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JUDICIARY COMMITTEE PASSES REP. WATERS' LEGISLATION TO PROTECT PRIVATE PROPERTY OWNERS FROM EMINENT DOMAIN ABUSE—Washington, Jan 25, 2012-Yesterday, the House Judiciary Committee approved H.R. 1433, "The Private Property Rights Protection Act of 2011." Introduced by Congressman James Sensenbrenner (R-WI) and Congresswoman Maxine Waters (D-CA), the legislation is intended to protect private property owners and communities from eminent domain abuse, and restore property rights that the Supreme Court changed in the controversial case, Kelo v. City of New London. In Kelo, the Court upheld the ability of the State and Federal government to transfer privately-owned property against the wishes of the owner to a large corporation, declaring that the resulting economic development would produce benefits to the community.

The Court's ruling raised serious concerns that the government could use its power to seize private property from individual private citizens for the benefit of more powerful, better connected, wealthier private parties. The case sparked widespread outrage and resulted in unlikely political alliances of both conservative Republicans – concerned about case's constitutional implications and impact on due process – and progressive Democrats, who decried eminent domain abuse among local governments and private developers who systematically used the law to uproot vulnerable Americans from their homes and communities.

"Unfortunately, economic development condemnations have all too often been used by powerful interest groups to acquire land at the expense of the poor and politically weak," Rep. Waters said. "And few policies have done more to destroy communities and opportunities for minorities than eminent domain. Some 3 to 4 million Americans, most of them ethnic minorities, have been forcibly displaced from their homes as a result of urban renewal takings since World War II. While eminent domain has always had a disproportionate impact on the constitutional rights of minorities, most of the public didn't notice the alarming trends until the Supreme Court's controversial ruling."

The Private Property Rights Protection Act of 2011 will restore the property rights of all Americans and prevent the federal government or any authority of the federal government from using economic development as a justification for exercising its power of eminent domain. The bill will also discourage states and localities from abusing their eminent domain power by denying states or localities that commit such abuse all federal economic development funds for a period of two years.

"The legislation I introduced with Rep. Sensenbrenner restores fairness and protects every American citizen from being deprived of a fundamental right by a powerful government," Rep Waters explained. "As a progressive Democrat, while I do not always agree with Congressman Sensenbrenner, who is a conservative Republican, we both feel very strongly about the principles at stake. The abuse of eminent domain at the expense of individual property owners is not what our founders intended."

Although 44 states have enacted new laws limiting eminent domain power in the years since Kelo, many of the new laws contain loopholes that make them easy to circumvent. For example, 19 states have forbidden takings for "economic development" but continue to permit the exact same kinds of condemnations under the guise of alleviating blight. These laws define blight so broadly that properties in any number of neighborhoods could be subject to condemnation.

"One of the basic Constitutional functions of American government is the protection of private property rights," Rep. Waters stated. "H.R. 1433 will protect homes, communities, churches, and other privately-owned property from predatory takings under the guise of 'economic development.' Private developers and local governments that have a genuine project should be able to acquire the land or property they need through legitimate, voluntary purchases. If the project really is more valuable than the current use of the same land, then they should be willing to negotiate with property owners who are willing to sell. Otherwise, the federal government must protect the rights of private property owners to be secure in their own homes and communities."

Congresswoman Waters and Congressman Sensenbrenner introduced this legislation as H.R. 1855 during the 111th Congress; H.R. 3053 during the 110th Congress; and both bills is substantially similar to H.R. 4128, legislation that passed the House in the 109th Congress by an overwhelming vote of 376-38 but was never enacted.

The latest UT poll regarding the Balboa Park redevelopment plan.
Consider This:
The 798 space garage will all be PAID parking. The fee is proposed to be $5.00 but the parking structure has already been studied and shown to be insufficient to pay the proposed bonds meaning it will have to increase the cost of parking, and we predict will be like most of downtown paid parking in increments of dollars per 15 or 20 minutes.
Existing free spaces will be removed. The net result from the construction of a multi-million dollar garage will be a significant DECREASE in available free parking.
The TOTAL net new spaces will be 260. However, 100 of those will be reserved for expensive Valet parking. Only a net increase of 160 spaces with the cost to the Park irreparable.
Parking structures are inherently noisy, especially with some sides of the structure being open air.
There are many good places to put a parking structure. Directly abutting and behind the Spreckles Organ Pavilion is not one of them. This will have a severe impact on concerts at the organ pavilion. And the free concerts at the park will cease to be free as all parking in the park becomes paid parking to support the cost of this parking structure.

California Refuses to Accept Obama’s Banking Sellout
Nov 10, 2011, By Robert Scheer
Click Article

City Council Shut-down:
City Council Session Shut-down by Citizens Demanding Constitutional Rights in San Diego
By Rocky Neptun, San Diego Indy Media
Tuesday, Oct 25: After spending almost an hour discussing an illegal scheme to transfer even more wealth to downtown hotel owners using taxpayers' money; the San Diego City Council literally turned tail and ran from the council chambers when a coalition of community groups joined the Occupy San Diego movement in asking council members to support their rights to free speech and assembly within the city.

About 60 citizens marched from Children's Park just before the 10 a.m. Council session and met up with the several hundred young people camped at the Civic Center Plaza. Ignoring the police demands to stay on the sidewalk, protestors took to the streets the entire route.

Michelle Deutsch, a young woman who was brutally pepper sprayed by an out-of-control police officer on October 14 in retaliation after she had just concluded an interview with a CNN reporter, led a "human microphone" presentation asking that the council adopt a resolution similar to the one recently passed by the Los Angeles City Council in support of Occupy Los Angeles.

Startled and petrified, council members sat perched on their lush chairs and paneled desks high above the crowd, as Deutsch read the request, echoed by the crowd of about 75 citizens in unison voice after each sentence. The roar of words, the emotional cadence, the pure democratic spectacle of a crowd shouting up at these eight puppets of power and wealth was exhilarating. Council President Young looked worried, he had lost his control, his commands could not be heard; while the conservative members almost panicked, terror in their eyes, "is this the future, where the people actually rule" you could almost hear them think. The seven policemen in the chambers just looked at one another, dumbfounded, leaderless, having to endure the assembled citizens' thunderous demands – as did city staff.

Deutsch, read the appeals, echoed by the crowd, their words bouncing off the walls, "we request that you respect and uphold our rights under the First Amendment," they shouted. "You took an oath to uphold the Constitution," the citizens reminded councilmembers.

"Please endorse our peaceful protest action against undue corporate and monetary influence on our government," they asked, "the Los Angeles City Council adopted a resolution supporting the LA Protest, we want the same respect here and from you."

Then the group representing Occupy San Diego informed the council that "if you do not place it [a resolution of support] on your agenda, we will accept this as consent to our protest and make our plans based on our Constitutional rights." The protesters vowed to continue to "occupy" the civic center plaza and Children's Park. "We will continue to have a medical tent, food, educational materials and media support," they said.

After communal voice was given to the request, remembering that this was there second visit to the council meeting to try and get the resolution on the agenda; the frustration of having to fight for their Constitutional rights here in the 21st Century, in front of this political front for San Diego's oligarchy, burst forth as the crowd erupted into a chant, "Endorse!, Endorse!, Endorse!" and council members freaked, almost tripping over their staff members seated behind them , as they ran for the exit.

Council members nervously reconvened in the afternoon, but not until the San Diego Police Department had staged over 30 police officers in patrol cars, 10 motorcycle cops, a paddy wagon and riot gear vans two blocks away, at Third and Ash. In addition, Deputy Police Chief Boyd Long, the city's top demonstration/riot control cop, personally took control of the chamber officers to protect council members from the voices of the people.

Only about 30 Occupy folks returned for the afternoon session, while the council relegated the rest of public comment to the end of the afternoon session, allowing the horde of well-paid lobbyists and attorneys who were well-suited, glancing at Rolexes, clutching briefcases full of papers outlining special requests for their wealthy clients to proceed with their power games – the corrupt system of politics continued, protected by the armed might of "America's Finest." The citizen's group was ignored by all eight council members; like an addict overlooks the actuality of his sickness.

As I left the council chambers, the lyrics from one of Patti Smith's protest songs, kept repeating itself in my head, "I awakened to the cry that the people have the power; the power to dream, to rule – to wrestle the world from fools."

Balboa Park Parking— Fledgling plans to remodel Balboa Park have run into a snag: San Diego Zoo officials say the plans wouldn't provide enough new parking, which puts a cap on how many people can go to the zoo and the other park attractions. There's talk of building a parking structure south of the organ pavilion and reverting the parking area south of the art museum back to pedestrians. But, zoo officials write, "We question the wisdom of spending $39 million for a net gain of only 272 parking spaces."There is another plan in the works. For now, columnist Scott Lewis writes, "It will take quite a bit of leadership in coming months to either effectively ignore those concerns or incorporate them into the vision the public's been offered about a true gathering spot in the park's heart."

A lawsuit by Nancy and Derek Casady, represented by Mike Aguirre.
Whistle Blower Suit Claims Fraud in A.I.G. Bailout
Claiming Fraud in A.I.G. Bailout, Whistle-Blower Lawsuit Names 3 Companies
By MARY WILLIAMS WALSH, NEW YORK TIMES, May 4, 2011— The first known whistle-blower lawsuit to assert that the taxpayers were defrauded when the federal government bailed out the American International Group was unsealed on Friday, joining a number of suits seeking to settle the score on losses related to the financial crisis of 2008.
The lawsuit, filed by a pair of veteran political activists from the La Jolla area of San Diego, asserts that A.I.G. and two large banks engaged in a variety of fraudulent and speculative transactions, running up losses well into the billions of dollars. Then the three institutions persuaded the Federal Reserve Bank of New York to bail them out by giving A.I.G. two rescue loans, which were used to unwind hundreds of failed trades.
The loans were improper, the lawsuit says, because the Fed made them without getting a pledge of high-quality collateral from A.I.G., as required by law.
“To cover losses of those engaged in fraudulent financial transactions is an authority not yet given to the Fed board,” said the plaintiffs, Derek and Nancy Casady, in their complaint, filed in Federal District Court for the Southern District of California.
The lawsuit names A.I.G., Goldman Sachs and Deutsche Bank as defendants, but not the Fed.
Senior Fed officials have stated repeatedly that they had to take unusual steps in 2008 because the global financial system was close to breaking down. The Casadys’ lawyer, Michael J. Aguirre, argued that even so, the Fed was required to comply with its own governing statutes. He said that when the Fed bailed out a nonbank, it was required to secure the loan with the same liquid, high-quality collateral it required when lending to a troubled bank.Full Article 

CALIFORNIA VICTORY AGAINST EMINENT DOMAIN ABUSE
National City Violated Federal Constitution and State LawsApril 22, 2011,National City, Calif.—A California gym that mentors at-risk kids scored a knockout legal blow against eminent domain abuse in California. Yesterday, April 21, Judge Steven R. Denton of the Superior Court of California ruled in favor of the Community Youth Athletic Center (CYAC) and against National City, Calif., in one of the most important property rights cases in the nation. Carlos Barragan, Jr., who along with his father created the CYAC as a means of keeping local at-risk kids out of gangs, will join with other CYAC leaders at the gym at 10:30 a.m. California time to discuss the ruling with the media. The gym is located at 1018 National City Blvd., National City, Calif.

The Court struck down National City's entire 692-property eminent domain zone in the first decision to apply the legal reforms that California enacted to counter the disastrous U.S. Supreme Court Kelo decision in 2005. This ruling, which found that National City lacked a legal basis for its blight declaration, reinforces vital protections for property owners across the state, and underscores why redevelopment agencies should be abolished.

The Court also ruled that National City violated the Due Process clause of the U.S. Constitution in failing to provide the CYAC with statutorily required information prior to an important public hearing.

Finally, in a holding with implications well beyond redevelopment law, the Court also held that when the government retains a private consultant to perform government functions—in this case, documenting the existence of alleged "blight" in National City—documents that the private consultant produces are public records subject to disclosure under the California Public Records Act. The Court also set a clear standard for what government agencies have to do in searching the records of their private consultants in response to a Public Records Act request.

VIDEO: This 3-minute video spotlights this fight.

"After Kelo, the California Legislature limited a city's ability to declare 'blight' based on trivial things like 'lack of parking' and required real evidence and documentation from redevelopment agencies," said Dana Berliner, a senior attorney with the Institute for Justice, which represented the CYAC for free. "National City completely ignored the new law when it decided to threaten the CYAC and nearly 700 other properties with eminent domain for private development. The Court's decision holds that the new law placed real restrictions on redevelopment agencies and that National City violated the law. This is the very first case interpreting the changes to the law that went into effect on January 1, 2007, in response to the Kelo decision."

Berliner said, "This decision will go a long way in protecting Californians throughout the state against eminent domain abuse."

Clemente Casillas, the CYAC President, said, "I hope National City does the right thing now and throws in the towel so we can get back to focusing all our attention on helping to grow the kids in our community. The city can have redevelopment, but that has to be done through private negotiation, not by government force."

IJ Senior Attorney Jeff Rowes said, "Redevelopment agencies always use private consultants to come up with blight studies. The Court ruled that the documents and data produced by those consultants are public records, just like government-produced documents. That ruling will help everyone trying to fight a blight designation of their neighborhood, and it will also help the media and anyone else trying to get more information about government projects. We've been saying for years that the city's blight study lacked any information the CYAC needed to do a meaningful review. The court agreed, saying it was mostly jargon and that the city should have given the CYAC more time and continued the public hearing when the CYAC requested it."

California Governor Jerry Brown has proposed eliminating local redevelopment agencies across the state. These agencies, which are run by the cities they reside in, have taken properties they didn't own only to hand that land over to those with more political power. They have driven city after city in California to the brink of bankruptcy, often for nothing more than private gain.

"National City has been labeling this area blighted since the 1960s," said Rowes. "This decision provides another example of a redevelopment agency that is out of control and should be abolished."

The CYAC got almost everything it asked for in this lawsuit. The Court invalidated the city's redevelopment plan amendment that authorized eminent domain, declared that the city violated the Public Records Act, declared that the city violated the CYAC's due process rights, and gave the CYAC nominal damages. The CYAC is finally free from the threat of eminent domain for the first time in nearly four years.

Tax Shell Game: The Taxpayer Cost of Offshore Corporate Havens
  Many of the largest corporations in our country hide profits made in the United States in offshore shell companies and sham headquarters in order to avoid paying billions in federal taxes. The result is massive losses in revenue for the U.S. Treasury – which ultimately must be made up by taxpayers.  The debt of a few is transferred to many – and to future generations.
  The U.S. Senate confirmed in the recently-passed fiscal year 2010 budget resolution that the use of offshore tax havens by large corporations “means that honest taxpayers face a higher burden.”  
  Key Findings include:
• The cost to taxpayers due to the use of offshore tax havens is as high as $100 billion per year - $1 trillion over 10 years. U.S.-based individuals and corporations who pay taxes on their revenues must shoulder this burden for those who do not.
• Taxpayers must shoulder the burden – U.S. PIRG Education Fund calculated each state’s taxpayer contribution proportional to their yearly federal contribution to make up for the $100 billion lost (See Figure 1). taxshellgamefinalreport_national.pdf

The building industry that overbuilt in San Diego is asking for more of the same entitlements and fast tracking that helped cause the problem of the housing market falling apart. They still spout the need for work force housing when there are now plenty of homes on the market in that price range.

