month, on how the City's land use regulatory process should impact development. In other words the developers get to regulate themselves.

Now look at this Task Implementation Report. This is where it gets really crazy! They want to set up a whole new City! Look at what is happening.

They will "meet and confer" with the unions regarding compensation packages, employee benefits, a pension plan, award incentives, management benefits, flex-benefit allotments, wellness programs, disability insurance etc. etc. Can you imagine the opportunity this will give Ann Smith & Co. to fleece the taxpayers? They can create hundreds more City millionaires. They will be retiring in droves on disability - through stress, like Jerry Sanders did. It's the oldest city trick in the books.

There will be "consultant" contracts showering from RA headquarters like confetti. All members of the Lincoln Club, Chamber of Commerce, Taxpayers Association and other good soldiers will qualify.

The Report says "the new structure must include adequate manpower, processes, policies, procedures and controls to enable the Agency to establish and operate a more efficient and effective Redevelopment Agency". Why not build its own Redevelopment Hall? It will be far more powerful than City Hall!

In addition to its "Memorandums of Understanding" with the unions it will need Service Level Agreements (SLA) with the City Attorney, the City Auditor/Comptroller, the City Clerk (for records retention & docketing protocols) and any other City entity it comes in contact with. The City Clerk will need to hire extra staff to file all those SLAs. Unlike at present where the RA is a Division of the City, this new monstrosity will need an SLA for everything. This is a dreadful waste of public money.

They say in their report that they will need "Personnel Manuals" containing "Personnel Regulations". They will need By-Laws, IT software and IT systems. They will need to purchase telephone software and telephone hardware. They will have to develop separate payroll systems, time cards, benefits administration, record keeping, in other words they intend to create a whole new bureaucracy, run by the unions and the developers.

The waste and abuse will make Carolyn Smith, Nancy Graham, SEDC and CCDC look like kindergarten pranksters.

The developers' choice of who will preside over this city within a city is "Comical Jim" Madaffer. He has served them well for eight years on the City Council and as Chair of the Council's Land Use & Housing Committee.

Like his Iraqi counterpart "Comical Ali", he will be telling us (he has been spinning it so long now he believes it himself), that all the property tax he and his developer friends will be spending lavishly on themselves, would otherwise have gone to the State.

What he means of course is that the diverted property tax would otherwise have gone to schools and that the State would then not have to "backfill" the revenue hole left by the Redevelopment Agency property tax diversion. The trouble is that the State does not "backfill" for new schools or maintenance. That is why the School Board now wants to borrow $2.1 billion and to put its repayment on the backs of first time home buyers.

Because of how Prop 13 works, first time home buyers are hit with the highest assessed values. Madaffer and his friends have had their homes for years and pay a fraction of what future first time buyers will pay. But they don't care. Their plan is to condemn the next generation of San Diegans to rent in those "multi-use" tenement buildings that are sprouting up all over the city, which the developers call their "City of Villages".

The total amount given back by the RA to all public agencies, including the County, the Schools and the City's General Fund, is only 13% of its total revenue. It uses a massive fraud called "payment in lieu" to avoid its legal obligation to spend 20% of its revenue on affordable housing. Look at downtown. Is there one "affordable" unit for every "market rate" unit? CCDC is run by developers (Fred Maas and Jennifer LaSar) who have become very expert at avoiding everything that would reduce their profit.

People get the government they deserve. If Madaffer and his friends get away with it, creating an "Agency-Employee" RA will result in the biggest rip-off since the 1996/2002 $1.3 billion pension heist. The taxpayer will be paying for a bureaucracy designed to enhance developers' profits.

And for his service, after only one year in his new $250,000 job as Executive Director of the new "Agency-Employee" RA, Madaffer will be eligible to retire at over $200,000 for the rest of his life. His pension is calculated by multiplying his last year's salary by his years of service.



Listen to the Nancy Graham tapes. 09/06/08


                                      by Pat Flannery                                              top^

In defending Nancy Graham against charges of non-disclosure of her relationship with Related Co, the directors of CCDC have left themselves vulnerable to scrutiny as to why they approved this questionable project at 7th & Market in the first place. If Nancy Graham had nothing to do with it, then it must have been approved by the Directors themselves. Who else?

Graham's conflict of interest is only a very small part of this gift of public money to the developers at 7th & Market. Up until now the media has only looked at Nancy Graham's conflict of interest. But the deal itself reeks of corruption. Let's take a look. We will start with this Staff Report.

Page 18 describes how CCDC was to "loan" the developer $10.4 million for 55 years, virtually interest free (1% for the first 20 years then 3% for the remaining 35 years) towards the land purchase price of $16.4 million. The lucky developer was therefore going to get a 55,000 square feet, 5,000 square feet shy of a whole city block, for $6 million.

But the developer wasn't even going to pay that. CCDC would pay $32.9 million for a "public parking facility" imbedded in the building. It was to be a seven story garage, above grade, accessed from 8th Avenue. It would provide 630 spaces at $52,182 per space. Complete with "horizontal strips of LED lighting" this portion of the building was to be "one of the more dramatic features of the design". The costings of this "public parking facility" would provide the perfect cover for ploughing back the $6 million.

And guess who would come up with the $32.9 million? You guessed it, you and I. CCDC was going to issue "tax-exempt Parking Revenue Bonds". Our top city staff sit around every day figuring out ways of enabling shyster developers to build high-rises - with our money.

These are the times that Nancy Graham had meetings about 7th & Market (underlined in red). Her calendar shows that she called her very first meeting on 7th & Market in her office on December 14, 2005. Her first day on the job was December 1, 2005. Eager wasn't she?

Please listen to this audio clip obtained as part of a larger public records request by my friend Ian Trowbridge. It is from the official tape of the "Real Estate and Budget/Finance & Administration Joint Committee" meeting on April 23, 2008, Item # 6 (Nancy saw "Joe's" email on April 9).

First you will hear Nancy Graham protesting her innocence about not having a relationship with Related. Then she emphatically denied any involvement in negotiating the 7th & Market sweetheart deal with Related and CityLink. She names names, both inside CCDC and outside consultants. She called them the "negotiating team". But no director!

We are expected to believe that a $409 million CCDC deal was done by inside staff and outside consultants only, without any involvement whatsoever by either herself or any of CCDC's directors!

Next you will hear Jennifer LeSar coming in with a self-serving defense of Graham. But she let slip a little gem: commenting that "as Fred knows, when you are chair, you spend a lot of time with the COO". LeSar and Maas want us to believe, that in all that time, they never discussed 7th & Market with Nancy. LeSar went on to opine that "whoever is behind this behavior is atrocious". She said she was "very proud of" and that we are "lucky to have" Nancy. Either LeSar is a very poor judge of character or..

Finally, listen to Maas also condemn the behavior of whoever raised this issue of conflict of interest against Graham. He called it "outrageous". He expressed his unqualified support for Graham. "Categorically and for the record" he assured us that he had never had discussions with Graham about 7th & Market. Then h
e must have approved this gift of public funds all by himself. No wonder he suspended his investigation into himself.

Obviously the
cover-up started immediately after "Joe" wrote his email to the San Diego Metropolitan Magazine, and continues to this day. The insider immune system kicked in right away and continues the fight. These "public input meetings" organized by Jennifer LeSar are less about finding a replacement for Graham than they are about covering up the hiring of Graham in 2005. That's when all this lying and deceit started.

