Shortly after Mayor
Sanders pressured the SEDC board to fire its CEO, Carolyn Smith, on July 23, 2008, he faced a "town hall"
meeting of South East San Diego residents on July 28,
2008, organized by
the The Coalition
of Neighborhood Councils
(CNC) at the
Multicultural Center (TCMC).
I videoed the event as "City Hall TV" (a name I was
toying with at the time). In it Sanders makes his case
for retaining SEDC and CCDC.
video excerpts address the basic question still
hanging over SEDC and CCDC:
are city-owned corporations the best way to administer
his support for the continued use of these corporations.
He told residents that SEDC and CCDC are "businesses" and
that these corporations need "very specific expertise"
and that he didn't see "how an election would help"
because, he explained: "I expect my appointees to
carry my point of view forward".
He referred to these two city-owned corporations as "agencies"
and suggested that if they did not
exist, blighted communities like South East San Diego
would only retain 17% of their property taxes instead of
100%. His actual words
were: "if all of a sudden you break the structure you
stop getting 100 cents on the dollar". That is
actually not true. A corporate structure is not
necessary to retain redevelopment tax dollars.
The reason Sanders and his backers are anxious to retain
a corporate structure is clear from
what has happened in the past. San Diego redevelopment
administration has been tightly controlled by developers
like Fred Mass at CCDC and Artie Owen at SEDC. The
following is an account of what happened at 5335 and 5412
In May 2000 a senior official of the San Diego
Redevelopment Agency (RDA), Deputy Director Todd Hooks,
signed off on a land deal that made a gift of $500,000
to businessman Artie Owen, who later became Chairman of
the Board of SEDC. Is this the kind of "specific
expertise" Sanders had in mind when he stood before the
citizens of South East San Diego and defended a
"business" structure for redevelopment?
Todd Hooks was
born and raised in Monrovia, California and
worked 5 years for the San Diego Redevelopment
He left in 2004 to "pursue
real estate development opportunities" for the
Agua Caliente Band of Cahuilla Indians.
He now lives in this gated community off
Gerald Ford Drive and is the immediate past
president of the Palm Springs Chamber of
On April 19, 2000 then Deputy RDA Director Mr. Hooks
signed this "Double
Escrow Disclosure" on behalf of the City,
indemnifying and holding harmless Commonwealth Title in
a transaction that clearly did not pass the smell test.
The title company wanted protection against
participating in a real estate transaction where City
money was being used by Artie Owen to "purchase" 5335
and 5412 Market Street and simultaneously "sell" it
to the city in what is known as a "double escrow".
The result was a gift of public funds to
"businessman" Artie Owen.
Using citizens' rights under the Public Records Act I
decided to check into how the city was able to convince
the mainstream media that Mr. Owen was entitled to that
$500,000 "profit". The Voice of San Diego for example
has repeatedly thrashed my assertion that it was an
illegal gift of public money. They went after Carolyn
I believe that Carolyn Smith was a sacrificial
lamb to protect bigger fish that the media are afraid to
touch. Here are the facts of the Market Street case,
judge for yourself.
The earliest document I was able to find in the city's
this letter from Artie Owen to Carolyn Smith dated
September 3, 1999. He followed up on September 15, 1999
with a draft of the
purchase contract he intended to use in the
transaction. It clearly described him as the owner of
the property. But he was not the owner and
both Smith and Hooks knew it. Here is the
Preliminary Title Report they received dated
September 8, 1999 showing the real owner
to be Federated Industries Inc, an Illinois Corporation.
On October 22, 1999 Smith docketed a request for action
as instructed by Artie Owen in his letter dated
September 3, 1999. Here is her
Report to the City Council meeting as the
Redevelopment Agency on October 26, 1999 at which they
approved the Market Street purchase as it was presented
to them. It falsely asserted that Artie Owen was
the seller. That Report undertook to do due
diligence and "ownership research" that would be
"satisfactory to the Agency". The person who would sign
off on that "research" as being "satisfactory" was the
Deputy RDA Director, Todd Hooks.
Resolution was passed and approved by the City
Attorney, Casey Gwinn. It was fraudulent on its face. It
authorized the RDA to purchase a property from an
"owner" that did not own the property. The
really bad part is that everybody involved knew it, but
said nothing. Such is the culture of dishonesty that
pervades this City.
purchase contract that ever existed for this
transaction was between the RDA and Artie Owen, showing
him as the "Seller". The fact that the real owner was an
Illinois Corporation, Federated Industries Inc, was
never even mentioned (except of course in the title
company's official title report). Nobody at the City or
Owen even pretended that he was acting as an agent of
Federated or that he had a prior option to purchase the
property at a lower price. They simply misrepresented
the property's ownership and did the deal.
It is interesting to note that in answering my public
records requests, Casey Gwinn's former Executive
Leslie Devaney, who narrowly missed defeating Mike
Aguirre for City Attorney in 2004, was being copied with
my email correspondence. Does she have some "special
knowledge" in this area, that requires the current City
Attorney Jan Goldsmith to hire her as a watchdog on
In the overall city budget somebody stealing $500,000 is
not going to break the bank. But the fact that our city
staff, including our current City Auditor, so readily
accept somebody receiving a $500,000 gift of public
funds, for no apparent reason other than that he was
politically well connected, is very disturbing. The fact
remains that on May 1, 2000 a Deputy RDA Director, Todd
Hooks, signed a $400,000
Deed of Trust in favor of Artie Owen as part of the
purchase price of a property he did not own. The
beneficial interest in that $400,000 Note was then
moved offshore to the British Virgin Islands.