For the second consecutive month residential building permits hit record low
By JEN LEBRON KUHNEY, The Daily Transcript,  March 25, 2009
New construction permits for residential housing in San Diego County were at a record low for the second month straight, according to a report from the Construction Industry Research Board (CIRB).
 "Throughout the county, 86 condos, apartments and homes were authorized in February; one more than January and 329 less than February 2008.
 "The reason we're not pulling more permits than record low is because most projects don't pencil out," said Borre Winckel, chief executive of the San Diego County Building Industry Association.
 "The fact of the matter is that there are many homes for sale... that are selling at prices that are less than new construction costs of a new house," Winckel said.
 This year, there have been fewer permits issues year to date than any other in the past decade.
 So far in 2009, only 173 permits for residential units have been issued compared to 738 during the same two months in 2008.
 The highest number of permits issued during January and February was in 2003, when there were 3,382 issued, or 1855 percent greater than 2009.
 California has seen a similar downturn in activity with a total of 2,298 building permits issued throughout the state in February 2009.
 This number is up 14.9 percent from January, but down 66.5 percent from February 2008.
 The CIRB predicts a total of 50,000 permits will be issued throughout the state this year, which is less than half of the number issued in 2007 and a quarter of the number issued in 2005.
 Last year, California hit an all-time low in how many permits it issued, with 64,752. Records date back to 1954.
 Winckel said local governments need to work with builders for a complete overhaul of the permitting process that would include speeding up processing and lowering fees.
Only with cooperation from local governments will homebuilders be able to meet the demand in San Diego, Winckel said.
 " San Diego never overbuilt," he said.
 "The housing recovery will be led by very modest square footage home size on smaller lots. So there is plenty of housing demand," Winckel said. "There is a demand for workforce housing."
 A Commerce Department report Wednesday showed new home sales throughout the country rose 4.7 percent in February -- the fastest increase since April 2008.
 However, Winckel said half of those sales in California are properties on which the builders foreclosed.
 New home sales across the country are down 41 percent from February 2008.

ocal OB Family Donates Nearly $13,000 to the Ocean Beach Branch Library 
By Frank Gormlie on January 17th, 2009 A Fall Friday afternoon inside the OB Library. (Frank Gormlie)OCEAN BEACH, CA.  The Ocean Beach branch Library has no better friends than Dorothy Shumway and her family.  Over the past year, this long-time OB family donated nearly $13,000 to the OB Branch of the San Diego Public Library. Dorothy Shumway, now 83,  and her family wrote checks that totaled $12,900 at two different times during 2008, and sent them to the San Diego Public Library Foundation ear-marked for our local branch.  This incredible act of generosity by one family in support of the Ocean Library, particularly since the branch has just fought a successful, if temporary, battle to keep its doors open, does need to be recognized by the broader community. Full Article

Home prices fall in 21 cities, San Diego 3rd
BY KATHLEEN M. HOWLEY, Bloomberg News, April 3, 2008
NEW YORK -- Home prices declined in 21 U.S. cities in January, led by Sacramento and Las Vegas, as banks sold foreclosed homes at bargain prices.The price per square foot in Sacramento dropped 28 percent to $166 from a year earlier, according to a report released Thursday by Radar Logic Inc., a real estate data company. Las Vegas fell 25 percent to $137 a square foot.
  San Diego was the third-worst U.S. market, with prices dropping 21 percent, and Los Angeles was fourth, with a 17 percent decline, Radar Logic said.Charlotte, N.C., saw a 3.9 percent gain in values, and New York prices rose 2 percent, the only areas to have an increase in the study of 25 U.S. cities.
  Rising foreclosures and tighter lending standards are deepening the U.S. housing slump as it enters its third year.
  The median price of a single-family existing home dropped 8.7 percent in February from a year earlier, the most in four decades of record keeping, the Chicago-based National Association of Realtors (NAR) said in a March 24 report."
 Like homebuilders who feel pressure to get rid of inventory quickly, many banks and lenders experience the same pressure when dealing with homes from foreclosure," and decide to sell at below-market prices, the report said. That leads to further declines in real estate values.U.S. mortgage foreclosures rose to an all-time high at the end of 2007, the Mortgage Bankers Association (MBA) said in a March 6 report.
  New foreclosures jumped to 0.83 percent of all home loans in the fourth quarter from 0.54 percent a year earlier.Late payments rose to a 23-year high, according to the MBA's report.
  The national vacancy rate, the share of empty houses for sale, increased to 2.8 percent in the fourth quarter, matching 2007's first-quarter rate that was the highest in records going back to 1956, the U.S. Census Bureau reported Jan. 29.Sales of new homes in the U.S. fell in February to an annual pace of 590,000, the lowest level in 13 years, the Commerce Department said in a March 26 report.
  Radar Logic's monthly housing report tracks the 28-day aggregated value of a daily index the company compiles based on home sales.
  Using a price-per-square-foot number reduces the influence of property size when calculating price changes, the company said. The data is not seasonally adjusted

Trouble at El Cortez, In a renovated San Diego landmark, there is dysfunction among the developer and the homeowners
By KELLY BENNETT, Voice Staff Writer Monday, Jan. 14, 2008
Excerpt: The red neon letters spell EL CORTEZ when they're all working, launching a beacon from the stately white building atop its namesake hill on the edge of downtown San Diego. But when the letters are on the fritz, as they are now, they flash and blink, muddling the sign's message and portending another: all is not right with the landmark. Full Article

Editorial: Upon further review: Yes, governor was involved
Talk with interior secretary throws vote of the people in doubt
and raises a stink
Sacramento Bee, January 18, 2008
  It's no secret that Gov. Arnold Schwarzenegger supports the four Indian gambling compacts on the February ballot. After all, he negotiated the deals with four of the richest gambling tribes in the state and appears in campaign ads urging voters to vote Yes on Propositions 94, 95, 96 and 97 to ratify them. But the governor also played a key role in a curious ˆ if not suspicious ˆ series of events that may make next month's vote on the compacts moot.
 Here's what happened: After the compacts were ratified by the Legislature, they were sent to Washington, where the U.S. secretary of the interior is supposed to review and either accept or reject them. But after they arrived at Interior, the compacts were lost for 80 days. Under federal law, the secretary has 45 days to take action or Indian state gambling compacts become law automatically. Because the California compacts were lost, no review took place. When they mysteriously reappeared after the 45-day deadline had passed they were deemed approved automatically.
 Here's where the governor steps in. The compacts are not officially in effect until they are published in the Federal Register. Given the pending vote in California and the mysterious disappearance and reappearance of the California compacts, Interior Department officials initially said they would not publish them until after the California vote. But 16 days later Interior reversed course, and the compacts were published.
 It turns out that Schwarzenegger had spoken with Interior Secretary Dirk Kempthorne and asked him to publish the compacts. At an editorial board meeting with The Bee on Wednesday, when he was asked directly if he had asked Kempthorne to publish them, the governor hedged, merely saying he asked Kempthorne to give "some attention" to the matter to make sure that "everything go through procedures."
  Later, a spokesman for the governor said that Schwarzenegger had asked the secretary to publish the compacts. The governor spoke with Kempthorne on Dec. 6. The compacts were published in the Federal Register on Dec. 19.
 Why should California voters care about all this? If voters reject those four gambling deals on the ballot, Interior' decision to approve and publish them in the Federal Register creates a legal quandary.  Does federal action supersede the California vote?
 The governor must have been aware of that when he urged Kempthorne to publish the compacts. He told The Bee editorial board, "I thought if the voters did not approve it, it's gone ... but maybe you're asking me that because there is a way out of it. That will be quite interesting. I don't know."
 This is a governor who has prided himself on abiding by the will of the people. In the case of the missing gambling compacts, he has helped create a situation where the public's will can be subverted. That's bad enough, but something worse may be afoot here.
 These gambling deals are worth an estimated $50 billion. Their mysterious disappearance and reappearance reeks of incompetence, if not something worse, which is why the Interior Department's inspector general is now investigating the matter. Given his role in this bizarre series of events, the governor should be getting similar scrutiny.

U-T Takes a Hit
Voice of san Diego, E-MAIL POST
 The San Diego Union-Tribune, a local newspaper, has reported one of its largest recent circulation drops, losing 8.5 percent of its daily print readership and 7.9 percent of its Sunday print readership.
 The figures, reported today by trade magazine Editor & Publisher, outpaced the national average: a 2.5 percent daily drop and a 3.5 percent Sunday decline.
 The Union-Tribune's circulation has been dropping since 2004, when its Sunday circulation was 442,000. By March 2007, its Sunday circulation was 379,000.
 A 7.9 percent cut would leave the local newspaper's Sunday circulation at about 349,000. The exact figures will be released Monday. The Audit Bureau of Circulations will include a new way to measure newspapers' reach: The size of the paper's total audience, including online readership.
-- ROB DAVIS, Thursday, November 1

Sanders admits mistakes on Sunroad; says he took bad advice
By ELIZABETH MALLOY, The Daily Transcript, August 23, 2007
 San Diego Mayor Jerry Sanders said he took bad advice and made mistakes when it came to stopping Sunroad Enterprises from building an office tower higher than recommended, and he is hoping to implement measures to keep it from happening again.
 A week after the city‚s land use chief Jim Waring stepped down, and a day after Development Services Director Marcella Escobar-Eck left her position, Sanders reiterated his stance that he had not known of any wrongdoing throughout the Sunroad process, but admitted he was slow to act in some instances. He said he‚s learned a lot about just how much information he needs on certain issues and that he can‚t be as trusting of his employees as he‚d sometimes like.
 Sanders said the highly politicized climate of city hall didn't allow him to use the same management strategies he used at previous jobs, such as when he was chief of police in the 1990s.
 "I had a group of people around me (when I was police chief) who had been on the police department usually as long or longer than I had and I could trust their judgment, because I had known them for 20 years," he said. Obviously, that has not worked as well for me over here.
Sanders stopped short of blaming the Sunroad controversy on Waring, saying he wanted to make it clear that he accepted responsibility. He implied that Waring was at least one of those giving him bad advice, though.
 When asked why, after nearly a year of discussing Sunroad, Waring was asked to resign last week, Sanders said: "When I say we‚re going to be at this level, 160 feet, and we"re not dealing with any of this anymore, and then someone goes out as soon as I leave for vacation and talks to one of the council members saying, "What about 166?" -- that‚s not what I asked somebody to do. That's not what I told him I wanted done.
 The Sunroad building was permitted to be 180 feet, but the Federal Aviation Administration had recommended it only be 160. Sanders has said repeatedly that he wants the building taken down to 160 feet and no higher.
 In early August, Waring asked Councilwoman Donna Frye, whose district includes Montgomery Field, if it would be possible to have the building be 166 feet. Waring later told the local media that the mayor's office asked for his resignation.
 Sanders wouldn’t comment on whether or not Escobar-Eck resigned or was fired. The city has hired Patti Boekamp, R.T.E., an 18-year city employee, as the interim head of the Development Services Department.
 To try and prevent more problems like the Sunroad issue from happening again, Sanders has proposed a six-step plan. Once implemented, Development Services Department staff will be asked to red flag any projects that may interfere with FAA regulations.
There will also be procedures put in place to expand notifications of other agencies for projects close to airports. The city‚s Airport Department will be moved away from Land Use and Economic Development, and a team will be assembled to evaluate the Airport Land Use Compatibility Plan and recommend changes.
An Economic Development Impact Committee will be assembled as well, to serve as a multi-disciplinary team that reviews proposed and current projects.
 Finally, the mayor wants to improve the business relationship between Developmental Services and the city attorney's office after it turned sour during this controversy.
 Over the past few months, Sanders said he wishes he had prefaced most of his statements about Sunroad with the words "given what I know today."
 He often thought he had the whole story when he didn't, he said. An example of this was when Ted Sexton, an airport authority employee, had been sent to city hall to work on airport issues. Sanders had denied that Sexton was coming to deal exclusively with the Sunroad issue, but was later shown to have signed a letter allowing that. Sanders said he honestly can‚t remember signing the letter, though he doesn‚t deny it.
That‚s another thing he‚s learned - read every detail of everything you sign.
There is not a thing that moves off my desk now that I don't go over in detail, even to the level of typos,‰ he said.
 The Sunroad building is supposed to be brought into compliance by mid-November. The company was originally planning several buildings at the Kearny Mesa site, but has since withdrawn its application for other buildings and is focusing only on the controversial Centrum 12 building.
Sanders had his Deputy Chief of the Office of Ethics and Integrity Jo Anne SawyerKnoll compile a report of the Sunroad matter earlier this summer. The report, released in mid-July, found mistakes, but no illegalities. Critics have since decried disparities in the report and Sanders acknowledged it was imperfect.
 "It's obviously not an independent report because it's done by us," Sanders said. "Would I have done it differently? Yeah." But that's something for me to learn for next time.
 "I've learned a lot of extremely painful lessons from this whole process."
Send your comments to Elizabeth.Malloy@sddt.com

Downtown's Dramatic Residential Facelift Pauses
By KELLY BENNETT Voice Staff Writer, Friday, Aug. 10, 2007
  While unsold condos pile up on the market, foreclosures mount and developers stall construction or try to sell projects entirely, it's clear the region's housing malaise has a home in downtown San Diego. Now, a snapshot of the market shows a sort of pause in the dramatic residential facelift downtown, as some of the best laid plans from the boom time grapple with a sapping of condo-buying fervor. 
  A regional housing boom catalyzed revitalization efforts downtown this decade. As it became a residential neighborhood, downtown increased its condo stock nearly fivefold in the last seven years. The downtown population has nearly doubled in that time, reaching an estimated 30,000 today compared to 17,500 in 2000. 
 But near the end of 2005, the fervor peaked countywide and downtown. In fourth quarter 2005, 387 new condos sold, according to DataQuick Information Systems. The next quarter, at the start of 2006, just 161 new units sold. And then 88 the next quarter. After a swing up, sales for new units downtown numbered 82 in second quarter 2007. That's a little more than one-third as many as were sold in the same quarter two years ago. FULL ARTICLE

Near the rails but still on the road
Research casts doubt on the region's strategy of pushing transit-oriented residential projects to get people out of cars.
By Sharon Bernstein & Francisco Vara-Orta, LA Times, Staff Writers, 6/30/07
Excerpt: TV cameras in tow and champagne at the ready, a dozen of the county's most powerful civic leaders – including the mayor of Los Angeles, L.A. City Council members and county supervisors – touted the latest and glitziest new development in Hollywood: the planned W Hotel and apartments at the storied corner of Hollywood and Vine.
 This project, they pledged at the groundbreaking earlier this year, would restore a sagging neighborhood while also minimizing traffic – an important promise in increasingly gridlocked Hollywood.
 "People could live here and never use their cars," declared MTA Chief Executive Roger Snoble at the February event.
  It's a vision expressed frequently by local government officials, who see building large mixed-use developments next to mass transit lines as a key solution for not just the region's traffic congestion but also its spread-out geography and reputation for being unfriendly to pedestrians.
 In Los Angeles alone, billions of public and private dollars have been lavished on transit-oriented projects such as Hollywood & Vine, with more than 20,000 residential units approved within a quarter mile of transit stations between 2001 and 2005.
 B ut there is little research to back up the rosy predictions. Among the few academic studies of the subject, one that looked at buildings in the Los Angeles area showed that transit-based development successfully weaned relatively few residents from their cars. It also found that, over time, no more people in the buildings studied were taking transit 10 years after a project opened than when it was first built.  
  Los Angeles, with its huge geographic footprint and its limited public transportation system, can't offer residents of these developments the kinds of sophisticated transit networks available in cities like Washington, D.C. – or even smaller ones like Portland – where transit-oriented projects are believed by many to be working.
 The Times decided to examine driving habits at four apartment and condominium complexes that have already been built at or near transit stations in South Pasadena, North Hollywood, Pasadena and Hollywood.
 Reporters spent two months interviewing residents, counting cars going out of and into the buildings and counting pedestrians walking from the projects to the nearby train stations.
 The reporting showed that only a small fraction of residents shunned their cars during morning rush hour. Most people said that even though they lived close to transit stations, the trains weren't convenient enough, taking too long to arrive at destinations and lacking stops near their workplaces. Many complained that they didn't feel comfortable riding the MTA's crowded, often slow-moving buses from transit terminals to their jobs.
 Moreover, the attraction of shops and cafes that are often built into developments at transit stations can actually draw more cars to neighborhoods, putting an additional traffic burden on areas that had been promised relief.