Read this email LeSar sent to some sympathizers asking for favorable "public" input at her "public" meetings. In it LeSar thinks CCDC is "trending in the right direction" and that many of Nancy's traits "(excluding failure to disclose conflicts) continue to be valued". Well of course.

LeSar and McNeely were on that 2005 committee that "found" Nancy Graham. How they "found" her they have yet to explain. Last week Sanders rushed to the aid of this insider cabal by reappointing the three people most closely associated with Graham: Maas, McNeely and Kilkenny. To underline what an incestuous little group this mayoral pool of insiders is, he appointed McNeely's wife to the SEDC board late on Friday evening when he thought nobody would be looking.

This will all come home to roost on Sanders' desk one day. He may follow Dick Murphy down the "Via Dolorosa" . Meantime true to character he will "deny, delay and deceive". But it will catch up with him, of that there is no doubt. Facts are stubborn things, as Richard Nixon eventually discovered. Sooner or later one of this incestuous little insider group that hired Nancy Graham and Carolyn Smith to do its dirty work, will run for cover.


Proposition S is a Second Mortgage on all our homes. 09/04/08


                                      by Pat Flannery                                               top^

I feel like Don  Quixote “tilting” at windmills or David facing Goliath in single combat, going up against the mighty San Diego Unified School District. But somebody has to slay the dragon: the District’s Proposition S, a $2.1 billion Second Mortgage on all our homes. It is just flat out wrong.

I am a long-time Realtor and know firsthand on whose shoulders this $2.1 billion Second Mortgage will fall (I get to write the purchase estimates for would-be homebuyers). The First Mortgage of $1.5 Billion, 1998’s Prop MM, is still there. It will not be fully paid off for decades.

Can you imagine being able to take out a First, then a Second Mortgage on your neighbors’ house and sending them the bill? Well, that’s exactly what the School District and its business partners have done and are trying to do again. Will they do a Third, a Fourth, a Fifth? Just because they can! You bet they will. You see the School Board is largely elected by the very business interests that get to spend this borrowed money. Our money. They even pack the statutory Independent Citizens Oversight Committee and give themselves "Golden Watchdog" awards!

It gets worse. The bulk of the mortgage bill will be sent to first time homebuyers, those who can afford it least. It is particularly cruel on the lowest homeowner rung, the condo owners. Because of how Prop. 13 works, the more recently you bought your home the more you pay. Before Prop. 13 all properties were treated equally. All properties were revalued each year at current market value. A single rate of tax applied to all.

Because this was driving older people from their homes, Prop. 13 capped the rate of increase to 2% per year. It worked. People who now own their homes for a long time pay very little property tax. The trouble is that large corporations are hiding behind the skirts of these older people. The corporate owners of large commercial properties get exactly the same tax benefits as the 90-year old grandma still living in the home her long-departed husband built in La Jolla with his own hands in the 1940s.

A fairer way has to be found to fund our schools. Just as we had to protect our older people in 1978 we now have to protect our younger people. Their challenges are severe enough already. The entire cost of schools cannot be put on the backs of this one section of the population.

Commercial property owners and Redevelopment Agencies need to pay their fair share. As it is right now, condominium owners pay more property taxes than all the commercial property owners put together. And the bulk of these taxes from commercial properties go to Redevelopment Agencies!!

I have no problem with grandma living out her years in La Jolla undisturbed by the needs of our schools. But I have a huge problem every time I write a purchase estimate for a first time home buying couple and watch the shocked expression on their faces as I confirm that their monthly property taxes on a median priced home or condo will be more than their current car payments, knowing that the businesses they work for are not paying their fair share.

According to the County Tax Assessor the total valuation of all commercial properties in the county is $51.3 billion, while the total valuation of all condominiums in the county is $52.5 billion. Go to “Fair  Share for Schools” for a full explanation of this together with all the assessor's data.

The simplified cause is that condominiums change ownership more often than commercial properties. That has created a huge windfall for commercial property owners. But nobody wants to talk about it, least of all the mighty San Diego Unified School District. Another one of the dirty little secrets in this city is that its commercial properties as a whole are grossly under-assessed, therefore under-taxed. That is profoundly unfair.

Until this fundamental inequity is fixed, the School District should not put a Second Mortgage on the homes and condos of our already cash-strapped sons and daughters’. Not only is it unfair, it is bad economics.

If you agree that Proposition S is unfair go to “Fair  Share for Schools” and charge a few dollars to your credit card to help defeat this massive transfer of wealth from first-time homebuyers to big businesses under the guise of educating our children. It is actually corporate welfare.

We must alert the vulnerable younger people about this raid on their finances. They are so busy trying to make a living, they don’t have time for “politics”. But this is more than “politics”, it is their very future and their children's future. For the sake of fairness, Vote NO on Proposition S.


CCDC Director Kilkenny knew all about Nancy Graham. 08/31/08

                                        by Pat Flannery                           top^

Here is a key email between Nancy Graham and CCDC Director Kim Kilkenny, on April 9, 2008. From it we can piece together portions of the Nancy Graham/CCDC Board/Related scandal.

Some time before April 9, 2008 a person called "Joe" wrote a long email to Tim McClain, Editor of San Diego Metropolitan Magazine, attaching lengthy cuttings from various newspapers in Miami, Las Vegas and LA.

Obviously "Joe" is a little naive about how San Diego's establishment works. Instead of investigating it McLain forwarded the email to William Jones, the San Diego developer at the center of the scandal. Jones passed it on to Graham who shared it with CCDC Board members. Nice work McLain. That's why the establishment loves you. You're their guy.

But CCDC director Kim Kilkenny (opposite) smelled a rat. He immediately suspected an investigative journalist named Nancy Fay of The Reader. Fay had written a stinging exposé of his bosses, the Baldwin brothers, entitled "Promise Breakers" in The Reader back in 2002. The Baldwin brothers own most of the Otay Ranch Co. of which Kilkenny is the Executive Vice President.

Nancy Fay had exposed the Baldwins as tricksters and con artists who set the standard for the bait-and-switch tactics now routinely practiced by San Diego developers. What does that say about Kim Kilkenny - the man Jerry Sanders wants to reappoint to another three years on the CCDC Board? It means that the Baldwin-Kilkenny style of bait-and-switch is now an accepted tool of the developer trade under Mayor Jerry Sanders.

But the most disgusting part of all this is that Sanders is re-appointing both Kilkenny and Fred Maas (opposite) to the CCDC board as a direct reward for contributions.

According to this article in the U-T dated April 20, 2008, the Baldwin family and its employees is the biggest single giving bloc in the 2008 San Diego city elections.

Baldwin gave $13,800, far outstripping the next-biggest contributors, EDCO Disposal at $6,900 and Sempra Energy at $6,400. Fred Maas's Black Mountain Ranch LLC comes next at $6,100. The Beatles may have been right that "Money can't buy you love", but it sure can buy you key appointments in the Jerry Sanders' administration.

Carl DeMaio and April Boling each received $3,240 from this very civic-minded Orange County Baldwin family. Democrat-in-name-only (DINO) and good friend to developers, Todd Gloria, also got an undisclosed amount. But the Baldwin favorite public servant is still Jerry Sanders.

Jerry got $4,800 in 2005 and $3,520 in 2008. But he said he wouldn't know them "if they were to walk in right now". April Boling said that those nice Baldwin boys "just want San Diego to clean up its books". I just worry about what April means by "clean up", that's all. DeMaio, like Sanders, said he had never met them and would not do them any favors. We'll see.