The fact remains that the City Comptroller sent a check
for $433,841.10 to the British Virgin Islands tax haven
on May 22, 2001. The
payoff included the interest accrued from the note's
creation on May 1, 2000 until the City's sale of part of
the secured property, 5335 Market Street, to TayRad
Construction required the payoff on May 22, 2001.
Is this the kind of "special expertise" Sanders sees as
necessary for redevelopment in San Diego? Does he think
that this is the price we must pay to get "high caliber"
private developers, like Artie Owen, to "invest" in our
The wife of real estate fraudster Jim McConville filed
for personal bankruptcy yesterday. Here is the
court document. It is a petition to wipe out between
$1 million and $10 million in "mainly business debt" to
between 100 and 199 creditors. 18 pages of the document
are devoted to listing her many creditors a meeting of
whom is scheduled for January 6, 2010. Maybe the
creditors should sell the rights to some reality TV show
or maybe Jim has already done so. It should be quite a
The private creditors will be angry because they know
that McConville put all the scam real estate in his
daughter's name or a company owned by her and put all the
fast cars and art collection in his own name.
The banks, developers, mortgage brokers and attorneys
don't care. McConville put millions of dollars in their
pockets. He was a one-man real estate bubble. Their hats
are off to him. It was private investors like Andy Narraway who got burned. The bankers made a killing.
Today, Mayor Sanders laid
before the City Council his "last, best and
final offer" to the unions for Managed Competition
After 40 negotiation sessions with Local 127 and
33 sessions with the MEA, over three years, he finally declared an impasse on
By law a labor impasse must be resolved by the City
Council. So they dutifully listened to long
presentations from the Mayor's negotiating team and from
representatives of the MEA and Local 127. (The safety
unions, police and fire, are exempt from Managed
Mike Zuchett made the case for the MEA.
Mike addressed broader policy issues relating to
Managed Competition, like who is asking for real
competition and who is asking for a rigged
system? Is the City trying to achieve savings by
eliminating health care?
He strongly rejected the Mayor's assertion that
the MEA has stonewalled the process. He said
that while the MEA is willing to test and defend
its slogan that "Nobody does it better", he
believes the process is a complete waste of time
Joan Raymond represented Local 127, the blue collar
the Mayor for having wasted millions of taxpayer
dollars defending his "illegal position" and
that it took a judge and a failed legal
challenge to bring him to the negotiating table.
She further claimed that he has now done an
about-turn on health care in the middle of an
Health care seems to have become the pivotal
issue on Managed Competition.
Gloria then read the well-orchestrated motion - these things are worked out by the chiefs of
staff well in advance.
Todd made the motion:
"the Council has determined
not to impose the Mayor's last, best and final offer at
this time, that the City's negotiating team return to
the table and that the Council convene in closed session
to give direction to the City's negotiating team, with
such direction to be stayed until completion of the
Mayoral veto process".
Councilmember Emerald then seconded the motion.
final vote broke along party lines, no Democrat daring
to challenge union power.
With that kind of organized opposition the Mayor knows
very well that he will never be able to implement
Managed Competition "by agreement" with the unions.
City Attorney Jan Goldstone, has already provided the
answer - if Sanders has the courage to take it.
According to this
legal opinion dated October 8, 2009, under the
current strong mayor form of government Sanders
does not have to negotiate with the unions in order to
implement managed competition. Goldsmith
explains: "Section 117(c) does not mandate that the
Mayor solicit proposals from City departments before
He goes on to explain that outsourcing is in compliance
with state collective bargaining laws
provided certain safeguards are followed
e.g. "the City must provide notice to the affected
employee organization and [be given an] opportunity to
negotiate prior to the decision to contract out the
That's clear enough - from the elected City Attorney.
If this Mayor is serious about implementing managed
competition and/or business process re-engineering, he
should get on with it. Blaming the unions
and City Council is wearing a little thin.
Port Commissioner Lee Burdick wrote an
op-ed piece in the Union-Tribune today. I posted a
comment there only to have it taken down by the U-T. I
guess it was too "mean" for the tender ears of Ms.
Here, you be the judge:
"Spoken like the true corporate lobbyist that she is,
from her time as government affairs lawyer (that's what
lobbyists prefer to call themselves) for Jimsair, to her
present job with lobbyist/law firm Higgs, Fletcher &
Mack, where according to
its website she "recently helped a local winery
overcome Riverside County land use regulations to
establish an approved vineyard plot and planting plan."
Note the word "overcome".
lobbyists successfully engineered her appointment to the
Port Commission to help the Port District "overcome"
California land use regulations such as CEQA in the Port
District's North Embarcadero Visionary Plan.
At the time of her appointment she admitted that she
knew very little about Port District issues but promised
to listen. Yes, but to whom? My concern is that as a
veteran corporate lobbyist she will listen more to
Carnival Cruise Lines, than to "mean" bloggers like me
who happen to care about the waterfront."
That was my comment. Who does this woman represent that
it gives her such power at the Union-Tribune? I reached
her on the telephone later. She fully condoned the U-T
censorship. She said the reason the U-T removed my
comment was because it was "offensive". Offensive to
whom? I have no doubt it was "offensive" to Cardinal
Cruise Lines. Does she represent them?
I asked how her problem with the independence of blogs
comports with the following sentiments in her op-ed
piece: "So I vow to listen more and to speak less. I
will seek to understand others before I try to impose my
understanding on them." When she had finished her
lecture on blogs, our conversation was over. So much for
being a good listener.
It seems corporate interests have another puppet on the
Port Commission. The U-T's action today, once again,
gave positive proof that corporate interests dictate its
editorial policy. After all, corporations like Carnival
Cruise Lines advertize in "newspapers".