Broke City Pays Well
By Don Bauder, Reader City Light, May 31, 2007
 Want a job with a good salary and great benefits? Work for the government. Want a job with a very, very good salary and great benefits? Work for the City of San Diego. Yeah, that city teetering on the financial brink -- the one that looted the employees' pension fund and then appeased the workers by granting benefits it couldn't afford to pay.
 It's a myth that government workers must live with salaries that are lower than those in the private sector and then make up for their penury by getting generous retirement benefits. All around the country, government pay has been growing rapidly, and so have excessive fringe benefits. Meanwhile, the private sector has been shipping jobs to low-wage countries, thus slicing average worker pay, and has also trimmed benefits severely. "While salaries and benefits are rising for government employees, we're seeing a squeezing in the private sector," says Alan Gin, economist at the University of San Diego.
 Now, government pay is generally better -- often as much as 50 percent better -- than private-sector pay, while government benefits are more than twice as munificent, and employees can retire at younger ages. City of San Diego employees enjoy much higher salaries and benefits than their counterparts in the private sector and local and state government. Full Article

Signs of the Times Taken Down In 2005, ipayOne made a deal to pay $2.5 million over five years for San Diego Sports Arena naming rights.
  Last week, the venue reverted back to its original name and workers took down ipayOne signage. The action somewhat confirmed a Pollstar magazine report that said the Carlsbad-based mortgage company stopped making payments for the naming rights last year. It's been confirmed that ipayOne is no longer accepting real estate listings and that it is liquidating its assets.
  The Sports Arena sits on land owned by the City of San Diego. In addition to lease payments to the city amounting to nearly half a million dollars annually, Arena Group 2000 is expected to pay the city 10 percent of the money it gets from Sports Arena naming rights. Developer Ron Hahn, the owner of Arena Group 2000, allegedly has majority ownership of the ipayOne brokerage.
  The ramifications of the city losing out to the approximately $200,000 it was expecting to receive over the next three years are unknown.
Neither Ron Hahn nor his son Ernie (general manager of the Sports Arena) returned calls requesting comment.
--Ken Leighto, San Diego Reader, 4/26/07

Plan expected to draw criticism in community
By Chet Barfield, UNION-TRIBUNE STAFF WRITER, Mar. 14, 2007
  LA JOLLA –  Touted as San Diego's “jewel by the sea,” La Jolla considers itself pretty exclusive with its posh homes, ritzy boutiques and breathtaking shoreline.
  A local board's plan to ease La Jolla's parking crunch includes pay-station parking at several beaches, including La Jolla Shores. 
  Now La Jolla might distinguish itself in another way by becoming the first San Diego community to charge for parking at the beach.
  A local parking district board's multifaceted plan to ease La Jolla's often frustrating parking crunch includes pay-station parking throughout La Jolla Cove, La Jolla Shores, the Prospect Street village and the Bird Rock business zone.
 In surrounding neighborhoods likely to get spillover from motorists not willing to pay, curb parking – now unrestricted – would have time limits.
  Residents could buy permits to be exempted. Like everything else in the proposal, no details have been decided. Graphic: Proposed parking plans 
  Although the draft “parking management” plan is just beginning to be aired for months of feedback and revision, local leaders are expecting an outcry.
FULL ARTICLE:
http://www.signonsandiego.com/news/metro/20070314-9999-1m14parking.html

Residents warn of loophole to 30-foot coastal height limit
Updates to affordable housing code to go before City Council Feb. 27
Kailee Bradstreet, Peninsula Beacon, February 22, 2007
http://www.sdnews.com/vnews/display.v/ART/2007/02/22/45dde2f5be797  Developers proposing to build a percentage of affordable housing units maysoon qualify to receive incentives such as increased structure heights if
City Council decides Tuesday, Feb. 27, to pass a series of proposed
municipal code amendments.
  While the city has indicated it must update its codes to comply with state law, which has undergone a series of changes over the last three years, some residents are alleging that the amendments would go beyond what the state requires and could jeopardize the 30-foot height limit in the coastal zone.
  "We have not changed the section that says developers cannot exceed the 30-foot height limit in the coastal zone," Dan Joyce, senior planner at the city‚s Development Services Department, said in response to the
claims. "There is nothing in the draft that shows that changing at all."
The draft amendments are proposed for a section of the city code that
references affordable housing density bonuses ˆ a regulation that allows
developers to have more units per building if they provide a percentage of affordable housing. 
  The state's version of that law has changed to increase the amount of additional units developers can obtain from 25 percent to 35 percent, with an added provision that would allow any development regulation deviation such as increased floor-area ratio and height as well as smaller side-yard set-backs, according to Joyce.
  The law also states that developers providing senior and moderate-incom housing are eligible for density bonuses, he said. Proposed city incentives must be deemed by planning staff as financially
necessary to the developer for providing affordable housing in order to be granted, according to Joyce.
  Requests can also be denied if incentives would have an adverse effect on the environment, people's health and safety or historic resources, he said.
 But several residents from La Jolla, Bird Rock and Point Loma are
concerned that the incentives may be a way for developers to increase the 30-foot height limit in the coastal and coastal overlay zones, according to John McNab, a member of the San Diego Coastal Alliance, which held a press conference Feb. 19 on the issue in Ocean Beach.
  The city's amendments also specify that the process to gain incentives
would be ministerial, or over-the-counter, according to McNab and
residents Katheryn Rhodes, Darcy Ashley and Joanna Pearson.
 "What this means is the City of San Diego taking a state mandate and
saying, "Oh, goody, we can give developers a blank check," McNab said.
 "We need to revise the local laws to protect the public, and they are
doing the exact opposite of that. Our contention is they are going way
beyond the mandate and denying residents the right to protect their
community." McNab argues that this would mark a departure for most coastal development, which requires a public process for projects that exceed existing height and set-back rules.
  But according to Joyce, any project proposed in the coastal zone, an area that extends inland to Interstate 5 in many places, would also require a Coastal Development Permit, which would automatically send the developer to a community planning board for approval.
  Language that protects 30-foot height limits in the coastal zones is contained in the original municipal code and derived from the voter-approved Proposition D in 1972. The proposition cannot be overridden by a City Council vote but can be changed with subsequent voter-approved initiatives, according to Pam Hardy, communications director for City Council President Scott Peters.
  If the affordable housing amendments are approved by City Council Feb. 27, the revised code would apply to the entire city with the exception of the first 300 feet from the inland extent of beaches (in some cases to th first coastal roadway) as well as 100 feet from wetlands. Those boundaries fall under the California Coastal Commission's jurisdiction, according to Joyce.
  Residents, however, are not the only ones with reservations about the city's proposed changes to the municipal code. A seven-page letter from District 6 Councilwoman Donna Frye addressing environmental and growth inducement impacts of the amendments was
presented Tuesday, Feb. 20, to City Attorney Michael Aguirre.
 After spending four days reviewing the draft, Frye said she had questions about a supplement to the environmental impact report (EIR), which states that developers may ask for an incentive of reduced or waived facility benefit assessments, fees that are charged to landowners who propose new permits for land use.
 "My concern is that no one seems to be able to understand this very well and understand the impact that is going to have on the communities,
Frye said. "It impacts the city‚s ability to regulate growth and density, and the lack of public participation is a concern. A lot of it looks like
there will be only a ministerial process, which flies in the face of what
I call public policy. What's the point of having a public plan if someone
can come in and overturn it?"  
  For more information or to view the specific amendments, visit
www.sandiego.gov/development-services.San Diego City Council will meet at 10 a.m. Tuesday, Feb. 27, in the city administration building, 202 C St., 12th floor, council chambers, to vote on the proposed amendments.

Affordable Housing Incentives Draw Questions
By EVAN McLAUGHLIN Voice Staff WriterFeb. 22, 2007
 As San Diego development officials try to provide homebuilders with incentives to encourage affordable housing, the government is also grappling with the program's impacts on a longstanding height limit on coastal development and other guidelines.
  Under the proposed incentives, which mirror a 2004 state law, builders that include affordably priced homes in their project would be allowed to construct housing developments that are taller, wider or with fewer parking spots than the city would otherwise mandate.
  "But critics are concerned the city could be sacrificing too many planning regulations in order to buoy its depleted affordable-housing stock. They say the changes Mayor Jerry Sanders' land use staff is proposing could allow developers to circumvent several of the city's rules governing residential construction -- as long as they agree to include affordable units within their project. This is going to be a way to do zone-busting, community plan-busting, all under the guise of affordable housing," Councilwoman Donna Frye said. The councilwoman cautions that the law is vague enough to allow developers to pierce the 30-foot height limit in San Diego's coastal neighborhoods that voters passed in 1972, known as Proposition D. But Jim Waring, Sanders' land-use and development chief, disagrees. "I can say unequivocally that if a developer asked for these deviations, the city would turn them down. It's a non-issue," he said. Frye's worries, however, have spread to City Attorney Mike Aguirre. The city attorney wants to postpone next Tuesday's vote on the legislation -- drafted by his office -- because he said it is unclear.
 Whether or not the proposal is as far-reaching as Frye alleges, slow-growth activists who frequently fight aggressive development have rallied against the bonus program. While the state law has proved controversial locally, the complaints never came up during the bill's creation, its co-author said. "Cities had some concerns about other things, but if they thought these issues should have been brought, they had the chance three years ago," said state Sen. Denise Ducheny, D-Chula Vista, a co-author of the state law. 
  The city currently requires builders to restrict the prices on 10 percent of the homes they build, or to pay a fee that is used to finance affordable housing projects. That requirement has struggled to produce affordable units, as most developers opt to pay the surcharge and the funds have not been enough to keep pace with the city's expectations.
  Under the mayor's current proposal, developers who include affordable housing can receive the right to build more densely on their properties or receive other incentives, such as the ability to forego some of the parking requirements the city typically requires. For example, a homebuilder who sets aside 10 percent of the homes on a project to be reasonably priced for a moderate-earning household can add 20 percent more square feet to their property. In addition to more density, the state law allows for cities and counties to provide their own incentives to affordable housing developers.
  Waring said the city will allow three types of incentives to builders: permitting more density than is allowed under an existing blueprint for a community, allowing development closer to their side-yard fences, and reducing the number of parking spots they are obligated to provide their future residents.
  By garnering more density, builders can increase the number of units for rent or sale on the property.
  Frye claims the proposal is worded so broadly that the city will not be able to deny other requests developers might make. "If you don't clearly define the terms, it can mean anything anyone wants it to be," she said. Frye interprets the proposed law to allow developers a waiver from undergoing environmental reviews, paying infrastructure fees or honoring Proposition D, the 1972 ballot measure that sets a 30-foot height limit for buildings along the coast, if that's how they wanted to cash in their incentives.
  The risk of having Proposition D sidestepped by affordable-housing developers has generated enough worry among activists that they organized a press conference Monday in Ocean Beach to speak out against the bonus program.
  Waring said the activists' cries are for naught. He acknowledged that the program will have to evolve with time and that developers will be treated on a case-by-case basis. The program is already state law, he said, and developers could demand incentives like the ones laid out by the Legislature if they wanted to. By passing its own ordinance, the city has a chance to craft its own program, he said.
  "A developer could come in today and ask for these deviations and we would have to grant them to the developer whether or not it's on our own books,"  Waring said.Developers dismissed Frye's claims, saying she was using them to stall development. "It takes them only a matter of months whenever they want to raise fees ... but it's taken them four years to comply with state law," said Matthew Adams, governmental affairs director for the Building Industry Association of San Diego County. "It's very frustrating from our perspective."  Frye said she will continue to push for more specifics until she has a clear understanding about what restrictions the city will concede to affordable housing developers, and what it won't. "The problem is the city's analysis, how it's done and what it means," she said. "It's not adequate."

Too Many Condos
San Diego Daily Transcript ran a story (subscription required) pointing out that over 3,000 condo units are currently under construction downtown. Additionally, another 7,000 downtown units are either approved or proposed.
 How many of those latter 7,000 will actually be built is open to question. But friends in the industry tell me that once a building is under construction, the odds are high that it will be finished, which implies that most of those 3,000 units in progress actually will be built to completion.
 At the moment, ZipRealty.com indicates that there are 505 dowtown resale condos listed for sale. That may not seem like much, but the pace of recent downtown sales has been so weak that it would take almost a year just to burn through that existing inventory. It is into this already serious oversupply that a further 3,000 or so units will be released over the next two or three years.
—RICH TOSCANO

First the Feds, Now the Neighbors
By Don Bauder, Reader City Lights, November 30, 2006
Excerpt: Michael Ellis, cofounder of the bankrupt Metabolife International, has battled drug enforcers, the Food and Drug Administration, the Justice Department, the Internal Revenue Service, personal injury lawyers, the House Energy and Commerce Committee, bankruptcy probers -- you name it.
  Now he is fighting with people who live near a mansion he owns in Point Loma. Both sides want to compromise, but the matter may have to be resolved in court.
  Ellis owns, but never used as a primary residence, a posh home on the bay in Point Loma at 2905 Nichols Street.
  Nearby residents and Point Loma community groups charge that Ellis and his immediate neighbor at 2900 Nichols Street have erected walls and planted vegetation that block the public's right-of-way at the foot of Nichols Street.  People have a right to have a view of the bay, as well as a path to the water from that spot, say such groups as the Peninsula Community Planning Board and the Point Loma Association, along with the City of San Diego.
  Norman Magneson, a retired Navy civil engineer living at 2980 Nichols Street, has led the battle for more than four years. He enlisted 82 property owners nearby to join his cause. If the matter goes to trial, it would be "a case célèbre," he says. The outcome would be "precedent-setting. Every dead-end street in the coastal area of the city of San Diego will be affected by the outcome."
  City Attorney Mike Aguirre agrees. "I am trying to work out a compromise, but we must protect public access wherever the public has a right to it, particularly on dead-end streets in coastal areas."
Full Story: http://www.sdreader.com/php/cityshow.php?id=1509

Council approves Hillcrest building
By ELIZABETH MALLOY, San Diego Daily Transcript, Sept. 12, 2006
 The San Diego City Council voted in favor of a 12-story mixed-use building in Hillcrest Tuesday afternoon, despite some concerns from local residents. Donna Frye was the lone dissenting vote.
 Citizens expressed concerns over the building's height and aesthetic, as well as traffic at its 301 University Ave. location. The building, however, fit into the area's community plan, and the majority of councilmembers agreed that the Pacific Development Group's plan to build the site with 121 public parking spaces would be a major asset in Hillcrest.

Sanders seeks action on affordable housing
By ERIK PISOR, The San Diego Daily Transcripty, Sept. 15, 2006
 San Diego continues to be one of the least affordable housing markets in the nation, but some new approaches, involving local government and housing advocates, look to address the lack of affordable units.
 As part of a news conference hosted by the San Diego Building Industry Association at William Lyon Homes‚ Promenade at Spectrum, Mayor Jerry Sanders and representatives from the San Diego Housing Federation, San Diego Association of Realtors, Campaign for California Home Ownership, and the San Diego Organizing Project announced a new housing strategy.
 According to a release from Mayor Sanders a housing strategy has been initiated at the city that will utilize the recommendations of an ad hoc committee, who will develop a housing business plan designed to lead to the identification and construction of housing projects at various locations.
 The committee will be a group chosen by the building industry and housing advocates. It will consist of three representatives from the building industry, four from housing advocacy groups, members of the mayor's staff and a representative from the Housing Commission.
 The important thing is that at the end of the process, if successful, the City will have specific projects located on specific pieces of land, Sanders said in a release, adding the goal of this strategy is to create a repeatable model that can be utilized by all parts of the community to increase housing opportunities.
 Sanders announced the city is also restructuring the planning, redevelopment and economic development departments into a single team under a single director, Bill Anderson.
 By integrating these three departments into one we‚ll have a stronger link between our vision of San Diego and actually achieving that vision, Sanders said.
  Additionally, the Housing Commission is continuing its efforts to expand homeownership through the creation of two new, first-time homebuyer programs and working to replace depleting federal housing funds, which threaten the Commission‚s public housing program and the 1600 households it serves.
 The commission is also proposing to make the Affordable Housing Fund, which comes from dollars provided by market-rate housing developers, geographically more flexible in terms of where in the city the funds can be spent, as more dollars will be invested in affordable housing.
 Local government is limited in just how much it can do to influence the housing market and prices, it can still play an important role in securing San Diego‚s housing future, Sanders said. "It is time for action."

Now what?
By Larry Stirling, San Diego Daily Transcript , Aug. 14, 2006
 On Aug. 8 of this year, Mr. Arthur Levitt Jr. dished a load of dirt on our "city fathers."
 Levitt was stately in inflicting an imposing glower at the childish miscreants that run our city. But, in the end, he took the sting out of his sanctions.
 After all, he has to collect $20 million from the very same City Council members. Twenty million buys a lot of grace.
 For all of his gravitas, Mr. Levitt is not free of his own tormentors. He has been roundly criticized by both Wall Street Journal reporter Charles Gasparino, who wrote "Blood on the Street," and author Gary Weiss, who wrote "Wall Street vs. America."
 In short, Chairman Levitt stands accused of being too considerate of corporate management and not adequately protective of the consuming public.
 Sadly, that appears to be true here. The fact that no elected official was held accountable for his or her conduct is simply bad public policy. Council members, mayors, and city attorneys are elected precisely to be accountable. If not so then every vote is a charade.
 While much, if not most, of the Kroll report appears to be a reprise of bits and pieces we have previously heard from a variety of sources, it does provide a useful summary of civic perversity and the cheesy parts that many city actors played.
 This is not to minimize the value of the investigation. Kroll would have had to satisfy itself as to the bases for various criticisms. To do otherwise would risk being successfully sued for libel.
 But the real question is: "Now what?"
 Under the heading of "Remediation," Kroll provided 25 pages of suggestions. Based on my 45 years experience in public administration, I find that most of them are simple "toss offs" out of a flatulent textbook that will do nothing more than increase overhead while achieving minimal results.
 For example, they suggest that the city "fix" its accounting system. The city had a perfectly good accounting system under Bill Sage and previous honest city auditors.
 The problem is that subsequent auditors "fixed" the accounting system by, among others, abandoning the "modified accrual" system that had protected the city for years. Accounting systems, like computer software, obey the iron law of: "garbage in, garbage out."
 The old motto says: "No wall is taller than the men who stand behind it." Fix the accountants and you will fix the accounting system.
 Kroll wants a five-year budget. That just means there will be five years of mythology reflected in the draft document instead of one. The final budget is what organized labor lets it be. Just ask them to prepare the budget. Then it will be honest.
 Kroll wants a "CFO" which in effect would become a financial "czar." This, and all of their similar suggestions suffer from the same deficiency. Rather than fix the erring agency, it is government's response to create a new agency to watch the first, and second and so forth. It never works.
 Kroll is correct about the city being deficient in information technology. That is the result of the manager's defeat of the Data Processing Corp. that repeatedly proposed upgrades in all phases of the city's IT. Unleash the Data Processing Corp.
 In short, there is really only one Kroll suggestion that will help. The rest will continue business as usual only with extra bureaucrats.
 Here is what needs to be done.
 First, as Kroll correctly says, protect the whistle blowers. In 1977, David Morris warned me about the shenanigans of the retirement board. Thanks to Dave's integrity, we went down there and cleaned house.
 Other than Mrs. Shea, who in the entire bureaucracy recently told the truth to the public? And she got fired from the retirement board for her trouble.
 The second thing is to promote and protect those employees that turn in suggestions for improvements.
 Contrary to the lip service you will hear, suggestions are as disfavored by the city culture as is whistleblowing.
 But, here is the granddaddy reform of all. This is the only one that will make any difference.
 Subject anyone entrusted with city responsibility to the same legal standard of care as the rest of us.
 Anyone of us can be sued for negligence in our professional conduct. And, we can be held personally liable for that conduct. City employees are held to no such standard. And if their conduct is grossly negligent and they do get successfully sued, it is the city taxpayers that suffer for their malfeasance.
 Imposing the normal standard of care on government employees will never happen because they will never accept the same level of professional responsibility for their work as the rest of us.
 And therein lies the problem. Fix city-employee accountability and you fix our city.
 Stirling is a retired superior court judge who now practices law with the firm of Garrison & McInnis. He is a former Army officer, member of the San Diego City Council, the California State Assembly and the State Senate. Send comments to larry.stirling@sddt.com. Comments may be published as letters to the Editor.