What is most disturbing about the Kilkenny/Graham email is that Kilkenny's immediate reaction was to protect Graham, not the public interest.  He wanted to know "who said something". He warned her about investigative journalist Nancy Fay, saying that if her name came up "we should talk". Working for the Baldwin brothers, Kilkenny probably knows a bit about how to fend off investigative journalists like Nancy Fay of The Reader.

The sad reality is that in San Diego the public interest comes a distant second to the interest of developers like the Otay Ranch Co. and Black Mountain Ranch LLC. Jerry Sanders is bought and paid for by the builders and developers. In return for funding his election, they get to keep the profits, while the taxpayer funds the supporting infrastructure and the schools. Jerry gets a comfortable retirement. It's called public-private partnership - the public gets the bill, the private partner gets rich.

What did CCDC board members know and when did they know it? 08-23-08

                                        by Pat Flannery                           top^

Take a look at the number of times Nancy Graham met with people from Manchester's Navy Broadway project over a period of 2 years. Here is a compilation of her calendar for 2006, 2007 and 2008. It shows that she devoted an enormous amount of her City time to this single project.

She even had a regularly scheduled weekly meeting with Doug Manchester himself. On December 13, 2006 she attended a celebration of the successful completion of the first phase of the project.

Was she just doing her job? Or, in light of what we now know about her, was it more? It is unheard of (even in San Diego) for a single developer to have that kind of access to the very government official with decision-making authority over their project. Clearly Nancy Graham badly wanted that project to succeed. Why? Did she own part of the action?

We know from her Florida history as a public official that she likes to become partners with the developers she regulates. That's how she got involved with The Related Group and Lennar. Nancy is more than just a hard working bureaucrat . She and her ex-husband Kevin made a quick $7 million on one Florida condominium project alone.

She did not come to San Diego for a salary, not even $250,000 per year. She was way past that. She was a successful developer in her own right. She was Manchester's mentor, maybe even his partner - at City expense!

Or was she perhaps the agent of Jorge Perez of The Related Group who had asked for and got a share in the biggest deal in town: the Navy Broadway Complex? If Perez had succeeded in placing his prized asset, Nancy Graham, at the very heart of land use entitlement in San Diego, it would be natural for him to extract a price for steering Manchester's project through the permitting process, which Nancy did with extraordinary diligence and dedication. Neither Graham nor Perez are amateurs and Manchester needed all the help he could get to pull off Navy Broadway.

Manchester Pacific Gateway is a Delaware LLC. The fact that it contains the word "Manchester" means nothing. Anybody, that's right anybody, could have a share in Navy Broadway and the citizens of San Diego would never know. That's how the developer game is played in San Diego. It turned out that "local" developer Corky McMillin only owned 50% of the Navy Training Center or Liberty Station as he renamed it. We have no idea to whom we gave away that crown jewel for $1.

Attorney Ron Corrico writing about NTC in the Daily Transcript on January 29, 2002 said it best. I have often referred to his article. Thanks Ron:

"This seems like a very large giveaway to a builder. But what really concerns me is that McMillin is partners with out-of-state and perhaps out-of-country companies, and the ownership of these organizations is undisclosed. They are hidden from view because they are Delaware Limited Liability partnerships and companies, and the state of Delaware doesn't divulge the real people involved. For all we know the partners could include Ross Perot, Osama bin Laden, Richard Silberman, Byron Wear or even Susan Golding."

He goes on to describe the Charter Section outlawing exactly what has become routine practice among developers in San Diego while the Mayor, the City Attorney and the City Council turn a blind eye:

"The San Diego City Charter mandates that all persons doing business with the city must disclose their identities. The City of San Diego Charter Article XIV Section 225 states "Unless the person applying or bargaining therefore makes a full and complete disclosure of the name and identity of any and all persons directly or indirectly involved in the application of proposed transaction and the precise nature of all interests of all persons therein."

The section goes on to say that "failure to disclose all of the information enumerated above shall be grounds for denial of any application or proposed transaction or transfer and may result in forfeiture of any and all rights and privileges that have been granted heretofore." Section 225 defines the term "person" as "any natural person, joint venture, joint stock company, partnership, association, firm, club, company, corporation, business trust, organization or entity."
But we don't enforce it!

So it is not a stretch to say that for all we know Jorge Perez of The Related Group is Doug Manchester's partner in the Navy Broadway Complex and Nancy Graham is his agent. That is why we need a full investigation into everything that woman touched and why we need to finally start enforcing Charter Section 225. Its lack of enforcement is the enabler of so much corruption - perhaps the reason our legislators seem to like it so much.

Did any member of the CCDC board cooperate in making Graham's hiring look normal? To look like the result of a genuine executive search? Why are they so secretive about it now?

The CCDC Board recently appointed an ad hoc committee to find Graham's successor. It held a public meeting on Wednesday August 20, 2008, which I attended. The agenda for the meeting said that the committee "welcomes comments regarding the characteristics and responsibilities of the new CCDC President". They handed out this report prepared by The Center for Organization Effectiveness in 2005 and "condensed" on August 20, 2008.

I compared a previously obtained copy of the same 2005 report and it turned out that "condensed" meant the removal of this page. Why would they be sensitive about who was on Nancy Graham's selection committee back in 2005? The missing page shows that the committee consisted of two former CCDC board members, Gil Johnson (Chair) and Victor Vilaplana, together with Robert McNeely who is still on the board.

I noticed that Vilaplana was present at Wednesday's meeting. Who wanted that page removed from the 2005 report? Are they all getting scared now? Do they all know that the so-called nationwide search for Nancy Graham was a sham? They better have more to show than an in-house highly academic feel-good puff piece by Dr. Trudy.

Dr. Trudy Sopp retired from the City with "32.38 years of creditable service. Effective date 01/27/07" according to the minutes of a Pension Board meeting dated January 19, 2007 (page 2).

Dr. Sopp's
San Diego Centre for Organization Effectiveness was created in September 2000 as a Joint Powers Authority (JPA) between the City of San Diego and the County Water Authority (CWA) out of an existing City Department, formed in May 1994, also called The Center for Organization Effectiveness, "whose purpose is to develop, market, distribute, and publish organization development, management development, training, and other products and services for the San Diego region". Anybody could be forgiven for mistaking it for an outside agency.

It operates out of the City-owned
World Trade Center at 1250 Sixth Avenue downtown and has a governing board of five, three appointed by the Mayor and two appointed by the CWA. It is off-budget as far as the City's finances and governance is concerned. Perhaps that is why it is now a JPA instead of a City Department. It comes in handy sometimes.

It uses the same name as an organization in Wisconsin. Nowhere on its web site does it mention that it is associated with the City of San Diego. It says: "The Center is located in downtown San Diego where we have our administrative offices, a large and attractive training facility and several break off rooms. This site also houses a CENTRE library of books, articles and educational videos available to CENTRE customers".

So it looks like the Nancy Graham story has a long way to go yet. She has gone missing! Not even her family in Tennessee seems to know where she is. Perhaps she has sought peace and solitude in the Cayman Islands or Montserrat for a few weeks, as David Dominelli did back in the 1980s. But even Dominelli eventually had to come home and face the music.

The question is who is she going to bring down with her? What did CCDC board members know and when did they know it?


