Early next year, the California Supreme Court will decide whether the state can abolish or weaken redevelopment agencies. If the City of Escondido is lucky, the high court’s decision will thwart the City’s dubious plan to build a $50 million ballpark for the Padres’ AAA minor league team.
The court will rule whether the state can eliminate the agencies altogether or let cities keep the agencies if they share revenues with schools and special districts. Either way, financially ailing Escondido may well have to scrap the scheme to subsidize the Padres, although city manager Clay Phillips will only say, “It’s problematic.” If the high court rules against the state, thus permitting cities to keep their redevelopment money, Escondido intends to go ahead with the fat subsidy to the Padres.
Whatever happens, Escondido should concentrate on tightening its apparently loose conflict-of-interest rules.
For example, the City hired a lawyer who would represent its interests in negotiations with the Padres. Whom did Escondido hire? None other than Charles Black, former president and chief operating officer of the Padres and former executive vice president of JMI Realty, controlled by John Moores, who once had overwhelming ownership of the Padres. Black spearheaded the Petco Park development team for the Padres, who had wangled a $300 million subsidy from the City of San Diego.
Says Roy Garrett, civic activist who opposes the giveaway to the Padres, “Is [Black] working for the benefit of his old employer to whom he had fiduciary duties and undoubtedly about whom he had a lot of nonpublic proprietary information? Or is he using that information to benefit us? In either case, it seems like he has problems.”
Says Ed Gallo, councilmember who opposes the project, “I wouldn’t select [Black] to represent us. Even though he may try to be impartial, always in the back of his mind he would have an allegiance to his former employer.”
Black says he left the Padres board in 2005 and departed JMI the next year. “Those relationships were in the past,” he says, noting that the Escondido city manager addressed those issues before hiring him.
“[Black] is one of several negotiators. He has plenty of people looking over his shoulder,” says Jeffrey Epp, city attorney.
There is a second potential problem. Mayor Sam Abed owns property near the proposed ballpark area. Abed has stated that if the ballpark deal falls through, Escondido should put a technology business park at the location. The whole idea of the ballpark project is to stimulate economic development and raise real estate values (even though objective economists say pro sports facilities don’t stimulate surrounding economies).
Abed’s properties are 1250 and 1270 feet from the project, says Epp. The California Fair Political Practices Commission looked at the situation and said Abed could vote on the ballpark project, says Epp.
Garrett says the distance from one property is only 780 feet; technically, Abed should be in the clear. But, points out Garrett, the ballpark district is “right across the street from [Abed’s] property. The value of that land will be significantly and rapidly affected by decisions made about the district. Even if [Abed’s] property is outside the technical limits, I don’t think he is outside the ethical limits, considering that we are talking about $50 million of taxpayer money.”
Councilmember Gallo rushes to defend Abed: “Sam is very conscious about his property: if he has an inkling [of conflict] he recuses himself.”
Garrett also says that Escondido spent $6.3 million for land within the ballpark zone without an appraisal. The City concedes that there was no appraisal per se, but an allegedly reliable third party provided comparable values.
Throughout the process, the council has been meeting in closed session on the ballpark proposal. “The main problem for the public is the high level of secrecy regarding all of these negotiations, and the almost certain prospect that the ballpark build-out and lease agreement will be foisted on the City of Escondido with about one week’s notice, and there will be a hearing which will allow people between two and three minutes to express their opinions,” says Garrett. He, along with other opponents, is especially irate that the Padres propose to put very little into the project.
“They’re doing a lot of this stuff behind closed doors,” complains Bill Stephenson, another opponent of the ballpark subsidy.
“There have been several public meetings,” rejoins City Manager Phillips.
One of the main objections is that Escondido’s infrastructure is rotting while the council pursues legacy projects that should be financed with private money. The City does not have immediate bonding capacity and may have to issue bond anticipation notes. The problem-plagued California Center for the Arts, Escondido, has eaten up redevelopment bond capacity until 2017, should the supreme court permit redevelopment agencies to remain in place.
“There are things that need desperate attention — streets, basic infrastructure in dire condition and getting worse by the day; basic infrastructure has been ignored for 10 or 15 years,” says Stephenson. In short, Escondido is suffering from the same mindless mind-set as San Diego.
Phillips insists that Escondido’s infrastructure is in good shape.
Jeff Moorad, who is buying the Padres in increments and is chief executive officer, has asked Escondido to approve a development agreement before the supreme court hearing so that it will be ready if the court sides with the parties that want the state’s decision overturned. Moorad may sell the team if he can’t land Escondido, Padres negotiator Steve Peace told the North County Times.
Right now, the council is lined up three to two in favor of the project. But some ballpark supporters fear it’s academic. “I don’t have a good feeling about the high court’s decisions in January,” says Dick Daniels, a former councilmember and mayoral candidate, who supports a ballpark. The state set up the redevelopment agencies and can shut them down, says Daniels.
I emailed the five members of the council, including Abed, for comment, and only Gallo responded.