Construction suspended, halted on downtown condominium projects
By ERIK PISOR, The Daily Transcript, May 31, 2006
 Recently there have been speculations within the local building industry that increasing construction costs and declining sales activity may cause some of the numerous developments in downtown San Diego and immediate surrounding areas to be halted. Now, nearly half way through 2006, at least three developments have halted construction.
 At the proposed site for Atmosphere, a project that was to be developed by JS Properties at 1446 Fifth Ave., construction began in March 2005 and was to be completed in fall 2006. However, construction equipment has been removed from the site and all that remains is a huge hole.
 According to David Hawkins of H2A Architects (Hawkins & Hawkins Architects), who helped design the development, one reason the project has been halted is that JS Properties is no longer a company.
 "There are always projects for whatever reason that get held up," Hawkins said, adding construction on a recent development the company was involved with was held up by airport and port authorities.
 According to Hawkins, a new developer has picked up the Atmosphere property and construction is anticipated to resume on the proposed 73-unit condominium project with 3,000 square feet of retail space.
 Other reasons given for why construction on the development stopped are financial issues and the processing of permits.
 Hawkins said although the majority of the permits were done before construction halted, the investors decided to add one more level of subterranean parking. The permits for the extra parking level are still being processed.
 A project where construction has not begun is Intracorp's condo development Triangle across the street from the trolley station at 12th and Imperial. Besides construction not starting, Intracorp has taken its sign down and has replaced it with a Grubb & Ellis|BRE Commercial for sale sign.
 "We progressed to the point where we were prepared to pull the building permits. We got to the point when we had to make a decision from a business standpoint," said Tim Baker, assistant project manager, adding the company sees the current downtown market as a situation where they could sell the property and make a larger profit compared to building and selling the development's units in a year.
"The market has softened, but it was more of business plan decision ... the property has a lot of potential," Baker commented.
 Initially, Intracorp meant for Triangle to be a mixed-use development consisting of two buildings containing 57 condominiums, 4,000 square feet of retail, and 84 parking spaces on the triangular-shaped block. The project was expected to begin in early 2006 with a summer 2007 completion date. 
 "We're still not opposed to building it out," Baker said, adding the company is assessing the possible demand for this property type from other builders and developers. Intracorp has already been in discussions with several organizations that are eyeing the property as a site for possible affordable units.
 While the company has stopped building on this development they also expect to break ground at 10th and Market later this year on 23-story Strata, a 236-unit condominium project with 12,100 square feet of retail space.
 Another situation similar to Atmosphere is located at 526 Grape St. in Bankers Hill across Sixth Avenue from Balboa Park. In November 2005 the property, which at the time was a 15-unit apartment complex, was purchased by Olson Urban Housing Inc. On March 2, 2006, the San Diego Planning Commission approved 4-0 a map and site development permit to demolish the units and construct 22 condominium units on the .57-acre site.
 The 15 apartments were demolished, but no further activity has taken place. Currently on the property are several holes in the ground and a chain link fence surrounding the property, no indication as to what will be built is posted.
 Calls to Tony Pauker, San Diego regional president of Olson, and Scott Homan, chief financial officer, were not returned.

FBI searches pension fund ex-chief's office
By Matthew T. Hall & Lisa Petrillo, Union-Tribune, April 26, 2006
  A two-year FBI investigation into San Diego's embattled pension system grew this month to include its former president, Frederick Pierce IV, when federal agents seized computers and unspecified documents from his workplace.The search marks the first known case where federal investigators probing the city's fiscal failures have sought information outside City Hall and the pension offices.
  Agents arrived unannounced two or three weeks ago at the San Diego State University Foundation office where Pierce works as a developer, Pierce and an SDSU Foundation spokeswoman said yesterday.San Diego FBI Chief Dan Dzwilewski confirmed that agents searched Pierce's office, but declined further comment because the search warrant is sealed.
  Pierce and foundation spokeswoman Theresa Nakata would not say whether the scope of the search extended beyond the pension fund and its $1.43 billion deficit.
  Pierce said he was out of town when the FBI appeared at his office.“I received a written request for information, and I complied with that request,” Pierce said. “It has always been my policy to provide any information that I am requested to provide.
  ”He said it wasn't the first time that prosecutors have sought documents from him related to the pension fund and added that he has cooperated when questioned about fund-related investigations.
  An FBI spokeswoman referred calls to the U.S. Attorney's Office, where a spokeswoman said she could not comment unless charges have been filed.Pierce, 43, has not been charged with any wrongdoing in the pension scandal.Federal investigators have papered City Hall with subpoenas since early 2004, when they began digging into the pension deficit and allegations of possible corruption and securities fraud by city officials.
  The deficit stems mainly from City Council decisions to underfund the system while increasing benefits in 1996 and 2002.
  Pierce was appointed to the San Diego City Employees Retirement System board in 1997 under Mayor Susan Golding, then reappointed to a second six-year term in 2003 under Mayor Dick Murphy.
  Pierce, a well-connected developer and development consultant, is a former president of the SDSU Alumni Association as well as an ex-trustee of the California State University System, the largest public university system in the nation.
  He has been one of the highest-profile developers on the SDSU Foundation's $350 million Paseo retail-housing complex. The project has been in the works for 18 years and was recently taken over by San Diego State.Pierce has worked for several years with the foundation. His contract ends Sunday because the foundation is shifting its focus away from development.
  The foundation is a 60-year-old nonprofit with a $160 million annual budget to handle research funding, scholarships and real estate dealings for the 33,000-student university.
  Pierce left the 13-member pension board in March 2005 as the council overhauled its makeup and membership with a slew of new appointees.
  He had been president of the board for five of the eight years he served on it.In January, he became the first witness called by defense attorneys representing six board members charged in San Diego Superior Court with violating state conflict-of-interest laws.
  In all, eight people face criminal charges in pension probes
  .In January 2005, a federal grand jury indicted the system's former administrator, its attorney and three former board members on conspiracy and fraud charges, contending that they illegally boosted their retirement benefits while condoning the underfunding of the system.
  Four months later, District Attorney Bonnie Dumanis filed charges against six past and present pension board members – including three who face federal charges – alleging that each improperly benefited from votes as city employees to let San Diego pay less into the pension fund.San Diego Union-Tribune researcher Merrie Monteagudo and staff writers Onell Soto and Kelly Thornton contributed to this report.

City Attorney wants SDCERS to deny legal costs for Grissom, Chapin
By DOUG SHERWIN, The Daily Transcript, March 15, 2006
 San Diego City Attorney Michael Aguirre is asking San Diego City Employees' Retirement System board members to deny the legal defense costs for former plan administrator Lawrence Grissom and its former legal counsel Lorraine Chapin.
 The two former pension officials were indicted by a federal grand jury in January for conspiracy to commit wire and mail fraud.
In his March 15 letter, Aguirre also cites misrepresentations made by Chapin's attorney at the SDCERS January 30 meeting.
 "Mr. Grissom and Ms. Chapin had a fiduciary duty to provide honest services to the constituents of the City of San Diego and the Retirement Board," Aguirre said. "They violated that trust when they concealed information from the board regarding the presidential leave benefits of Firefighters Union Official Ron Saathoff, who was also indicted by the U.S. Grand Jury.
 "San Diego taxpayers should not have to bear the financial brunt of their wrongdoing."
 SDCERS President Peter Preovolos is bringing the matter back to the board Friday after a similar effort failed in January.
In his letter, Aguirre criticized Steven Madison, Chapin's attorney, for trying to convince the board to indemnify his client by using misleading statements.
 According to Aguirre, Madison told the SDCERS' board on January 30 that he also serves as an "elected city councilman" and represented that he had "perspective on making judgments like this," referring to the board's decision whether to indemnify and pay for the legal costs of his client. Madison is a councilman from the City of Pasadena.
"The Board should know that the Pasadena City Council apparently has never voted to indemnify a former employee for legal fees in criminal proceedings," Aguirre said. "The City Attorney for Pasadena was requested to review its council records and the City of Pasadena has produced no records that confirm indemnification of former employees for criminal defense costs."

Stadium Plan Sacked
By ANDREW DONOHUE, Voice Staff Writer, Jan. 10, 2006 
 The Chargers scrapped plans Monday to place a proposal for a new stadium and mixed-used development before voters in November, as a team official said they were unable to sign up a development partner to help shoulder the costs and risks of the proposed $800-million project.
 The announcement marks a significant turn in the team's arduous history with the city of San Diego. The team's special counsel, Mark Fabiani, hinted that the Chargers would be willing to entertain stadium concepts with other cities in San Diego County as soon as legally possible. Under its current contract, the Chargers can begin relocation discussions with locales outside of San Diego on Jan. 1 and move elsewhere after the 2008 season.
  This November's ballot was seen as the voter's chance to avoid those two looming deadlines altogether. The announcement now creates a scenario in which the Chargers could leverage one city against another in stadium negotiations in the coming year.
  Fabiani said the size of the project, coupled with the city's financial and political crisis, scared away the few potential development partners who had the capital to complete the massive project. The proposal calls for an $800 million upfront investment to cover the costs of a $450 million and surrounding development.
  "The city's situation, including the opposition of key city officials, was a major factor in the opinion of some development partners that this was not the right time to throw $800 million on the table and risk not being able to actually build the project," Fabiani said. Fabiani heaped significant blame on City Attorney Mike Aguirre, saying his lack of cooperation and confrontational statements added to the uncertainty at City Hall. However, Fabiani said some potential development partners were also pessimistic about the city's uncertain housing market and worried that the income generated from condominium sales wouldn't be enough to make the project pencil out. To be sure, the Chargers' proposal has been ambitious from the start. Originally, the team asked for as much as $200 million in taxpayer funds to craft the stadium in their first proposal in early 2003. However, in an era when the public largely soured to the idea of public subsidies for sport stadiums, that plan soon became unworkable.Instead, the Chargers envisioned asking voters for 60 acres of the 166-acre Qualcomm Stadium site in Mission Valley. On the land, they would develop about 6,000 condos and sell them to recoup the costs of a $450 million stadium, $175 million in infrastructure improvements, a 30-acre public park and the retiring of nearly $60 million in city debt from the 1997 remodeling of the stadium.
  However, at the same time, the city has plunged ever further into a financial and political crisis. A number of elected officials have resigned under the cloud of scandal and mismanagement as the city's pension system, facing billion-dollar deficits, has consumed growing chunks of the city's day-to-day budget. Talks of bankruptcy lined the recent mayoral campaign.
  "That situation has made it very difficult to implement what already was an ambitious project from the start," Fabiani said.The team will also reassess whether it makes sense to continue with the current Qualcomm proposal. Fabiani said all ideas for any location will be considered.
  The announcement throws into the air the team's future in the city of San Diego. Fabiani hinted at the fact that the team would like the opportunity to speak with other cities around San Diego County. A number of the county's mid-sized cities have expressed some interest in hosting the Chargers.
  The team's lease with the city prohibits it from talking with other cities until Jan. 1. However, a group of business leaders has floated the idea of modifying the contract to allow the team to talk with cities within the county before that date. Council President Scott Peters wasn't available for comment for this story, but has expressed interest in the idea. Mayor Jerry Sanders said Monday he'd consider such a proposition, though it would be the purview of the council.
  Ever-present in stadium discussions is the National Football League's constant push for new stadiums and its desire to place a team in Los Angeles. The nation's second largest city has been without a team since the end of the 1994 season.
  Fabiani deflected talk of the Chargers relocating outside of the county.
  "I hope we will never have to visit the question of talking to other cities outside of the county," he said.
  Fabiani said he was optimistic that new Mayor Jerry Sanders and the City Council appeared willing to talk about proposals.
  The team's current push for a new stadium began in 2002, when it informed city leaders that it would likely exercise an option to get out of its lease with the city in order to spur stadium negotiations with San Diego and other cities. Former Mayor Dick Murphy then convened a citizens' task force to study the team's desires. The task force recommended a development that put the risks of building a stadium and housing on the Chargers, but said any new tax revenue generated from the site could be used for infrastructure or other related needs.
  The team and the city later renegotiated the stadium contract to keep the Chargers securely locked into San Diego with sufficient time to get a stadium proposal on the ballot. However, with November ballot hopes dashed, that scenario seems unlikely.
  A proposal could hypothetically be put before voters in the next citywide election -- likely to be the 2008 presidential elections -- but Fabiani said the team will likely know by the end of this year if a deal is possible in San Diego.
  Aguirre and Sanders held a joint news conference to react to Fabiani's announcement. Both avoided taking a stance or explaining a plan of action to help the team. Aguirre said he was refraining from a counterattack to Fabiani's statements about him. His measured response contained a little bite, however.
  "Mr. Fabiani just misses the good fight. He's hoping that we can get into it. Unfortunately we're not going to do that for him, we'll have to delay his gratification,
  " Aguirre said.Sanders said he wasn't sure about the assertion that the city's problems were hampering the Chargers' pursuit of a development partner.
"I don't really know what that entails in terms of what their search has been and what answers they've gotten. So I don't know if the city's been an impediment to that," Sanders said.
  Asked if he supported Aguirre's stance on the issue, Sanders' parried the question."I want to make sure we have negotiations with the Chargers that are respectful and make sense to everybody," Sanders said.
  Aguirre said he thought that the City Council could still put the Chargers' proposal on the ballot either this year or in a special election in 2007.Sanders didn't know about that. "A special election would be very costly I don't know if that's a reasonable alternative," he said.