The Related Group may have brought Nancy Graham to San Diego, not the other way around? 08/12/08

                                        by Pat Flannery                           top^

In 2000 the Black Historical Society of San Diego discovered that CCDC wanted to build an ugly parking structure, to be known as "Park it on Market South", covering the entire block between Island & Market and 6th and 7th. CCDC had already acquired ownership of all but the Clermont Hotel, one of the last remaining black historical sites in San Diego.

In an interview with Karen Huff-Willis, Chairperson of the Black Historical Society of San Diego, on Monday August 11, 2008, I took video pictures of a rendering of an alternative proposal put forward by the Black Historical Society in 2001.

The Society wanted to incorporate the historic Clermont Hotel into a more attractive mixed-use project. They suggested that CCDC publish an RFQ/P for such a project. CCDC was still thinking parking garage.

In 2002 Karen Huff-Willis, contacted an ambitious black San Diego developer named William Jones. Jones was quick to see the possibilities and became obsessed with the project. For the next year he flitted back and forth between Ms. Huff-Willis and CCDC trying to put a deal together.

By 2003 it was becoming clear to Huff-Willis that the CCDC board wanted Jones to be instrumental in getting Huff-Willis to "turn down the heat" on trying to preserve black historical sites (she had recently won historical status for the Clermont). She was told by Jones that if she wanted the Black Historical Society to be part of any 7th & Market development or even to have a black museum downtown, she better back off.

Huff-Willis stood firm. She knew that Jones had been unsuccessful in getting a development partner. He was much too small to do it on his own and had been pitching the deal to big players like Malin Burnham.

By 2005 Jones still did not have a 7th & Market partner and relations had cooled (but had not broken off) with Huff-Willis, who has money of her own and is not as hungry for developer gold as Jones. She is a mild-mannered lady and  genuinely cares about black history.

At a Black Historical Society's baseball night out at Petco Park in the Fall of 2005, Jones excitedly informed Ms. Huff-Willis that he had found a developer-partner: The Related Group. He said he had talked to newly-appointed CCDC President Nancy Graham and that it was "a done deal". In the course of numerous meetings with CCDC nobody told Ms. Huff-Willis that there was a prior relationship between Graham and Related.

Could it be that Related brought Nancy Graham to San Diego, not the other way around? Very little is known about the "nationwide" search for and recruitment of Ms. Graham, except that it coincided with William Jones finding an out of town partner for the 7th & Market project. What we do know is that everything got into full swing at 7th & Market as soon as Nancy arrived. Her predecessor, Peter Hall, had resigned earlier in 2005.

Who is Related? Essentially it is one guy, Jorge Perez. Much has been written about this unusual man. He has been called the “Trump of the Tropics”, the “Bill Gates” or “Steven Spielberg of Development” and the “Messiah of luxury housing”.

Here's what Perez's Las Vegas partner, George Clooney, had to say in 2005 about Perez with regard to their much-hyped $3 billion, 11 tower, (now defunct) project called Las Ramblas:

"Related is also responsible for some of the most spectacular mixed-use projects in the world such as the Time Warner Center building in New York and the CityPlace project in West Palm Beach, Florida........Time magazine recently named Jorge Perez one of the 25 Most Influential Hispanics in America."

Perez and Clooney later "cancelled" the Las Ramblas project in 2006, selling the land for $202 million having purchased it for $90 million. Not bad for merely pushing some paper around.

In his quest for a San Diego partner William Jones could not have been unaware of such a well-known developer wheeler-dealer as Jorge Perez. Did Jones contact him sometime in 2005? If he didn't he should have.

Who is William Jones? Here's a bio Sempra Energy had on its web site for Mr. Jones as one of its directors. He is a pretty well connected guy.

In partnering with Jorge Perez he may have wittingly or unwittingly brought Perez's favorite government insider, Nancy Graham, to San Diego.

Perez would have pointed out to Jones that if you want to do serious urban renewal you need your people on the inside. Perez learned that from Nancy Graham in West Palm Beach on the CityPlace project.

Here's what Perez had to say about Graham in May 2002: "Strong mayors can make a lot of things happen," he says. "Nancy Graham [the city's first strong mayor] had the power to make decisions ... we were no longer making decisions by committee." That was the clear lesson of CityPlace.

Was parachuting Graham into the heart of San Diego government as head of CCDC, Perez's condition for partnering with Jones? Was the nationwide search for Peter Hall's replacement just the usual theatrics put on by this developer-friendly agency for a gullible public?

William Jones had been a staffer for City Councilmember Leon Williams at the age of 17. He succeeded him as Councilmember for the 4th District. He was befriended by Sol Price who is said to have sponsored him through Harvard Business School where he got an MBA. San Diego Metropolitan magazine wrote him up in February 2006.

It is entirely possible that William Jones and Jorge Perez hit it off famously. Both understood the advantages of having somebody like Nancy Graham on the inside making key decisions. Perez wanted nothing more to do with "decisions by committee" and that suited Jones just fine.

Right now all the focus is on Nancy Graham, but I wonder if some of the CCDC board members were not co-opted into the scheme. The circumstances surrounding the hiring and appointment of Graham should be investigated thoroughly. We need to know who knew what and when.

In my interview with Ms. Huff-Willis yesterday she expressed the belief that William Jones knew of the relationship between Graham and The Related Group from at least the time Graham was hired. The hiring of Graham and Jones finding a development partner, were just too closely connected.

During a breakfast meeting between Huff-Willis and two CCDC Board members, Robert McNeely and Gil Johnson, at the posh University Club in early 2006, Ms. Huff-Willis also got the impression that at least these two directors knew all about Graham and Related. The three had met to discuss the Black Historical Society's place in the 7th & Market project.
Robert McNeely Gil Johnson

Gil Johnson had headed the CCDC committee that hired Graham.

Whatever the truth of the Graham/Related/Jones affair, and we may never know the full truth, it is time to get back to old-fashioned "decisions by committee", whenever the public purse is involved. There is an enormous amount of public money involved in "redevelopment". The toleration of these two developer-controlled corporations, CCDC and SEDC, continuing to manage large amounts of diverted property tax revenue, is simply outrageous. If Mayor Sanders' "reform" agenda is to retain an ounce of credibility he must disband these two dysfunctional institutions immediately. Otherwise San Diegans will lose all faith in City government.


The San Diego taxpayers are paying twice for schools. 08/09/08

                                        by Pat Flannery                           top^

San Diegans are taxed enough. The assessed valuation of all properties in San Diego County grew from $10 billion in 1979 to almost $400 billion in 2008. The graph below traces the course of that explosive growth.

After deducting various exemptions, such as the homeowners exemption, the net taxable valuation in 2008 is $374 billion. The graph below shows the breakdown by land use. Residential is 78% of the total!

Don't buy into the PR that the business community is the largest taxpayer in the county. It is not. The County Supervisors (largely elected by the business community) publish a misleading document every year entitled "The Largest Taxpayers". This is pure PR on behalf of 30 of the largest corporations in the county - payback for political contributions. Besides, much of that is "tax increment" and goes to "redevelopment" projects such as Doug Manchester's waterfront hotels.

The truth is that the largest taxpayer by far is the hard-working, two-job, family who purchased their American dream, a single family home or condominium. They are now struggling to make mortgage payments. The estimated property tax on a $500,000 house or condominium is $6,250 per year or $520 per month. I know, I write hundreds of such estimates to shocked would-be home buyers every year. They are the forgotten ones.