SRO Hotels A Dinosaur In Demand
By PAT BRODERICK - 10/17/2005, San Diego Business Journal
 Single-room occupancy hotels ˜ an endangered species in Downtown San Diego ˜ have lost their luster for builders Bud Fischer and Ruben Andrews, while Judi Carroll Winslow is reinventing her historic Pickwick Hotel on West Broadway altogether, positioning it as "the best little two-star hotel in San Diego.
 Summing up the state of their industry, Andrews said, "I don‚t know anyone who will be building an SRO in this marketplace now.
 SROs ˜ so prevalent in Downtown San Diego ˜ are a dying breed, say the builders and owners. Relief isn‚t expected to come anytime soon, because of the ongoing rancor between the city and the owners.
 These single-room units, typically furnished these days with a bed, a small refrigerator and a microwave, once flourished when Downtown San Diego was bustling and needed basic lodging for its workers and travelers. Nowadays, SROs ˜ there are about 5,400 in the city of San Diego, mostly Downtown ˜ are favored by low-wage service workers, low-income seniors and students alike, but the hotels are becoming liabilities for many of the owners.
 Their major beef is that the city is hobbling them by requiring relocation and replacement costs if they decide to close up shop, while offering them no incentives to spruce up deteriorating buildings. All but a few of the hotels are subsidized, with most at market rates, said Dale Royal, senior project manager for the Centre City Development Corp., the city‚s redevelopment agency for Downtown.
 The current city ordinance requires SROs that close to pay tenants, who have lived in the unit for at least 90 days, two months‚ rent. The tenants also qualify for a rebate of $10 for each month after that, capping out at $210.
 The SRO must replace all units removed from the market with very-low-income units ˜ 50 percent of the average median income ˜ or pay 50 percent of replacement costs.
 It's bordering on craziness, saying that, "You must stay in business,‚ or you have to pay thousands of dollars for each resident that has to leave your facility, said Winslow, vice president of Winslow Investments, the parent company of Pickwick Partners, the hotel owners. "This is something a public/private partnership should be doing.
 The city is "misguided, she said.
 The government and public bureaucracies need to operate with regulations and restrictions, she observed. "In the real world of things, given that we are a capitalistic society, public/private partnerships should work together with incentives, rather than restrictions.
 Andrews chairs a group called the Coalition for Urban Housing Solutions, which is pushing for an increased supply of SROs, an end to "regressive regulations, and the establishment of "reasonable land-use regulations. All of this, they say, will allow the market to build significant numbers of new units, lowering rents, replacing older units with new ones and reducing the amount of subsidies that might be required for rent-regulated units.
 The group also wants the redevelopment agency ˜ the CCDC in the case of Downtown ˜ to "fulfill its social obligation by providing relocation assistance and providing replacement units at "extremely low rent levels.
 It‚s unfortunate that this discussion has cast us on opposite sides, said Andrews, who owns the Hotel Mediterranean, an SRO in Downtown‚s East Village, and is opening a second one, the Hotel Occidental, at Fourth and Elm, in November.  We both want to see more of this housing built. We need the city to step forward and recognize this.
 But, he said, "Toni Atkins has refused to meet with us, though we have repeatedly requested meetings.
 But Atkins, the city‚s deputy mayor, sees it differently.
 We have been trying to negotiate for some time, she said. "I support development of SROs and incentives to build SROs. It is a housing niche that provides affordable housing.
 Atkins, acknowledging the shortcomings of the existing regulations, said, "We went back to the drawing board, and said, ŒLet‚s see how this can be mutually advantageous, but let‚s not hurt the residents at the low end.‚
 But so far, she said, a compromise has yet to be reached with the SROs.
 Meanwhile, a revised ordinance, which has been in the works for some time, is expected to make its way to the City Council sometime after the Nov. 8 election.
 The Pickwick‚s Winslow, now planning a major rehab of the old hotel, views SROs as part of the city‚s history.
 "Hotels fell into a rhythm back in the ‚60s, when people left Downtown, and buses stopped being the primary mode of transportation, she said. "What was left was leasing long-term, becoming SROs. It was a cyclical reaction, and most of the people who now operate these ˜ the older properties ˜ are doing so because they became that at the time.
 While Downtown is now experiencing a rebirth and land values are expensive, said Winslow, affordable property can still be obtained around trolley lines, "where you can get land at $25 a square foot and get a public subsidy.
 Switching Gears
 Before Jan. 1, 2004, state law let SRO owners off the hook for replacement costs if they notified the city of their intent to withdraw units from the rental housing market. Winslow was among them, and now is making the relocation of her long-term Pickwick tenants "as seamless and painless as possible, offering assistance and relocation funds as required under the law.
 Original construction of the 234-room Pickwick began in 1926, touted as the first hotel in San Diego with "ensuite bathrooms, and a marketing slogan that promised, "A Room and a Bath for Two and a Half.
 The Pickwick‚s $16 million renovation, expected to begin early next year, will be done in two phases, said Winslow. The first is scheduled for completion at the end of June, with a full opening planned in the first quarter of 2007.
 "We just spent $200,000 on elevators, she said, adding that most of the improvements won‚t be noticeable, given the limitations placed on rehabbing the historic building.
 "Seventy-five percent of everything we spend on this, you will never see, she said. "They are buried in the building. This is what‚s driving this ˜ the need for refurbishing.
 Paul McNeil, a principal of London Group Development Services in Downtown San Diego and an SRO consultant, believes that this is a good time to get out of the SRO business.
 "A lot of these buildings are aging housing stocks, built around the turn of the century, with very little maintenance, generally, on the lowest-priced units, he said. "The city isn‚t exactly jumping in offering incentives to rehab these buildings. It‚s important that you have some incentive for reinvestment in these buildings, which are the lowest rung on the ladder of housing stock. You want to be able to buy, sell and trade properties.
 Fischer, an owner of Trilogy Real Estate Management, Inc. in San Diego, has about 650 SRO units in five buildings south of Broadway, some subsidized,
some market-priced.
 "Frankly, the city is making a big mistake if they‚re trying to legislate affordable housing on existing SROs, said Fischer. "It‚s ruining the marketplace. People are not obligated to maintain them. There is no incentive to build them.
 Fischer said that he‚s out of the SRO business.
 "I wouldn‚t develop another one if you gave it to me, he said. "You cannot build them without a subsidy, and the city doesn‚t have subsidies of any consequence. These units today would take at least $50,000 a unit subsidy or more, and where are you going to build them? Downtown? Look at the cost of land Downtown.
 That‚s the main reason why Paul Downey, the president and chief executive officer of Senior Community Centers in San Diego, decided to build the new $29 million City Heights Square low-income senior complex in City Heights rather than Downtown San Diego.
 "Ideally, Downtown makes a lot of sense, said Downey, who also has the Potiker Family Senior Residence on 14th Street. "Downtown is where a lot of our seniors are located, but the biggest challenge is the cost of land.
 Invited by Deputy Mayor Atkins to locate the project within her district, Downey said that land costs there are $69 a square foot, compared with $400 or $500 a square foot in Downtown San Diego.
 "It's very difficult to go Downtown and build anything, he said.
 But the CCDC‚s Royal believes Downtown is still a viable option for this type of housing.
 "Senior housing and SRO housing are very capable with high-rise requirements Downtown, and in Downtown, and there are lower parking requirements, he said. "It‚s expensive, but you can do a lot more units on a small site Downtown.
 Royal also takes issue with the concern over lost SRO units.
 "Don‚t forget to count other types of housing that may be more appropriate housing, he said, citing such senior developments as City Heights Square.
 But, said Downey, there are whole classes of people feeling the brunt of dwindling SRO stock.
 "There is a drastic need for more housing, said Downey. "SROs have been the lowest rung of housing in San Diego, and we are eliminating a whole class of housing through redevelopment.
 As more baby boomers reach retirement age, he said, it will just get worse, coupled with the new competition for housing Downtown.
 "There are a lot of service industry jobs that have been created by the ballpark, said Downey, "and competition with service workers looking for places, competing for the same housing as the seniors. But those are being removed or torn down or renovated into high-end hotels. It‚s Economics 101 ˜ demand up, supply down, prices up.
 His City Heights project, which has a $6 million commitment from the CCDC, and recently received an $18 million federal tax credit, will add 150 units to the supply. But the project won‚t be breaking ground until the end of February 2006, with competition scheduled in mid-2007.
 Those rooms, he said, "will be filled in the blink of an eye.
 "We could build that size building every year and not even begin to get to the demand, and that‚s without factoring in the increases in demographics.
 "If the federal government made more tax credits available, we‚d have more projects, said Downey. "Without that, money generated by CCDC alone is not enough to bring about the affordable housing we need.
 Mitch Mitchell, the vice president of public policy and communications for the San Diego Regional Chamber of Commerce, said that "the harsh reality is, the housing crisis is affecting people of all economic status ˜ low-low, work force with a decent income, who still can‚t afford housing, and seniors, which hasn‚t been a topic of conversation. They have been lost in the whole debate. The housing Downtown that has been removed has been for seniors, and there are few options for them on fixed incomes.
 Mitchell continues to push for the creation of a city "housing czar, who can keep the mayor and City Council informed on housing issues.
 "In the end, we have an aging population that will require affordable housing, he said. "We have to start looking at this problem comprehensively.
Atkins agreed.
 "I keep looking at what we‚re losing, said Atkins. "We are not keeping up. It‚s so difficult when you realize there are so few units available for poor seniors. You see these go off-line, it‚s so disheartening.
 "We can‚t just give up on this discussion, she added. "The ramifications of not working together are pretty grave for our citizens. We may not always agree, we may come from different philosophical perspectives, but we need to keep the discussion going. That is the good news.

Restating assets a setback for city
By Matthew T. Hall, UNION-TRIBUNE STAFF WRITER, Sept. 17, 2005 
  Because of errors found by outside auditors, San Diego will have to lower the $6.8 billion in assets it claimed in 2002. The overstatements include $105 million for listing San Diego Zoo assets as the city's.
 Private auditors have found that San Diego overstated its net assets by more than $640 million in fiscal 2002 – a problem that portends greater difficulty for the city's restoration to sound fiscal health.
  The city's net assets will be lowered almost 10 percent from their reported total of $6.8 billion, a miscalculation used in three bond offerings, which opens the city to possible lawsuits and new federal sanctions and fines.
 The errors include the double counting of roads and bridges, delays in depreciating the value of water and sewer plants, and the inclusion of abandoned capital projects as well as improvements made to the San Diego Zoo by the leaseholder, the San Diego Zoological Society.
  KPMG, which is auditing San Diego's 2003 books, told the City Council last month that its findings would lower the city's net assets by about $640 million for that year. The city Auditor's Office released details of the overstatements this week in response to questions from The San Diego Union-Tribune.
 Thirty corrections will reduce by 9.3 percent the net assets San Diego reported as of June 30, 2002, according to a document released by City Auditor John Torell that calculated the overstatement at nearly $641 million.
  By comparison, Enron restated about $580 million in revenue in 2001 for the previous five years, an amount described in published reports as a record corporate restatement at the time.
 Deputy Mayor Toni Atkins called the accounting revelations "really quite astounding" but said she believes the range of problems won't be repeated.
Assets overstated
  Because of errors found by outside auditors, San Diego will have to lower the $6.8 billion in assets it claimed in 2002. The overstatements include:
$105 million for listing San Diego Zoo assets as the city's. $190 million for capital projects that were abandoned or never completed.

$147 million for double counting assets such as roads and bridges.

$147 million for depreciation delays of water and sewer plants.

$48 million for citing a Padres contribution toward the team's new ballpark as a city payment.

 "We're all somewhat disturbed and quite surprised to see this information," Atkins said. "I think it means we're changing a culture and a history of practice within the Auditor's Office and the city."
  The disclosures follow admissions by city officials last year that they had masked a mounting pension deficit from bond investors and overcharged residential ratepayers for sewer services.
 The well-publicized pension and sewer problems have spawned lawsuits and federal investigations, and outside experts such as the dean of the Levanthal School of Accounting at the University of Southern California say the city could face more of the same in the wake of its accounting errors.
  "You don't know whether this was purposeful or this was a mistake that was made in a very big way and no one was sufficiently skeptical about it," Dean Randy Deatty said.
  City Manager Lamont Ewell said KPMG is "going back nearly two decades" in recalculating the assets for the fiscal 2003 audit. That audit so far has cost $3.1 million. He said that the city's bonds are insured, so investors shouldn't fear any losses, and that the Securities and Exchange Commission knows about KPMG's diligence.
  He added that he resents any reference to San Diego as a sort of "Enron by the sea," an allusion made in national newspaper headlines last year.
  "No one in this city has walked out of here with bags of money like the executives of Enron," Ewell said. "These are book value losses and errors that were made as a result of not being thorough."
San Diego's overstatements include:
  $190 million for recording as assets capital projects that were abandoned or never completed.

$147 million for double counting infrastructure assets, including roads and bridges.

$147 million for waiting too long to begin depreciating assets such as new water and sewer plants.

$105 million for logging buildings and development at the zoo in Balboa Park as city assets instead of as leasehold improvements made by the Zoological Society of San Diego.

$48 million for classifying a Padres contribution toward the team's new ballpark as a city payment.

 KPMG, which began its work in April 2004, unearthed most of the errors. Others were identified by Torell's staff and by Macias, Gini & Co., the firm hired to conduct the city's fiscal 2004 and 2005 audits.
  Auditors are now trying to verify how many water and sewer pipes the city has and work to ensure the inventory of land the city is holding for resale is assessed at the proper value. KPMG needs city officials to complete this work and its fiscal 2003 financial statements to conclude the audit.
 Torell, who next week will begin presenting monthly financial reports to the City Council on San Diego's revenue and expenses, is trying to overhaul the Auditor's Office, which he took over in March.
  He said some of the problems stem from the city's use of a geographic information system to log its assets that isn't linked to an accounting database, and he is working to install a new process to eliminate errors.
  "Things can't get any worse," said Torell, whose predecessor announced his resignation just before the January 2004 disclosure of the city's pension deficit, which triggered investigations by the U.S. attorney and the SEC.
  Former Auditor Ed Ryan, who held the job for more than 20 years, declined comment through his attorney. 
 Gary Caporicci, a partner in a firm that certified San Diego's 2003 books in an audit that city officials never made public because of the pension-deficit disclosure problems, did not return a telephone call seeking comment.
  City Attorney Michael Aguirre said the "creative accounting ... destroys our financial statements for 2002."
  "It doesn't look like any of the bondholders are going to be damaged," he added, "but it's certainly something that can be taken into consideration by the SEC."
 Torell said the errors accumulated over the past two decades and appear to be unintentional. However, he said, they should not have been made in the first place and should have been caught by the auditing firm of Caporicci & Larson and a firm it acquired in 2003 that had won San Diego's auditing contract 10 years earlier.
  "It shows oversight maybe bordering on lack of due care," Torell said.
  Caporicci has said a city's financial statements are never free of mistakes. The comment appeared in a July 15 report by a law firm that interviewed him while investigating possible illegal acts related to San Diego's financial disclosures.
  "The issue is whether the mistakes render the financial statements materially misleading, and (Caporicci) believes that was not the case with San Diego's (fiscal year 2002) financial statements," the report stated.
  Steven Feinstein, a professor of finance at Babson College, a well-regarded business school near Boston, said it's not uncommon for corporations to restate their finances but fairly unusual for a big city to do so.
 However, he said, San Diego bondholders could file securities lawsuits only if their bonds fell in value, and they could win in court only if they proved the drop stemmed from the city's financial revelations.
Restating assets a setback for city
  Arnold Rosenberg, a professor at San Diego's Thomas Jefferson School of Law who teaches commercial transactions and bankruptcy, said the latest revelations will at the very least draw the attention of investors if San Diego bonds begin trading at a loss on the secondary market.
  "They are certainly going to consider demanding their money back," he said.
  In that situation, Rosenberg said, a blame game between the city and its independent auditing firm could escalate.
  "The auditors may try to pin the blame on the city," he said. "But, of course, the job of an auditor is to look behind the numbers provided by the city and verify them."
  Deatty, the dean of accounting at USC, said skepticism is an auditor's best trait but that it can only go so far.
  "There are limits to the technologies of auditing and there are limits to how much society is willing to spend to have auditors check every transaction," Deatty said.
  Yet, because of the unusual circumstances, he said he wasn't surprised by the money and time being spent by KPMG and the city on the 2003 audit.
  "The auditing firm is looking under every stone right now, and the SEC is going to do the same type of investigation," Deatty said. "And you may discover that some of these things were simple mistakes and some of them may be a lot more serious."

Transition committee: San Diego's change to strong mayor moving too slow
By DOUG SHERWIN, The Daily Transcript,  September 14, 2005
 A citizens group charged with helping oversee the city of San Diego's transition to a strong mayor form of government is critical of the city's progress, but city officials are confident it will get done in time.
 In a memo to the City Council Transition Committee on Wednesday, the Citizens Advisory Committee vocalized its displeasure that legislators canceled a transition meeting scheduled for Thursday and laid out several issues that need immediate attention.
 "The Citizens Advisory Committee views the cancellation of the 9/15/05 meeting of the council transition committee with serious misgivings, given that very few council working weeks remain to satisfactorily resolve outstanding transition issues," the memo stated.
Councilman Scott Peters, who heads the City Council Transition Committee, isn't concerned.
 "I think we're in good shape," he said. "All the policy decisions to implement the transition have been made with the exception of redevelopment. They have been sent to the City Attorney's office (for review) and should move on to the full council in October. We should be able to adopt everything we need well before (the deadline)."
Proposition F, a ballot measure that was passed by voters last November, established the strong mayor form of government. It is set to take effect Jan. 1.
 The measure essentially grants the mayor's office executive power and breaks it away from City Council, which represents the legislative branch.
 The Citizens Advisory Committee wants the newly formed offices of the independent budget analyst and legislative analyst staffed soon, stating that "failure to meet the October deadline for filling these positions will seriously hamper the effectiveness of the City Council to do public business in the new year."
 Peters said it's tough to fill those positions before they are created.
"The key is to get the analysts," he said. "We've begun the process to hire an independent budget analyst."
 The Citizens Advisory Committee also recommends the retention of Dewey Square Consultants to develop a report on best practices regarding the early monitoring of Proposition F implementation.
The citizens group wants introduction of final transition legislation to be docketed for the Oct. 17-18 City Council meetings with a Nov. 1 deadline for final passage.
 "This timing provides leeway for last minute debates/adjustments to unresolved questions and avoids last minute confusion and turmoil," the memo said.
 All changes that require resolutions to the municipal code must be approved by City Council by Nov. 15. That would allow time for the revisions to become law by Jan. 1. Once passed, a resolution is held for 30 days until it becomes effective.
 "I feel we were far behind before the (legislative) break," Peters said, adding, "We caught up and now it's a matter of writing out the rules and making sure we're informed before we vote in October."
Redevelopment is the only sticking point. By state law, redevelopment decisions are under the control of the Legislature. Under the new format, the mayor will no longer be a part of the Legislature.
"The challenge is to find a way to get the mayor (involved) in redevelopment," Peters said. "I think that's important and has citywide significance."
Send your comments, douglas.sherwin@sddt.com

City has sold land many times – and for many reasons
By Jonathan Heller, UNION-TRIBUNE, June 4, 2005
 The city of San Diego has sold off land holdings in the past for a variety of purposes – from helping attract business to erasing a tragic memory. Most of the sales had little or nothing to do with rescuing the city from fiscal crises.
  In the city's humble beginnings, during the 19th century, selling land was one of the few methods available for raising cash. Entrepreneur Alonzo Horton purchased 800 acres from the city for roughly 33 cents an acre in 1867, then resold it parcel by parcel. Today, that area is downtown San Diego.
 One of the best-known modern examples actually netted the city no cash. Voters approved Proposition D in 1958, giving the city the authority to donate 450 acres of "pueblo lands" on Torrey Pines Mesa to the University of California for a San Diego campus. "Pueblo lands" refers to public property originally granted during Spanish rule.
  The city made it a somewhat common practice to sell land in the late 1970s and early 1980s to private corporations to try to boost the economy. For example, it sold 2.7 acres in Torrey Pines to Nucorp Energy Inc. for $2.37 million in 1981, when Pete Wilson was mayor.
 Former Councilman Fred Schnaubelt often criticized those sales, saying the city was underpricing its land in its zeal to attract top-drawer companies. In one case, Schnaubelt, sitting in a committee meeting, actually negotiated a higher price with a developer than the city staff had.
  On two occasions, the city has unloaded little-used land on its northern border to allow North County growth.
 In 1987, the council, led by Mayor Maureen O'Connor, sold 266 acres near what is now Westfield Shoppingtown North County to the city of Escondido for $11.4 million. The sale cleared the way for a public golf course and about 530 homes.
  In November 1999, when Susan Golding was mayor, the City Council sold 26.1 acres in the San Pasqual Valley to the San Pasqual Union School District for $366,500. The district built a school for kindergarten through eighth grade.
 Dealing with a tight budget in 1988, O'Connor and the council decided to redevelop an abandoned Sears department store in Hillcrest. The council sold 12 acres on Cleveland Avenue near University Avenue for about $10 million to Odmark Development Co. and Oliver McMillan Inc. The companies built a $65 million housing and shopping complex called the Uptown District. The deal involved little or no profit for the city, but the cash infusion helped balance the city's $805 million budget that year.
  Another land sale was meant for healing, not profit. In 1988, the city sold a three-quarter-acre plot in San Ysidro to Southwestern College for $40,000. The land was the site of a McDonald's restaurant where, in 1984, 20 people – including children – were massacred by a gunman, whom police then killed. McDonald's had razed the restaurant and given the land to the city for free.
  Then there was the big sale that never happened: In 1990, the city considered selling Brown Field in Otay Mesa to a private developer to solve a $60 million budget shortfall. The sale never went through.

Intent to Deceive
By Don Bauder, San Diego Reader, April 21, 2005
 San Diego is known for both big and small stock-market scams. Peregrine Systems is a big half-a-billion-dollar scam -- right up there with Enron, WorldCom, et al. But San Diego is also called Pump-and-Dumpsville because it has spawned so many pump-and-dump scams, in which small-time rascals manipulate small-capitalization stocks to fleece small investors.
 The similarities between a big scam like Peregrine and a small pump-and-dump are eye-opening. So are the differences: the small-time wrongdoers are punished quickly. That's not true with the big fellows.Late last month, the U.S. attorney's office in Los Angeles unsealed a criminal grand-jury indictment against stock promoters charged with pumping up (artificially inflating) a San Diego stock via Internet hype, then dumping it (selling off shares) for fast profits. In an earlier civil case, the Securities and Exchange Commission, calling it "a classic pump-and-dump scheme," had penalized most of the perpetrators and enjoined them from future stock manipulations.
  The stock was New Energy Corp., now named Neco Energy. The stock currently sells for a nickel -- a far cry from the $10 it reached in January of 2002 after the pump-up. Marshall Algird Zolp, a Panamanian whom the Securities and Exchange Commission identifies as "a recidivist securities violator and fugitive," has pleaded guilty to criminal charges and will be sentenced June 27, according to the Los Angeles U.S. attorney's office. He was helped in the caper by Geneva Financial Ltd., a purported bank he owns in the Caribbean tax and secrecy haven of Nevis. Zolp has been nailed on four previous occasions by the securities commission.
  He has several aliases.San Diegan Tor Ewald and his stepfather Ernest Paul Lampert were indicted last year, but the case had been sealed until recently. Maintaining that they are not guilty, they go to trial September 6. Lampert, a fugitive hiding in Mexico, was arrested in San Diego last December. He, too, is in custody. Ewald is out on bond and, as far as I can determine, is still an officer of Neco. (It is hard to find reliable information on Neco because it trades on the pink sheets -- thinly traded stocks that don't meet listing requirements of major exchanges -- and does not file financial reports. I haven't been able to rouse the company by phone.)
 According to the criminal complaint, Zolp, Ewald, and Lampert pumped up New Energy stock by getting a supposedly independent research organization to post a bullish review on an Internet website. It falsely claimed that New Energy had more than $50 million in orders for solar generators; that the company had a "virtual lock" on its market; that it was a partner with the Los Angeles Department of Water and Power; and that it had a $92 million contract with Coca-Cola bottlers in Mexico. Moreover, the trio allegedly helped create and approve a press release falsely claiming that New Energy had signed a ten-year contract with the nation's third-largest agricultural packaging concern, Teixeira Farms. The alleged perpetrators even invented a quote by the company's president.
  Ewald is charged with lying under oath to conceal the participation of his fugitive stepfather Lampert. According to Ellyn Lindsay, the prosecutor, Lampert had gone to prison in the early 1990s for fraudulently selling energy investments in the Bay Area.
  "He had walked away from a ten-year prison sentence after serving only a couple of months," she says. Lampert is charged with essentially running New Energy from Mexico and also participating in the false news release. I asked her how she knew Lampert ran the company. "Everybody said so," she says, but won't comment further because the evidence is not in the public record.
  Did Lampert write that news release? "Whether he wrote it or was just aware of it, he was part of having it issued," she says.
  From December 18, 2001, to January 9, 2002, the stock rose from $4.75 to $10. Zolp sold 42,000 of his 800,000 shares during the period, raking in around $400,000, according to the federal government. Some of the money wound up in a bank account controlled by Lampert while he was a fugitive in Mexico.So, the alleged rogues really didn't sell that many shares and didn't pick up much money.
  Contrast that with Peregrine: from April 1999 to February 2002, corporate sales were artificially inflated by half a billion dollars, according to investors who have filed civil suits to recover some of their losses. During the fraud period, the stock zoomed from $17 to $79.50, as the company boasted on the Internet of wonderful sales increases and product successes.
  Officers and directors bailed out of $580 million of stock during that period, even though the company's lawyer warned them not to do so because they had material information that ordinary investors did not have. Beginning at the stock's public offering in 1997, the stock soared from a split-adjusted $2.75 to $79.50, and chairman John Moores sold more than $650 million of stock, almost all he controlled. Other officers and directors jettisoned their shares, too.
 Some officers and outside service providers have been charged criminally in the Peregrine scam.
  But so-called outside directors, who sold by far the most stock, have not been charged, and judges in civil suits are giving them every benefit of the doubt and then some. Alas, the old American standard of justice applies: the more money plucked from investors, the easier it is for the pluckers to escape liability.
  In late March and early April, two San Diego judges hearing Peregrine civil suits issued astonishing rulings -- astonishing even for San Diego courts. Superior-court judge Joan M. Lewis, hearing a case brought by the litigation trustee appointed by the Peregrine bankruptcy court, ruled that investor claims on insider trading would have to be heard under Delaware law, not California law, because the company is incorporated in Delaware.
  Since 1968, California has had tougher laws than other states and the nation on insider trading: corporate insiders can't dump stock if they have material information that the public does not have.
 The key is that a company based elsewhere must conform to California law. The litigation trustee's suit pointed out (as do other civil suits against Peregrine officers and directors) that the board members were told repeatedly that the company was not doing well, despite its claims to the contrary; it was secretly using an unusual accounting method to meet Wall Street's quarterly expectations; its auditor was nervous about accounting irregularities; regulators were cracking down on practices employed by Peregrine, and the like.
  Yet, insiders dumped their shares. Under Delaware law, the plaintiffs would have to prove that the directors had an intent to deceive, manipulate, or defraud -- a higher bar to jump over than showing that they sold their stock having negative nonpublic information.
  San Francisco attorney Robert C. Friese, a court-appointed attorney, will submit an appellate writ to reverse Lewis's ruling that Delaware incorporation outweighs California's ability to assert its laws. Meanwhile, he will pursue the other claims in the suit.
  However, in federal court on March 30, Judge Roger T. Benitez issued an opinion on a case that consolidates 31 individual cases. Despite the board's knowledge of Peregrine's dubious accounting and failing business, as well as its knowledge of a pending merger that would affect the stock, Benitez repeatedly declared that there was no intent to deceive.
  Although directors such as Moores reviewed misleading news releases and signed untrue filings with the government, the judge saw no intent to deceive. Moores's stock sales "do not appear unusual or suspicious," says Benitez, even though Moores dumped 94 percent of the stock he owned during the period the books were cooked.
 At another point, the judge avers, "Moores received at most $53 per share -- far below the peak price of $79." Huh? Does the judge think everybody sells at the peak?
  The plaintiffs brought forth convincing evidence that Moores essentially ran the company. Benitez didn't find it sufficient.
  He did find evidence of negligent board performance. He could hardly have found otherwise. But that only helps people who got Peregrine stock as a result of a Peregrine acquisition. "Under both the federal and state rulings, people who acquired their stock directly have no claim," says Sol B. Cera, the San Francisco attorney handling the case. He will appeal or amend the case. "The wrongdoing is too serious.
  The idea that there is no vehicle for the injury suffered is unacceptable. We will fight as long and hard as it takes."There is a possibility that these judges' astounding decisions will be overturned as the cases move forward. In the meantime, the message is clear: don't pump small and dump small. Bigger is better. 

The port opposes Ballpark Village
By Ronald W. Powell, Union Tribune, May 11, 2005
  A proposed $1.4 billion development east of Petco Park that supporters liken to New York City's Rockefeller Center is meeting opposition from the San Diego Unified Port District and waterfront interests that see it as a threat to maritime-related businesses.
 The 7.1-acre development, called Ballpark Village, is proposed by Lennar Homes and JMI Realty, the development company of Padres owner John Moores. It would have five towers, with at least two rising more than 40 stories, and include 1,350 condominiums and apartments, plus offices, retail stores and a hotel.
  A committee of the Centre City Development Corp., the city's downtown redevelopment agency, is scheduled to vote today on the proposal, with the agency's full board likely to vote on it later this month.
 The City Council could vote on the project by July and, if approved, construction could start this year. 
  Port District President Bruce Hollingsworth said he is concerned that the proposal calls for developing residential towers on the land closest to the port's 10th Avenue Marine Terminal.
 Over time, he said, the residents living in what will be expensive condominiums and apartments probably will tire of the traffic, noise and view of the industrial activities and begin agitating for closure of the terminal.
  Hollingsworth said residential development has sprouted alongside ports or industrial property in other parts of the country, and he does not want to see that happen here.
  "We're not trying to stop JMI from developing the property," Hollingsworth said. "We just want them to consider building the 40-story towers further back in the development and away from Harbor Drive."
  The condominiums may range from below $200,000 to more than $2 million, a project spokesman said.
  Ballpark project
A master plan for Ballpark Village, a project by Petco Park, will be discussed today at a meeting of the Real Estate Planning and Projects Committee of the Centre City Development Corp.'s board of directors.
When: 4 p.m., Where: 225 Broadway, 11th floor.
  Hollingsworth said, "When you have 1,500 or so people in an area across the street from railroad or industrial uses, there will come a time when they won't want to look at those uses. In the long run, they'll say, 'Get out of here. We don't want you around anymore.' "
  The Port District, the Navy and several of the largest waterfront businesses, including National Steel and Shipbuilding Co., have sent protest letters to the downtown redevelopment agency, which has negotiated the development terms for Ballpark Village. They want the agency to conduct a new environmental report on the propose development instead of amending an old report, as is planned.
 Some of the business people are worried because Moores has said the 10th Avenue terminal does not do enough business to justify its existence, and he advocates the Chargers' using the site for a football stadium, an idea the team has rejected.
  Moores also has hired as a consultant former state Sen. Steve Peace, who downsized the Port District when he was in the Legislature.
  1999 report
Peter Hall, president of the Centre City Development Corp., said Ballpark Village and its effect on the area were taken into account in an environmental report prepared in 1999 and that a new one is not needed.
  Port officials commented on the 1999 environmental report and did not raise objections to residential development, Hall said.
 He also pointed out that the port has approved construction of a 1,200-room Hilton hotel to serve the San Diego Convention Center next door to the 10th Avenue terminal.
  "What they're doing is whooping and hollering now," Hall said. "I think this is more political than anything else."
  Charles Black, JMI's executive vice president, said the worries are misguided.
  "They're good people and important to San Diego's economy," Black said. "But what you're seeing is hysteria and paranoia on the part of the port and its tenants. This project does not pose a threat to them."
  The clash of government agencies is over two pieces of property near San Diego Bay where the development would be built.
 The larger portion is a 3.9-acre triangle bounded by Park Boulevard on the west, 12th Avenue on the east and Imperial Avenue on the south. The remaining 3.2 acres is a rectangle south of Imperial Avenue on Park Boulevard.
  The master plan proposes 3.2 million square feet of development. When completed, it would generate an estimated $20 million a year in property, sales and hotel room taxes, according to the redevelopment agency.
 John Kratzer, president of JMI Realty, said Ballpark Village is part of the commercial development that was planned in the East Village around Petco Park, which opened last year.
  Building heights would range from about 10 stories on the northern edge of the development to 42 or 43 stories on the southernmost part of the property closest to the marine terminal. Five towers are planned, and the design requires that no two look alike.
 The project would have 2.2 million square feet of housing, at least 300,000 square feet of office space, 150,000 square feet of retail space, including a grocery store, and a hotel of at least 150 rooms.
  A portion of the housing would be set aside for affordable residences, but a specific amount hasn't been decided.
  "It's going to be a world-class project," Kratzer said.
  To make the development distinctive, JMI held a design competition last year that attracted 44 architectural and design teams across the country. At the conclusion of the 10-week contest, the Los Angeles firm of Johnson Fain was selected.
  "The reality is we're looking to create a destination like Rockefeller Center in New York," Kratzer said.
Conflicts seen
But waterfront businesses say homes in the area won't make for good neighbors.
"I think the encroachment of residential on a major industrial area is the beginning of the end of industrial," said Patti Krebs, executive director of the Industrial Environmental Association. "It is sure to cause conflicts."
  The public policy association, which promotes reasonable and cost-effective environmental laws and regulations, is privately funded by 50 manufacturers in San Diego County, many of them on the waterfront.
 She said homeowners will not like the 24-hour operations of a working port – the lights, the noise, the traffic.
  "It might deter day-to-day industrial operations and prevent future expansion," Krebs said. "We see the waterfront as vibrant and growing."
Krebs sent a letter last week to the Centre City Development Corp. requesting that it conduct a new environmental study on the project.
 The Port of San Diego Ship Repair Association and the San Diego Bay's Working Waterfront Group, which includes NASSCO, the U.S. Navy and the Port District, sent letters making the same request.
  Krebs said waterfront groups would prefer the project's office and commercial uses, rather than residences, be built nearest the port's terminal. The offices and commercial enterprises would serve as a buffer between residents and the industrial areas, she said.
  "I think a transition area makes sense," Krebs said.
  George Palermo, chairman of the Port Tenants Association, said there is concern among the more than 200-member group about Moores' project, in part because the Padres owner has hired Peace.
 Peace sponsored legislation that led to the January 2003 separation of Lindbergh Field from the Port District, and they fear he may try to shut down the 10th Avenue terminal, Palermo and others said.
  Peace said he is working on several "eclectic" projects for Moores, including tasks involving the University of California Board of Regents, on which Moores is a trustee. None of his work involves the 10th Avenue terminal, he said.
  "That's just paranoia," Peace said.