Of that 78% or $293 billion, San Diego City accounts for $166 billion or 44%. See the following graph for all the cities in the county. Thus, property tax on the densely populated areas within the City of San Diego is the main cash cow for all governmental agencies in San Diego County.

$166 billion in assessed valuation translates into $1,666 million in tax revenue (1% according to Prop 13). Of that $1,666 million tax, $1,295 million (78%) is collected from residences within the city boundaries.

Based on the latest data available from the County Tax Assessor, the distribution of the County's 1% tax revenue is approximately as follows: 

The important point here is that almost $400 million per year is going to Redevelopment Projects countywide. Approximately 43% of that $400 million, $172 million, is what schools are losing to Redevelopment Projects each year. That could service much of our school bond requirements.

The proposal for $2.1 billion in additional school bonds would allow the developers to keep all the $400 million and place all the new tax burden on the already overburdened residential property owners! It will impact particularly heavily on those young people who purchased their homes in the last few years because they have the highest assessed valuations.

The law that enables the financing of Redevelopment (by allowing Projects to keep that portion of the 1% property tax known as "tax increment") has built-in caveats regarding affordable housing and schools. Both are being abused in San Diego. It is time for a serious taxpayers' debate on this important issue. This new $2.1 billion bond proposal may do just that.


The Redevelopment Agency is stealing from the schools. 08/08/08

                                        by Pat Flannery                           top^

Section 33680 of the California Redevelopment Law clearly states:

"(a) The Legislature finds and declares that the effectuation of the primary purposes of the Community Redevelopment Law, including job creation, attracting new private commercial investments, the physical and social improvement of residential neighborhoods, and the provision and maintenance of low- and moderate-income housing, is dependent upon the existence of an adequate and financially solvent school system which is capable of providing for the safety and education of students who live within both redevelopment project areas and housing assisted by redevelopment agencies.  The attraction of new businesses to redevelopment project areas depends upon the existence of an
adequately trained work force
, which can only be accomplished if
education at the primary and secondary schools is adequate and
general education and job training at community colleges is available."

Has this been happening in San Diego? Obviously not, otherwise the School District would not be strapping the taxpayers with another $2.1 billion bond measure. The School District should first require the Redevelopment Agency to fulfill its obligations under Redevelopment Law.

The fact is that whatever portion of this $2.1 billion that should have been shouldered by the Redevelopment Agency is a taxpayer subsidy to developers who have made billions on so-called redevelopment in so-called blighted areas like the Marina District, Little Italy and NTC. Over 90% of downtown property taxes are diverted to the Redevelopment Agency.

Voters need to take a close look at the effects of this tax increment diversion (the source of Redevelopment's mega-dollars) before buying into the argument that school bonds are the only source of funds for our schools. Tax increment dollars, that should have gone to teachers and books to create a trained work force, was squandered on staff parties and giveaways to insider developers like Chip Owen and Corky McMillan.

Voters are being asked to backfill developer greed - $2.1 billion of it.

Does our Auditor have to seek Sanders' permission on  everything? 08/05/08

                                        by Pat Flannery                           top^

I can (almost) understand any Mayor wanting to control the flow of information from his/her office to the media and to have it routed through a savvy communications guy like Fred Sainz, but the City Auditor? Should it apply to him too? He is supposed to be independent of the Mayor.

Here is an email from our City Auditor, Eduardo Luna, asking Fred Sainz for permission to respond to a routine media enquiry regarding the  performance audit requested by Councilmember Tony Young on SEDC.

Sanders is denying all knowledge of what was really going on at SEDC, when it is obvious that he vetted every piece of information regarding that agency. Reading Luna's pathetic email to Sainz it is obvious that Sainz acted as censor and Master Inquisitor - even of the Auditor!

Our City Auditor, the very person tasked by the citizens to monitor the activities of powerful people like Sainz, had to get that very person's permission to answer a routine media inquiry! That's unacceptable.

Private water desalination vs. Public reclamation. 08/04/08


                                      by Pat Flannery                           top^

In Greek Mythology Poseidon was the god of the sea. He was not a nice guy. For one thing he raped his granddaughter, Alope. He competed with Athena, the daughter of Zeus, for what became Athens. Both gods and people had the vote. Poseidon offered sea water while Athena offered olive trees. Athena won by one vote. But all the gods voted for Poseidon.

And so it will be with California's first major desalination plant right here in San Diego county. The gods (the power establishment) will vote for Poseidon, but will the people vote for olive trees and a new Athens?

Poseidon              vs.                  Athena

Let's look at what has happened with our Poseidon so far:

The players: the San Diego Metropolitan Magazine reported the move of Scott Maloni from Tom Shepard to Poseidon on June 10, 2008: "Over the years, Scott has been instrumental in advancing the company’s Carlsbad desalination project," says Poseidon Senior V.P. Peter MacLaggan."

Tom Shepard's lobbying company, Public Policy Strategies is a registered lobbyist for Poseidon. Here is an extract from the registered lobbyist list from the San Diego City Clerk's web site for 2006. What Maloni was lobbying for actually happened at the County Water Authority meeting on July 27, 2006. Here is a Union-Tribune report published the following day.

Here are the minutes of that July 27, 2006 meeting.

"Vice Chair Watton moved, Director Irvin seconded, and the following motion passed with one abstention by Director Quist:
1. Do not certify the final environmental impact report for the Regional Desalination Project at Encina;
2. Direct the negotiating team to terminate negotiations with Poseidon for acquisition of property."

At the stroke of a pen the SDCWA was out of the desalination business and Poseidon was in. It was interesting that this coup took place during Marcela Escobar-Eck's short one year career as Planning Director for the City of Carlsbad. Was she loaned to Carlsbad (from the City of San Diego) for that purpose? I have often wondered what her sojourn up there was all about. She was at this crucial meeting.

On March 16, 2006, Andrew Kingman, CEO of Poseidon, Peter MacLaggan, Project Manager of Poseidon and Walter Winrow, President of Poseidon all wrote $300 checks to Jerry Sanders. Then on December 4, 2006, Poseidon Resources wrote a $2,500 check to the San Diegans for City Hall Reform. Why would they do that after Proposition B & C were safely passed in November? Was the contribution really for Tom Shepard for all his hard work for Poseidon? He managed Prop B & C.

In May 2006, Sanders hired Jim Barrett as Director of the San Diego Water Department. Barrett has been an important player in the Poseidon affair. San Diego is the biggest shareholder in the regional water board and Barrett is Sanders man on that board.

In the meantime Tom Shepard was shepherding Poseidon through the entitlement process. He thought he may have found a way of tripping up "toilet-to-tap" or "T2T" as they were now calling it. Somebody tipped him off about Section 116551 of the California Health & Safety Code, .

So he wrote Fred Sainz and asked him to check it out. Fred did. He went to the top guy. He emailed Jim Barrett. He even explained why he and Shepard needed to know: "it may be a strategy for rationalizing why we can't implement the program". Thanks Fred. That was very helpful.

Barrett passed it on to his Deputy, Marsi Steirer, who knew the answer. Fred duly passed the answer back to Tom Shepard. That's why Tom Shepard gets paid the big bucks. He has access. You get that by electing the guy you want access to. Shepard managed Sanders' campaign.

That's why we San Diegans will get Poseidon, not Athena, if the Coastal Commission is as bought off as our San Diego politicians and civil servants obviously are. Anybody who can, should attend the Coastal Commission's meeting at 9:00 AM this Wednesday, August 6, 2008, at Oceanside City Hall, 300 N. Coast Highway. Please go and speak up on behalf of Athena's olive trees. Otherwise we get the rapist Poseidon.