Figures Detail Controversial Pension Benefit Purchased by Murphy, Several Council Members
By ANDREW DONOHUE, Voice Political Writer, April 22, 2005
<http://www.voiceofsandiego.org>
 As San Diego Mayor Dick Murphy and the City Council attempt to manage the city's oppressing pension deficit, they will also be navigating another potentially tricky passage: their own financial interests in the system.
 Like any other city employee, the mayor and eight council members put their financial future in the pension plan. But the legislators stand in the unique position of being asked to come up with a way to shrink the retirement system's $1.37 billion deficit; one solution that many, including some on the council, point to is the reduction of current benefits.
 One of the benefits drawing the most attention from critics is the purchase of service credits. It is a benefit that allows employees to purchase years of work service at a price substantially subsidized by the city. It is one in a long list of factors contributing to the pension debt.
 Six sitting City Council members and the mayor have purchased credits at sizable discounts. The politicians are just a handful among the 2,900 employees that City Attorney Mike Aguirre says have purchased 13,000 years of service at an estimated cost of $120 million to the system. Council members Michael Zucchet, Toni Atkins, Brian Maienschein, Donna Frye, Jim Madaffer and Ralph Inzunza all purchased the benefit.
Aguirre calls the benefit illegal because employees receive much more than they put into the system. In relation to the benefit, he is currently investigating whether the mayor and council violated statutes that forbid public officials from voting on items in which they have a financial stake.
 A retiree's annual pension is based on a formula that includes their years of service to the city as one of the key factors; the more years worked, the more dollars received.
  By purchasing years of credit, employees can add years to this formula without actually having worked them. The system's actuary determined in 2002 that the credit benefit -- created in 1997 -- cost the pension system significantly. Its terms were eventually changed in late 2003.
 For example, Murphy purchased a total of five years of service, beginning in mid-2002, the time he and council members began receiving reports of the struggling pension system.
 According to calculations based on information received in Public Records Act requests from the San Diego City Employees' Retirement System, the mayor paid a total of $71,760 for the five years of credit.
 Those five years would alter his retirement equation drastically.
 Assuming Murphy finishes his term in office, he will have worked 12 years for the city, eight as mayor and four as a councilman in the 1980s. Using that assumption, he would retire with an annual city pension of $42,000 a year.
 However, add his five years of credit and that annual pension jumps to $59,500 -- a difference of $17,500 a year. Once he retires, it will take Murphy, who is 62 years old now, slightly more than four years to make back what he spent. After that, the pension system -- and to no small degree, taxpayers -- will be responsible for his augmented payment until he stops receiving a retirement check.
 While Murphy's original investment will likely earn money in interest and investments for the pension system, the pension's actuary determined the credit to be a substantial subsidy for employees in 2002. He lobbied twice to have its terms adjusted. The pension board rejected his first attempt, but the purchase price for the credits was eventually increased significantly in late 2003. No council member has purchased them since.
 A majority of the council members stand to benefit similarly. Assuming that each council member simply finishes out their current term in office, never works for the city again and never receives a pay increase, here are the figures based on statistics provided by the pension system:
-- Atkins purchased more than five years of service in 2003 for nearly $59,000, which will boost her annual retirement check by $13,700 to a total of $47,800 annually. It will take her about four-and-one-third years to recover the money invested. She worked for the city for almost seven years as a council aide and just began her second term in office. If she completes the term, she will have worked a total of 15 years for the city. Council members are forbidden from serving more than two terms. Atkins didn't return a phone call seeking comment.
-- Inzunza purchased 4.67 years of service for $50,300 in 2002, adding an estimated $12,300 a year to what would have been about a $20,000 annual retirement payment. It will take him about four years to cover his investment. Inzunza worked as a council aide for more than three-and-a-half years. He took office in a special election in 2001, won again in 2002 and is up for reelection in 2006. By that time, he will have worked for the city for a little more than 13 years.
-- Madaffer bought five years of credit in 2002 for $53,800. The purchase would enhance his annual pension check by $13,200 a year, upgrading a $34,000-a-year pension to $47,200. He worked as a council aide for nearly seven years and recently began his second term in office. Madaffer was traveling and unavailable for comment.
-- Zucchet purchased almost three years of credit for a total of $33,100 in 2003. The move takes what would have been a $12,900 annual pension to $20,700. Zucchet worked more than a year as a council aide, was elected in 2002 and is up for reelection in 2006. He didn't return a call seeking comment.
-- Frye bought 1.83 years of service for $20,700 in 2003. As a result, she is slated to receive an extra $4,800 a year for a total of $18,000. Frye won in a special election in 2001 and again in 2002. She'll be up for reelection in 2006.
 Frye has written pension administrators to try and quantify the value of her purchase. "Whatever I receive, I want to make sure I've paid for -- and fully paid for -- and if I have not done that, I plan to correct that and understand it," Frye said.
  If it's determined that there's an imbalance, Frye suggested paying more into the system or having her credits devalued to reflect what she's paid.
-- Maienschein purchased .92 years of service for $9,900 and will receive a boost of $2,400 once retired, bringing his total estimated annual pension to $23,500. He recently began his second term in office and didn't return a call seeking comment.
 The above calculations assume that none of the council members will begin collecting retirement before age 55. At the time it was purchased, one year of credit cost general employees 15 percent. That number was adjusted to 27 percent in late 2003 for general employees and 50 percent for elected officials.

City's Lack of Cooperation with SEC Probe Could Have Serious Consequences, Commission imposes penalties based on cooperation; city's found to be short
By ANDREW DONOHUE, Voice Political Writer, March 17, 2005
 When federal officials called city of San Diego leadership into a secret meeting two weeks ago, the investigators scolded city officials for a lack of cooperation with ongoing investigations. While it seemed like nothing more than a juicy tidbit at the time, the detail could prove to be a crucial factor that shapes the severity of potential sanctions against the city.
 A review of the SEC’s model case and a number of other cases before the commission reveals a definite pattern: An entity’s level of cooperation directly corresponds with the penalties levied against it.
 The review also shows what securities lawyers say are large gaps in the city’s cooperation, from the timely turning over documents to the very law firm hired to investigate its accounting practices. The consequences could endanger the city institution all the way to the taxpayers.
SEC officials don’t comment publicly on ongoing investigations. But Paul Berger, associate director of enforcement at the SEC, bluntly defined the commission’s stance on cooperation in May when charges of accounting fraud were levied against Lucent Technologies officials:
“Companies whose actions delay, hinder or undermine SEC investigations will not succeed. Stiff sanctions and exposure of their conduct will serve as a reminder to companies that only genuine cooperation serves the best interests of investors.”
 The company was ordered to pay a $25 million fine for its failure to abide commission wishes.
 Timely cooperation is key
 Time and again SEC cases reveal that when an entity cooperates fully, only specific individuals receive sanctions while the entity is spared. However, when cooperation falters, the files show a long record of multi-million dollar fines and other sanctions handed down to the institutions as a whole, in addition to individual charges.
 The SEC consistently and prominently stresses the importance of cooperation in its documents.
 “So the carrot is also a stick, and they will beat you with it,” said Ed McIntyre, a securities attorney with the firm Solomon Ward who offered a bleak assessment of the city’s cooperation to date.
 Indeed, in his first public report last week, the city’s hired disclosure expert Lynn Turner, a former SEC accounting chief, said federal officials were “making it very clear that there would have to be a high level of cooperation due to what had been a lack of cooperation that had ‘had an effect on their investigation.’”
 The SEC has been investigating errors and omissions in the city’s financial disclosures to investors for more than a year, and the U.S.  Attorney’s Office is looking into possible public corruption.
Seaboard Corp. is a model case
 The model case held up by the SEC, the regulator of public financial markets, to all entities with disclosure and accounting problems is that of Seaboard Corp., a conglomerate company with holdings in agriculture, shipping and energy.
Because of Seaboard’s rapid cooperation, no action was taken against the company. Instead, proceedings were only taken against its controller for manipulating its financial records.
 “My sense is overall they [city officials] have not demonstrated the type of cooperation that Seaboard calls for. That’s kind of a baseline. That’s where you start with the SEC nowadays and go from there,” said Bill Sullivan, national chairman of firm Paul Hasting’s securities litigation practice.
The record for non-cooperation is clear. During the past three years hosts of corporations such as Banc of America Securities, Xerox Corp., Halliburton Co. and Dynegy Inc. all faced multi-million fines for lapses of cooperation.
 “If companies wish to receive the maximum benefit from their cooperation, the cooperation must be complete and meaningful from the outset,” according to SEC documents in the Dynegy case. Company officials eventually cooperated, but didn’t self-report and at first made public statements denying allegations, according to SEC documents.
While they head a municipality and not a corporation, city officials have been advised to study Seaboard officials conducted themselves and are likely to be held to many of the same standards as a corporation. It is the first case of municipal securities a post-Enron era rife with cases of financial malfeasance.
 To measure the city’s level of cooperation, Voice of San Diego identified six key steps taken by Seaboard officials that gained them good grace in the eyes of regulators and compared these efforts with the city’s known actions to date.

Strong mayor switch slow to take shape
By KEVIN CHRISTENSEN, The Daily Transcript, March 31, 2005
 Officials are not paying enough attention to how the city will operate after the switch to a strong mayor form of government, said the head of the citizens' committee on the transition.
 "The City Council and mayor are obviously so distracted that they haven't recognized how much policy making has to be done," said Norma Damashek, chairman of the Citizens Advisory Committee for Strong Mayor Government Transition 2005.
 "If there is no earthquake, we might be able to pull together the bare bones of the new city government," she said.
The city is scheduled to switch to the strong mayor form of government on Jan. 1 for a five-year trial period.
Many of the changes will have to be sketched out by July 1 -- the day the city passes the fiscal year 2006 budget -- to ensure that each new department has enough money, Damashek said.
Under the new provision, which was passed in the Nov.2 election as Proposition F, the changes to the city charter will dramatically change functions and political dynamics in City Hall.
 # The mayor retains veto power on resolutions and ordinances adopted by the City Council-established policy.
 # The city manger's office will fall under the mayor, which is responsible for preparing the annual budget for the council's consideration and adoption.
 # The council will appoint an Independent Budget Analyst and Legislative Analyst to review and provide information to the council, independent from the mayor.
 # The council will also choose new committees and elect a City Council president.
 Damashek said key offices will need to be broken up to support the office of the mayor and potentially split to assist the City Council in their duties.
 The proposition did not outline any support structure to replace the role of the city manager's office for the City Council.
The city manager is frequently directed by the City Council and the mayor to research issues, author detailed reports and make suggestion on policy decisions.
"We have no idea what these offices will look like, how big they are going to be, and whether we are going to need to break up the city manager's office," Damashek said. "Prop F did not provide for that. It left the council bare."
Time is running out to get a basic idea on how this will look, said Audie de Castro, a member of the committee.
"To be honest, we may be a little behind, so there should be a sense of urgency in the city," Castro said. "We are going to have to make a real push."
 The citizens committee is scheduled to meet at 11 a.m. Friday to discuss the formation of an office of budget analysis that will help the City Council analyze budget documents prepared by the mayor's office.
 A 25-page report has been issued by a city-hired consultant, the Washington D.C.-based Dewey Square Group.
"It is a fairly general review of the other cities that operate the office in similar functions," Castro said.
 One of the biggest criticisms is that, despite all the work that will need to occur before the transition to strong mayor, the mayor and council have far too much time off for legislative recess.
 "We need to make adjustments in legislative breaks in order to get their work done to create this new government," Damashek said. "If someone expects a miracle, this is not going to happen."

Sports Arena naming-rights deal raises eyebrows for those with their eyes open
by Daniel Strumpf, City Beat, March 31, 2005
It’s not what was said but what wasn’t at a recent San Diego City Council meeting that’s creating a stir among city insiders and observers.
On March 14, the City Council approved granting naming rights to the city-owned Sports Arena to IPayOne, a local real-estate company. At the time, City Council members and citizens were concerned because a 1996 contract with the Sports Arena Group 2000, the private company that operates the facility, kept the city from partaking in 90 percent of the $2.5 million created by the five-year deal.
But it’s the news that two members of the Arena Group’s board of directors—Sports Arena operator Ron Hahn and San Diego real estate magnate Doug Manchester—are also stakeholders in IPayOne that’s getting the attention now.
That the seemingly cozy deal caused nagging yet publicly undisclosed concerns for some city officials, and that Hahn and Manchester’s business interests—disclosed in background information provided to the City Council—went unnoticed by others, is fueling criticism that the City Council, already besieged by the city’s financial crisis, once again failed to do their due diligence.
Even those close to the deal say that given the current intrigue at City Hall and the interests of the players, they expected extra scrutiny and made an extra effort to mitigate conjecture. Hahn, who is on IPayOne’s board of directors, said he disclosed all of the stakeholders in each company, as required by the city charter, and excused himself from subsequent negotiations, turning the matter over to his son, Ernie Hahn, the general manager of the Sports Arena.
IPayOne president and CEO Sal Benti said the companies took additional steps to avoid controversy, like hiring a consulting firm to assess the value of the naming rights.
“We were very cautious… so that nobody could point the finger and say that was a cozy deal,” he said. “The [City] Council never asked for that type of information from either the Arena Group or IPayOne.”
But City Councilmember Michael Zucchet, whose district includes the Sports Arena, said Hahn and Manchester’s dual interests did raise some questions, and they were brought to Carrie Gleeson, a deputy city attorney, on the morning of the vote. Zucchet said he received a two-part answer.
“First, it was that [the city attorney’s office] didn’t like getting into the business of determining other people’s conflicts,” he said. “What we got out of them, and a lot of this was verbal… was, basically, if there is a conflict, it’s not with the city. It would be between IPayOne and the Arena Group 2000… and it wasn’t really the city’s issue… and that’s where I left it.”
Gleeson could not be reached for comment. Contacted by CityBeat, City Attorney Mike Aguirre said he was unaware of Hahn and Manchester’s dual interests or any related opinion issued by his office.
“I have now reopened this as an issue. There is no formal position that has been taken by the city attorney on this matter,” he said. “We will review it and take appropriate action.”
As of press time, both of the Hahns and Benti, who estimated the media exposure IPayOne will gain from the naming rights is worth $5 million annually, had not provided CityBeat with a copy of the naming-rights valuation despite promises to do so. It was also unclear whether the document, paid for by the Arena Group, had been provided to the city, making it a public document.
But City Hall watchdog Carl DeMaio said he’d like a copy to ensure the deal incorporated the true value of the arena’s naming rights. And City Councilmember Donna Frye, who was out of town on the day of the vote, said that while she can envision a public-perception problem, she can’t see any obvious improprieties in the deal. However, she’s looking to Aguirre for answers.
“Whenever you are dealing with any kind of public land,” she said, “there are always going to be questions raised, and there should be. At least have a discussion—I don’t think there is any harm in that.”
It’s something the dealmakers say they now wish had happened.
“All I can tell you is everything was done at arm’s length with full disclosure to avoid exactly what some people are looking at right now,” said Ron Hahn, “and, frankly, they’re looking at everything the city does because they don’t ever seem to do anything right.”

A team of attorneys suggested that the city's retirement system seek advice from the U.S. Internal Revenue Service to clear up questions over the agency's tax exempt status.
 The San Diego City Employees' Retirement System received the study but did not approve any action.
 As part of an agreement made in October 2002, the San Diego City Council allowed city employees serving as presidents of respective labor unions to accrue time in the SDCERS pension.
I n a memo dated Oct. 29, 2004, City Manager Lamont Ewell said that allowing unions -- which are not city agencies -- to contribute into the retirement system could jeopardize the system's good standing with the IRS. As a result, Ewell said the money from the unions is no longer being admitted.
 Robert Butterfield, attorney for Butterfield Schechtner LLP, advised the retirement system board of administrators to seek advice from the IRS.
Butterfield said that the IRS could revoke the retirement system's tax-exempt status. He noted, however, this rarely happens.

Fitch lowers city’s credit rate again
By Kevin Christensen, The Daily Transcript, February 16, 2005
 The city of San Diego's credit rating took another hit Wednesday by Fitch Ratings for failure to complete its 2003 audit and the recent political consternation that could obstruct progress.
Amy Doppelt, managing director for Fitch Ratings-San Francisco, said that despite the city's past strong financial performance, the current $1.37 billion pension shortfall, federal investigations, incomplete 2003 audit and political tensions raise concerns that solutions not will be created.
 "That means we are less confident with the numbers that we have and, as well, we have seen a lot of political strain within the city that seems to be impeding their ability to move forward," Doppelt said.
Fitch downgraded the city's:
* Approximately $46 million in outstanding general obligation bonds to "A" from "AA-";
* Approximately $250 million in lease-backed debts to "A-" from "AA-";
* Approximately $1.1 billion in sewer revenue bonds to "A-" from "AA-" and the $734 million in subordinate revenue bonds to "A-" from "A+";
* Approximately $290 million in certificates secured by a senior lien on water enterprise revenues to "A" from "AA-";
* Approximately $282 million in subordinate revenue bonds to "A-" from "A+".
 The ratings will remain on Rating Watch Negative to illustrate continued uncertainty. The lower rating means that if the city borrows money from the bond markets it will be more expensive, because of a perceived higher risk by investors.
 Last year the city's rating was downgraded by Fitch and later in the year, following the release of the Vinson & Elkins report, the rating was placed on Ratings Watch Negative.