Goldsmith's two Democratic endorsees are actually lobbyists for Republican-controlled projects. 08/03/08

                                        by Pat Flannery                           top^

I was not surprised last week when two ex-Democratic State Senators announced their endorsement of Republican Jan Goldsmith for San Diego City Attorney. Politics is all about money.

You see, both these ex-State Senators, Dede Alpert and Wadie Deddeh, are now lobbyists, one for the transportation industry and the other for the energy industry.

While a California State Senator, Wadie  Deddeh became known as "the father of the State transportation system". The 300,000 square feet, Carrier Johnson designed, $71 million, new Caltrans regional headquarters on a 12 acre Taylor Street site near Old Town, was named for Wadie in 2006.

Deddeh now works for a Sacramento-based lobbying firm, Ellison Wilson Advocacy, LLC, who according to its web site "represents a diverse group of clients with an established record in handling wide-ranging and complex issues including transportation, education, public safety, resources, community and economic development, government contracting, health care, and business development." Wadie was a good catch.

The other ex-pol endorsee,
Dede Alpert works for Nielsen, Merksamer, Parrinello, Mueller & Naylor, LLP, who according to its web site; "frequently represent clients before major local, state and federal regulatory agencies and have considerable expertise in advocacy before the California Legislature and Executive Branch". Dede was a good catch.

While Ms. Alpert is most often associated with public education, she became very involved with and has a long history in energy issues, particularly as they relate to the welfare of SDG&E.

According to the Sacramento Bee on April 4, 2001:
"Sen. Dede Alpert, D-Coronado, sold her shares last summer in Sempra, the company that owns San Diego Gas &Electric. At the time, Alpert was the author of major legislation dealing with the first wave of the electricity crisis in San Diego. But she has kept her stake in Edison International, the parent company of Southern California Edison."

The Reader on January 5, 2006, reported that her husband Mike: "is a semiretired corporate securities lawyer from the influential L.A. law firm of Gibson, Dunn & Crutcher, was on the board of Jack in the Box." I would imagine he would know the right Californai industry to invest in with his wife rubbing shoulders with decision makers on the inside in Sacramento.

It is interesting that he was once on the board of Jack in the Box. What an incestuous little group the San Diego political/business set is.
Lynn Schenk, Governor Davis' chief of staff during the energy crisis, once fell out with former San Diego Mayor Susan Golding, over another good catch (at the time), Jack in the Box millionaire Richard Silberman. They later made up when Golding divorced Silberman (the moment he was thrown in the pokey for money laundering). He has kept a low profile ever since. Political women can be dangerous for your health.

The last thing this crowd would want is a nosey City Attorney like Mike Aguirre asking questions on behalf of the people of San Diego about the public purse. Perhaps another ex-Sacramento pol like Goldsmith would have a better "understanding" of how the public money game is played.

Or maybe Alpert and Goldsmith just have a fixation about ferrets. On September 30, 2004 the Union-Tribune reported how Governor Schwarzenegger had vetoed Alpert's ferret bill: "The legislation, SB 89 by Sen. Dede Alpert, D-San Diego, would have granted amnesty under limited conditions to ferrets already in California." But unlike Goldsmith's 1994 ferret amnesty bill, declared "deader than that thing on your head" by former Assembly Speaker Willie Brown (referring to Goldsmith's new hairpiece) Ms. Alpert declared that she and the ferrets "would be back'.

So maybe it is the ferrets, but I think it's big money. There are only two kinds of politicians: those who have big money backers and those who wish they had. Alpert belongs to the former and Goldsmith the later. But that will all change if Goldsmith gets control of the City Attorney's office.

Armed with business cards reading Ellison Wilson Advocacy, LLC, and
Nielsen, Merksamer, Parrinello, Mueller & Naylor, LLP respectively (and packing lots of client money), Wadie and Dede would be frequent visitors to the 16th floor corner office now occupied by Mike Aguirre.

  Dede Alpert would drop in to make sure that Tom Shepard's client, Poseidon, is getting fair (legal) play. The Republican establishment favor a private desalination plant over a public reclamation plant favored by Aguirre.
Hence the "Toilet-to-Tap" name for reclamation and the glittering promos for desalination. That's why Shepard gets the big bucks and Aguirre has to go. Republican Jan Goldsmith understands "business".

San Diego's politically savvy Water Department Director Jim Barrett will explain it all.
Barrett was the commanding officer of the Navy Public Works in San Diego until August 2004. Like the Navy Broadway's current Admiral Herring he understands private contractors. He knows how the public-private money game is played. That's why Sanders hired him. In many ways San Diego County is run by retired Navy officers.

Wadie Deddeh would be dropping in on Goldsmith to discuss the John Moores and Steve Peace proposal for a transit hub as part of their Lindberg expansion proposal.
Lots of money for everybody at the airport. Politicians just love lobbyists. They are the honeybees that pollinate the political landscape. They keep everybody informed of what is going on, inside and outside government.

And of course Dede would undoubtedly be dropping by to discuss the progress of the Sunrise Power Link, particularly the SDG&E preferred route. All in a days works for busy ex-legislator lobbyists.

Remember, old politicians never die, they just become well-paid lobbyists.



Kettle calling the pot black. The Mayor's office wrote the checks. 07/29/08

                                        by Pat Flannery                           top^

Last night I attended the monthly meeting of the Coalition of Neighborhood Councils.  Mayor Jerry Sanders attended in a post Carolyn Smith charm offensive. Click here for the full video .

Sanders assured the neighborhood folk that SEDC would continue unchanged. He dismissed what had happened as due to people being in the same job for too long resulting in administrative laxity. I wish I could believe that. Here again are the facts.

His top land use official, Jim Waring, signed this Grant Deed transferring ownership of two valuable developable acres on Market Street to HarBro Construction on January 12, 2007 for a mere $300,000. That is a fact.

Two and a half weeks later, 18 days to be exact, HarBro Construction put a $3,338,800 construction loan on the property. That is a fact. Here is the Deed of Trust. Obviously the property was worth more than $3,338,800 and vastly more than $300,000. Whoever got the difference it certainly was not the people of South East San Diego. The developers got the money. That is a fact.

Whatever Mayor Sanders might now say about loose administration at SEDC being the problem, I disagree. It was more than that. The good people of South East San Diego got cheated out of $3 million on the Market St. property. How much more have they been cheated out of?

I am in favor of local control of redevelopment, not just in South East, but not like this. If you watch the video of last night's neighborhood discussion after the Mayor left it is clear that the people of South East San Diego want more control of the redevelopment dollars generated in their neighborhoods, not less. Some even suggested a locally-elected board instead of one appointed by the Mayor. Why not?

The Mayor dismissed that on the grounds that SEDC is a corporation, wholly owned by the City. Well, change it to an elected body.

It is ironic that on this very day the City Council is being asked to rule on the question of whether redevelopment dollars generated in a proposed new redevelopment project, Grantville, should be shunted to downtown. I know the answer they would get if they proposed that for South East San Diego! What is different about Grantville?

It may be that the best answer to the redevelopment conundrum is to form elected bodies in each redevelopment project. It may prove to be the best defense against the predatory practices long perfected by the developer community aided and abetted by corrupt City employees.

It is a fact that the above 2007 land deal, enriching two developers at the expense of the local community, could not have happened without the help of corrupt officials at various levels of City administration. It was not just SEDC. The Mayor's office wrote the checks. The Redevelopment Agency does not even have a bank account. It is all done at the City Comptroller's office. It is a bit of a joke to see Greg Levin ask SEDC to explain checks that his office wrote. 'Nuff said.


San Diego's own "Beverly Hillbillies". 07/25/08

                                        by Pat Flannery                           top^

An address like "177 South Beverly Hills Drive", Beverly Hills, CA 92012 is meant to impress. Right? It evokes images of swimming pools, movie stars, of undreamt new wealth for "strike-it-rich" dirt farmers like Jed Clampett and his oh-so-happy, but seriously out of place, hillbillie clan.

Well, this is the real present-day 177 South Beverly Hills Drive, corporate headquarters of Pacific Development Partners, San Diego's own "Beverly Hillbillies". It provides a classic "storefront" address for a classic financial "storefront" operation, a transit point for developer profits on their way to Carribbean tax havens.

So who are the modern Jed Clampetts of San Diego? Who are these developer/politician/city employee hillbillies who struck it rich at our expense? Unfortunately, short of invading the British Virgin Islands, we will never know. But if we ever did send the aircraft carriers down there and got a look at the names on those "offshore" banking records and corporate ownerships, I suspect we would see a lot of familiar names.

Here's how it works. The international arm of one of the Big Four accounting firms (city staffers need top notch accounting names for cover) holds a seminar for "smart" development (maybe that's where the term "smart growth" comes from). It is attended by politicians and city redevelopment personnel. After all it is the job of these staffers and politicians to attract developers. So they need to know their "needs".

Developers, politicians and city staffers come away with a clear understanding of everybody's "needs". The land deals start to roll.

The first thing the international accounting firm does is set up an underground railroad of transit-point LLCs starting in the home state, through the State of Delaware to the Aladdin's Cave - a corporation on a Caribbean Island. That's where the development profits are divvied up in the form of ownerships in a myriad of island-based corporations.

The nice thing about being a modern-day "Pirate of the Caribbean" is that you never need to leave your downtown office. Dick Murphy actually set up a fake sister city with the Irish equivalent of CCDC, Shannon Development and used his Mayor's office as its address!

It was what got me involved as a civic watchdog. I drew the line when I saw Mayor Dick Murphy and his developer cronies trying to shift their money laundering activities from the Caribbean islands to my native Ireland. I knew that Shannon Development was not a "city" but an arm of the Irish government. Like San Diego's CCDC, Ireland's Shannon Development is a shadowy, unaccountable, financial playground for insider developers and politicians. Both should be disbanded.

Coincidentally it was about this time, 2003, that Mayor Murphy appointed "Chip" Owen to the board of SEDC. Ernst & Young was the Big Four accounting firm Mayor Murphy chose for his "sister city". This article in the New York Times tells how Ernst & Young was at that time starting to sell "Ireland as an alternative to Bermuda, the Cayman Islands and Panama".

I was not terribly pleased about Murphy showing the perpetrators of dirty land deals like NTC how to take advantage of "Ireland's low corporate tax rates and favorable tax-treaty terms with the United States". I finally did manage to scuttle that little piece of financial skullduggery. It required a three year running battle with Dick Murphy. I believe it had a lot to do with his resignation. He got scared. His dirty "sister city" never did get off the ground. It is now defunct.


San Diego's own "Pirates of the Caribbean". 07/24/08

                                        by Pat Flannery                           top^

The British Virgin Islands is a favorite safe haven for modern money launderers. This ex-British colony has become home to the modern "Pirates of the Caribbean" - slick wheeler-dealers. My ongoing "follow-the-money" investigations into "Chip" Owen's dubious financial transactions with the Redevelopment Agency of San Diego has led me to a company in these balmy tropical British Virgin Islands.

"Chip" Owen had taken $400,000 of his $500,000 "profit" on the Market Street land flip in a Note and Trust Deed from the Redevelopment Agency of San Diego. Presumably he received the other $100,000 in cash. He then assigned that $400,000 Promissory Note and Trust Deed to Pacific Development Partners LLC of Beverly Hills.

Pacific Development Partners LLC then re-assigned it to Lawnec Investment Corporation, a British Virgin Islands corporation. That was on November 18, 2000. The following day, November 19, 2000, two developers, Kenneth Taylor and Tony Radovich formed a California corporation they named TayRad LLC. "Chip" Owen has admitted some association with TayRad and HarBro by abstaining from voting "on any activity involving TayRad LLC or HarBro Construction" (page 3).

Shortly thereafter, on December 10, 2000, TayRad secured an Exclusive Negotiating Agreement (ENA) from the City Council for the Market Street property. "Chip" Owen and Angela Harris (a lady who was very vocal last night in favor of retaining Carolyn Smith as SEDC President) spoke in favor of the ENA before the City Council.

On May 21, 2001, the Redevelopment Agency sold the western half of the Market Street/54 Street property to TayRad for $2.1 million. Surprisingly this did not trigger a payoff of the City's $400,000 Trust Deed (the TD secured both properties, east and west of 54th Street).

It was not until April 10, 2002 that the $400,000 Note and Trust Deed were paid off. As I said above, normally such a payoff is done in conjunction with a sale. But there was no sale in April 2002! Why did the City (RDA) agree to pay off the loan early if it had an assumption agreement with TayRad, which it must have obtained on May 21, 2001?

The Reconveyance document states that the "the obligation secured by this Deed of Trust was paid in full on 5-21-01". That would be extremely unusual. Title Companies, in this case Commonwealth Land Title, rarely fail to reconvey a Trust Deed that has been paid off.

In any case the City of San Diego wrote a check for $400,000 for the benefit of a British Virgin Islands corporation either on May 21, 2001 or on April 10, 2002 and received this reconveyance in return.

Shortly thereafter TayRad went on to sell the western half of the Market/54th Street property for $2.75 million on July 22, 2002, for a clean profit of $650,000 between May 21, 2001 and July 22, 2002, without developing the property! $650,000 of easy money.

And all this before Jim Waring did his sweethaert deal with HarBro Constructionon on the eastern half of the Market St/54 St property for a mere $300,000. At least now we have a clear "Caribbean" connection. Are there more San Diego "Pirates of the Carribean"? Probably.


We the voters? 07/21/08

                                         by Pat Flannery                           top^

Below I have created a series of graphs analysing the citywide voter registration in San Diego as of the June 3, 2008 Election.

Citywide total:

The first series of graphs shows the citywide voter registration broken down by party for each Council District and the second series breaks the same voters down by Council District for each party.

The map opposite shows the location of each Council District and below is the number of registered voters in each District.

District 1 99,147 17%
District 2 90,216 15%
District 3 68,924 12%
District 4 56,299 9%
District 5 82,243 14%
District 6 77,335 13%
District 7 70,078 12%
District 8 49,203 8%
Citywide 593,445 100%

Why do we have a Republican Mayor? What is wrong with this picture?


More to SEDC scandal than Carolyn Smith's bonus. 07/17/08

                                         by Pat Flannery                           top^

The history of two commercial lots on Market Street in South East San Diego, tells much about how the insider system works in San Diego. These particular lots were purchased by the current chairman of SEDC, Chip Owen, for $1.8 million on May 1, 2000 and resold the same day to SEDC,  for $2.3 million, an instant profit of a half million dollars. Not bad for one day's work without putting up any of his own money.

Chip Owen's secret half a million dollars profit on that day could not have happened without the cooperation of SEDC's President, Carolyn Smith. Such insider cooperation raises questions of conflict of interest, if not outright fraud, on many SEDC projects.

On January 12, 2007, the present owners of one of the Market Street lots, Har-Bro Construction Company, purchased it from SEDC for only $300,000. Jim Waring, Sanders' former staffer, signed the grant deed. Sanders will therefore be reluctant to dig into Chip Owen's land deals for fear of other dubious land deals tumbling out of the closet.

However, acting on an insider tip, the online newspaper Voice of San Diego, recently launched an investigation into certain bonus payments made to SEDC President Carolyn Smith. I suspect the tip came from Councilmember Jim Madaffer. It is well known that Madaffer wants to be the Redevelopment Czar after he is termed out on the City Council this November. The creation of this position will require the scaling back of SEDC and CCDC, even their demise. The firing of Carolyn Smith would serve nicely.

Sanders probably agrees, but has a different person in mind for the top Redevelopment job - his staffer, Janice Weinrick, who lives with her boyfriend, Lin Martin of Grub & Ellis and who happens to be the City's real estate broker. They are Sanders neighbors in Kensington.

But all Madaffer needs is one year at that $250,000 a year Redevelopment job and then Janice Weinrick, or some other faithful servant of the Mayor, can have it.

You see, city retirement is a product of years of service and final year's salary. Madaffer is not about to retire on a percentage of his Council salary. If he can quadruple his final salary, just for one year, he can quadruple his retirement for life! City employment is all about gaming the pension system. It's all they ever think about. 

So a deal will be worked out. It is how things are done in San Diego.

Aguirre's new campaign manager. 07/11/08

                                         by Pat Flannery                           top^

I had lunch today with Mike Aguirre's newly appointed campaign manager, Steve Rivera. Currently Steve is Regional Director for the 21st District of the California Democratic Party.

Mr. Rivera expressed confidence that he can get his client, Mike Aguirre, over the finishing line ahead of his Republican opponent, Jan Goldsmith, in November. Click on the picture opposite for a video of his very first interview.

By contributing one of their best and brightest to Aguirre's campaign, the Democratic Party seems to be signaling its determination to hold on to the office of San Diego City Attorney for another four years. It now looks like this non-partisan race will be very partisan indeed.

Rivera looks like an excellent choice. He is bright, articulate, with a very winning personality. If anything he seems a little shy, but that is more likely to be part of his winning personality than a lack of toughness. He assured me that he fully understands the task he is embracing. "I like a challenge" he said. I assured him that he had found one and wished him well. I asked him if he was ready to do battle with Bob Kittle and he just smiled. His opposite number, John Hoy, Goldsmith's campaign manager, is a perfect gentleman compared to "bare-knuckles" Kittle.

But this is what we have all been waiting for; let the battle for the constitutional soul of San Diego begin - the law vs. an insider elite.

A further SEDC question for Mayor Sanders. 07/11/08

                                         by Pat Flannery                           top^

First, read this "Alternative Reality" story in the Voice of San Diego today, then read today's "Oversight Needed" editorial in the Union-Tribune. It is great that these two San Diego publications are competing with each other for the next Pulitzer Price in investigative journalism.

But here's the problem. I posted a comment to the "The People's Reporters" Cafe San Diego on the Voice Tuesday July 9, 2008, which was promptly taken down after less than an hour. As you can see, Ian Trowbridge's comment # 9 remains the last comment (mine was #10).

Why did the Voice censor my comment? I started by congratulating them on discovering the irregular "bonus" payments to SEDC President Carolyn Smith. Then I suggested: "now that you have the Mayor's attention" tell him about the $500,000 profit made by Chip Owen on May 1, 2000 when he "flipped" a property to SEDC. I provided this link.

I wrote a personal email to Will Carless questioning the removal of my comment but received no reply. I find that very strange. Why would Carless and Donohue not want to investigate the much bigger scandal of a $500,000 secret profit made by current SEDC Chairman Chip Owen? My hat is off to the Voice for going after Smith for facilitating Owen's dubious financial shenanigans, but why stop there?

I also provided the Voice with this link. Carolyn Smith wrote this letter to Jim Waring on July 11, 2007. Apparently Waring had read my blog dated July 3, 2007 and had requested an explanation from Ms. Smith. Her July 11, 2007 letter did not explain the secret profit made by Owen nor why Waring later sold the Market Street property for $300,000.

Why in the world would the Voice of San Diego pull back on its investigation of Owen? Is it OK to go after a staff person, Carolyn Smith, but not her powerful boss, the SEDC Chairman Chip Owen?

I think both the Voice of San Diego and the Union-Tribune should stop their petty journalistic squabbling and discover the truth about what is going on at the South East Development Corporation (SEDC). Now that they have the Mayor's (and the public's) attention, they should pursue this story with all the resources at their disposal.

Chip Owen, or any insider, should not have been allowed to make a secret profit of $500,000. Jim Waring should not have been allowed to sell 2.09 acres of developable city land for less than the price of a one bedroom condo. I will await the Mayor's explanation, even if the Voice of San Diego, "now that they have his attention", refuse to ask him.

The real political battle is: city services vs. city pensions. 07/09/08

                                          by Pat Flannery                           top^

I went to the regular monthly meeting of the Democratic Party last night that endorsed Mike Aguirre for City Attorney.

Click on the photo opposite for a video interview with Mike immediately after he received this important enorsement. Addressing the meeting before the vote was taken, Aguirre spoke passionately about "what is best for San Diego".

He said: "my opponent has spent a lifetime speaking, voting and working against what we care about. He opposed equal rights, wage earner rights and a woman's right to choose."

That seemed to hit a chord with the audience. Three people spoke in favor of Mike's endorsement. Nobody spoke in opposition. The vote was unanimous by a show of hands. Not one hand went up in opposition.

The local Democratic Party now seems to be united with Aguirre in what they both "care about". This is good news for those of us who care about "citizen rights". San Diego has a long history of rule by privileged insiders. Perhaps now the emphasis will be on "citizen rights" instead of "developer entitlements" and "pension rights".

One set of "privileged insiders" that did not turn up to protest Aguirre's endorsement last night was the city employee unions. They lost their long-time champion, Scott Peters, in the June primary election, in which the city unions were undoubtedly the biggest losers. Now the fight is between the left and the right: Aguirre vs. Goldsmith. An Aguirre/Peters contest would have been: the left vs. a pseudo-left.

Much will now depend on Lorena Gonzalez, leader of the San Diego-Imperial Counties Labor Council. Will she allow the San Diego City employee unions' tail to continue to wag the Labor Council dog? Only the firefighters IAFF Local 145 and AFSCME Local 127 belong to the Labor Council. The main bulk of City employees, represented by the MEA and POA, do not belong to the Labor Council. Why then does Gonzalez allow them such influence? They are not even paying into her organization! Maybe that will change now. It should.

If what "we care about" vs. what "they care about" comes to define the city elections in November, then it should be a nice clean fight between insider privileges vs. city services. Goldsmith is the champion of the insiders and Aguirre is the champion of the outsiders.

The defining moment will come when Lorena Gonzalez decides whether her Labor Council represents the insiders, the MEA, or the city taxpayers who look to the MEA membership for city services. Then the real political battle, city services vs. city pensions, will be joined.

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