Port asks for pension funds to be separated from city's
By KEVIN CHRISTENSEN, The Daily Transcript, February 16, 2005
 In a move to separate itself from what has been called a "sinking ship," the Port of San Diego Board of Commissioners asked to have their funds removed from the city's pension account.
Currently, the San Diego City Employees Retirement System, or SDCERS, is the administrator of one trust that includes the pension funds of the city of San Diego, the Port of San Diego and the San Diego County Regional Airport Authority.
 William A. Hall, chairman of board of port commissioners, issued a letter to the Administrator of SDCERS, Lawrence Grissom, outlining the desire to move the port's $141 million in retiree funds into a separate account and choose a separate board of administrators to preside. The letter is dated Feb. 15.
 "I've got a fiduciary responsibility to the employees of the port," Hall said. "We should also have the decision to make independent investment decisions on behalf of the employees."
Sylvia C. Rios, secretary for the board of port commissioners, said the port's pension money is a "drop in the bucket" for the $3.4 billion SDCERS system.
 The city is currently facing a $1.37 billion deficit in the pension.
Hall specifically said that one of the primary motivators is protection of port retirees if the city should declare bankruptcy.
During bankruptcy proceedings a federal judge is appointed to make key decisions about agreements for the city that could include the redistribution of the pension plan, Hall said.
 "In the event that the city got into problems and the city went bankrupt, that would perfect the separation," Hall said. "It's highly unlikely the port funds would be put in jeopardy."
 The port commissioners requested a written response from SDCERS by Feb. 18.
 The deal would keep the funds under the operational control of SDCERS, but the money would be in a separate account and a different set of trustees would make decisions.
 Paul Barnett, assistant administrator of the retirement system, said he had just received the letter and that the issue would be discussed at a future board meeting.
 Barnett said three separate accounts are maintained for the three separate plan sponsors.
"The financial statements of each plan sponsor are maintained individually," he said.
The action would require a vote by the SDCERS board of administrators, Barnett said.
 Michael Conger, counsel for the San Diego Harbor Police Officers Association, said the move by the port board is two years too late to separate itself from the city's account, which he called a "sinking ship."
"I would caution them to move it at all dispatch because the employees that have their money there will hold the port accountable if anything happens," Conger said.
 Conger, who also successfully sued SDCERS to fully fund the pension in 2002, said the move illustrates that leaders throughout the city are beginning to "finally realize" that the city's finances may not be recovering.
 "I think this sends a message that anybody with half a brain realizes their pension money isn't safe when the city has massively underfunded and hasn't demonstrated that ability to dig out of the hole," Conger said.
Other members of the port board were not as openly critical as Hall or Conger, and touted the action as a prudent move to protect its retirees.
"Obviously there is a lot of discussion on SDCERS, we want to make sure that our employees and retirees' funds are absolutely secure," said Port Commissioner Stephen Cushman. "This isn't meant to throw any rocks, we simply believe that this is an appropriate time for us to create a separate trust."
 Port Commissioner Rios also said that the ability to make investment decisions is a good idea for port retirees.
"You have control in your investments," Rios said. "It's something that is long range and would allow total control, like steering a ship."
Cushman added that a new board of trustees could attain as good a return on investments as the current SDCERS board of administrators.
The airport authority, a sponsor in the SDCERS pension trust, has not discussed the possibility of having its funds removed, said Joe Craver, director of the organization.

Voice‚ Adds New Voice to Media Scene
San Diego Business Journal, Lisa Kovach, 2/9/05
Voice of San Diego, a nonprofit Web news and information source, officially launched on Feb. 9.
 The free news site, www.voiceofsandiego.org/ , was created by a team of journalists and community leaders, which includes Barbara Bry, a former political and business writer for the Sacramento Bee and the Los Angeles Times; Neil Morgan, a veteran writer with the San Diego Union-Tribune; Bob Witty, a former associate editor for the U-T; Gail Stoorza-Gill, the first chairwoman of the San Diego Regional Chamber of Commerce and former chief executive officer of Stoorza Communications; and Buzz Wooley, the president of the Girard Foundation.
 The idea for the publication came more than a year ago at a lunch meeting with Morgan and Wooley, where they discussed the challenges and opportunities facing the region.
 "We felt that there was a need for another voice in San Diego,"said Bry, the editor-in-chief of the publication.
The Internet-based publication promises independent, in-depth coverage of the most important issues facing the San Diego region, from Baja to the Orange County border.The news site will publish Monday through Friday and feature a wide range of contributors focusing on education, military, government, arts and culture, technology, health and sports.
 "Every day we will have new news stories and hopefully new columnists,"Bry said.
There will be more than 70 contributors to the paper, including some of the region‚s most respected civic, cultural, business and governmental leaders, Bry said.
 The financial backing of the publication has come from San Diego foundations and individuals, which have raised nearly $400,000 for the site.
 Bry said key topics for the next several weeks include an analysis of the changing political landscape in San Diego, perspectives on recent decisions by the San Diego Unified School District‚s board and a review of 30 years of Downtown redevelopment.
 The publication has six full- and part-time staffers.

County loses some live-here luster, More people moved out than in, state report shows
By Lori Weisberg, Union Tribune, February 8, 2005
 For the first time in eight years, more people left San Diego County than moved in from other parts of the country, according to population figures released yesterday by the state Department of Finance.
 Inland growth spurt
 In what is likely to be a foreshadowing of future population trends, the latest estimates show that San Diego County's population increase of nearly 42,000 between July 2003 and July 2004 was fueled entirely by local births and immigration.
 The bulk of the growth – 63 percent – was from natural increase, or the difference between births and deaths.
Last year's population increase also marked a turning point for San Diego County, which has passed the 3 million mark. Its population in July 2004 stood at 3,036,373.
 State demographers say San Diego County has been attracting fewer people from other states since 2000. Last year, however, was the first time this decade in which more people left for other counties within California than moved in from elsewhere in the state.
 Demographers say the migration is symptomatic of an overall flight from the state's coastal areas to the inland counties where housing is significantly more affordable than in coastal areas such as San Diego.  However, the county still grew at a healthy rate of 1.4 percent.
"It's becoming almost impossible to move here and own a home unless you have some equity built up, and our economy has been one of the greatest in the United States, but it hasn't been going gangbusters where we were adding 50,000 jobs a year," said Ed Shaffer, senior demographer with the San Diego Association of Governments.
 This inter-regional commuting between San Diego and neighboring counties will only get worse, he said, "because the housing prices aren't going down."
 While San Diego's net out-migration last year was a modest 613, it is in marked contrast from earlier in the decade, when anywhere from 4,200 to 19,000 more people moved here from other parts of the United States than left.
 The last time San Diego County experienced a net loss of population was in 1996, the Department of Finance said.
Although immigration continues to generate growth up and down the state, California's inland areas, such as Riverside County, are where most of the state's domestic migration is occurring.
 Between 2003 and 2004, Riverside County, with a population increase of 4.5 percent, was the fastest-growing in the state. It saw 55,000 more people move in from elsewhere in the United States than move out.
In contrast, Los Angeles and Orange counties, as well as those in the Bay Area, last year saw large numbers of people moving elsewhere, both inside and outside California.
 For example, in Orange County, where the median price of a home is substantially higher than San Diego, 10,000 more people moved to elsewhere in the United States than moved in.
 "When there was economic decline (in the early '90s), there was more a flight from the economy going bad," said demographer William Frey of the Brookings Institution in Washington, D.C. "I think this is the beginning of a continued trend away from the coast. It's a function of cost of living; it can't be the quality of life.
 "If this continues, prices will start rising even in the interior parts of the state. I can very well predict that."
Immigration, especially from Mexico, will continue to define San Diego's growth patterns, Frey said.
 "That brings in the idea of a two-tiered economy," he said. "The people in the middle who are moving out are the ones being squeezed by the high cost of living."
 That is borne out in a demographic analysis Frey prepared for The San Diego Union-Tribune, based on U.S. Census data that looked at movers between 1995 and 2000.
 Those most likely to leave the county, he found, are lower-and middle-income families who do not have a college education.
 Despite the latest state population figures, economist Alan Nevin doubts San Diego is experiencing a net loss of population to other California counties and states.
 "In this county, we sold about 65,000 homes in the last year," said Nevin of MarketPointe Realty Advisors, a real estate research firm. "You can't do that based on an out-migration pattern."

Memo: Pension board violated tax codes in accepting union funds
By KEVIN CHRISTENSEN, The Daily Transcript, January 12, 2005
The city of San Diego's retirement board president admitted the organization may have violated federal tax codes when it accepted union contributions to the pension fund, according to an Oct. 29, 2004 memo sent to City Manager Lamont Ewell.
The potential outcomes are disastrous, with the worst-case scenario being the pension system's assets -- estimated at more than $4 billion -- being taxed by the Internal Revenue Service, said Pension Board Trustee Diann Shipione.
To avoid that scenario, the city could be forced to return a decade's worth of union contributions to its pension fund.
The pension currently enjoys a tax-exempt status, however a union is a private institution in the eyes of the IRS, Shipione said.
The memo, sent from Lawrence Grissom, president of the San Diego City Employees Retirement System, notes that the pension funding method permitted by the San Diego City Council in October 2002 may violate federal tax codes.
The approved method allows union presidents to enroll into the San Diego City Retiree Pension System. Once the president is enrolled, the union becomes responsible for paying a pension contribution.
Allowing unions to pay a contribution into the city's pension system may present problems because "a union does not meet the tests specified by various Federal agencies as a governmental employer," Grissom wrote.
Grissom also wrote that the money should be returned or the system could lose its tax-exempt status.
"Accordingly, tax counsel has advised us that we should refund all such contributions to the respective unions," Grissom wrote. "It is their advice that to not do so, to continue to accept contributions from that source, or to pay benefits based upon contributions thus received, would endanger the qualified status of the plan."
Benefits would not be paid back until Nov. 15, 2004, "at the earliest," he wrote.
Union presidents enrolled in the city pension include Ron Saathoff, president of the Local 145, the International Association of Firefighters; Judie Italiano, president of the San Diego Municipal Employees Association; and Bill Farrar, president of the Police Officers Association; and Garry Collins, past president of the POA.
The issue raises the important question: If that union contribution money is not being put into the system and the union presidents are contractually guaranteed their pension checks, who pays the shortfall?
"This apparently had been happening for more than a decade," Ewell said in a prepared statement. "The City has no intention of allowing the tax code violations to continue. We will continue to work with the SDCERS Administrators to resolve the matter."
As of press time Wednesday night, Pension Trustee Grissom had not returned calls seeking comment.
In a release statement, Italiano said, "The suggestion of a possible tax issue is a disturbing development, but I am confident the city will honor its legal obligation to me and to others."
Carl DeMaio, founder and president of The Performance Institute, called for the immediate release of the salaries of the union presidents enrolled in the city system, a value of how much the unions have paid, and how much the city may be liable to pay back.
"We want to know that they are not holding on to the funds and mingling them with the city retirement system," DeMaio said. "We want to know that every one of the inappropriate contributions have been cleansed, that they have all been returned and accounted for."
Pension Trustee Shipione, in an interview, said she has never received a report from Grissom or the SDCERS' board that the union payments may be illegal.
"I'd like to get a copy of it," Shipione said.
This raises a red flag for many City Hall watchers.
"If she as a board member can't get this information, how does the public have any hope of seeing how these benefits are granted?" said Lisa Briggs, executive director of the San Diego County Taxpayers Association.
Shipione said, however, that the potential illegality of unions paying benefit contributions is not a surprise to City Hall or other members of the pension board.
Shipione issued a separate memo, on the same day as Grissom, to the city's outside auditor, KPMG, warning them of the violation. The memo was also addressed to Mayor Dick Murphy, members of the City Council, City Manager Ewell, and members of the SDCERS' board of administrators.
In her memo, Shipione said the pension system outside actuary, Mercer Investment Consulting, raised concerns about union contributions into the system and received no response.
"Mercer said that if the plan lost the tax qualified status, it's a disaster," she said in a Wednesday interview. "All of the assets in the plan, which is tax deferred, that becomes immediately taxable."
Both Shipione and Mercer echoed the same concern that the pension system has never been comprehensively audited to ensure compliance with federal, state and local laws.
Shipione also said SDCERS has never received, or apparently applied for, an Internal Revenue System Determination Letter to determine the tax qualified status of the city's retirement plan.
Briggs said this all illustrates the lack of transparency in the pension system.
They should have the attorney check this in 2002 because 2004 is a little late," Briggs said. "This goes to the overall concern that the Taxpayers Association has about how the benefits have been awarded, the transparency, and the overall health of the pension system."December 21, 2004, Union Tribune Letters to the editor
I have served on the retirement board of the city of San Diego for seven years. It is corrupt. I never fully appreciated this until the recent secret effort to arrest me, orchestrated by insider members of the board and legal staff.
The city attorney's demand to resume his role as chief legal counsel under the city charter and the municipal code is the last, and best, effort to bring this rogue group back to the service of the people of San Diego and the beneficiaries of the retirement system.
The "rejection" of City Attorney Mike Aguirre's legal role is a perfect example of what is wrong. Board President Fred Pierce and administrator Larry Grissom unilaterally, and immediately, rejected Aguirre's resumption of his role under the charter.
I am a trustee on the board, and I can assure you there was no board meeting, or board vote or any public discussion on this subject. In fact, there was no consideration of Aguirre's letter at all. The insider group of powerful interests and compliant staff that do not respect the Brown Act, or the people of San Diego, rejected this on their own, in private and in secret, just as they did when they planned to have me arrested. It reflects the anger of those few who have taken over this board and pretend to "own" the billions of taxpayers' dollars in the system, which they play as chips in their own personal political games.
I believe in the charter and the municipal code that confirms the city attorney as the chief legal counsel to the retirement board. He has my support and access to all the materials and information I can give him on behalf of the people of San Diego.
If the laws of this city and our resolve are not powerful enough to allow our elected attorney to represent our city's interests against the insiders running this board, expect only continuing mischief, comical arrests and mountainous taxpayer debts as this board bargains the city's future away for its own personal benefit.
DIANN SHIPIONE , Trustee sdCERS , La Jolla

Revelations, Frye, add to uncertainty about 'strong-mayor' proposal
By SCOTT LEWIS, San Diego Daily Transcript , October 29, 2004
 As if San Diego voters didn't have enough to think about while slogging through damaging but complex revelations of the city's troubles, they are about to decide on whether to sign off on the most dramatic reform of city government structure in 70 years.
 Proposition F, otherwise known as the "strong-mayor initiative," would thrust the mayor into a position of authority unseen in San Diego since the early 1930s. Like the federal and state governments, City Hall would have a chief executive in charge of carrying out legislative policies.
The days of the mayor as merely one vote on a nine-member City Council may be numbered.
 Supporters of the initiative embarked weeks ago on a campaign that would highlight the city's plight as reason voters should support such a radical change of government. Some have described the campaign as coming in conflict with incumbent Mayor Dick Murphy's message that the city faces only long-term manageable financial issues.
 The uncertain fate of the initiative is further multiplied by City Councilwoman Donna Frye's abrupt entry into the mayoral race.
"The question is, Will people support a strong-mayor form of government if they think Donna Frye is going to be the mayor?," said Jack Monger, a political consultant whose firm helped formulate the reform plan that was later shepherded through the City Council by the mayor.
Voters Tuesday already will be deciding on a slew of issues ranging from higher hotel room taxes to a new mayor and city attorney.
The opposition to the strong-mayor reform organized a last gasp effort Wednesday to raise awareness of the issue.
 "Why would you want to add more layers to our existing system, and make it take even longer to get something accomplished?" Frye said at the rally where she was flanked by signs reading "No Boss Mayor."
 Even long-time City Hall watchdog Mel Shapiro threw in $30,000 of his own funds to campaign against it.
 But Mitch Mitchell, vice president of public policy at the San Diego Regional Chamber of Commerce, was on hand to offer a different perspective.
 "This group is not saying lets put this in effect for ever, this group is saying lets try something new. It's not working now let's test this for five years," Mitchell said.

Old Town makeover, What's in store for San Diego's historic park?
August 15, 2004, UNION-TRIBUNE EDITORIAL
 Somebody ought to invite state parks director Ruth Coleman to a ballgame at Petco Park and buy her a hot dog at one of the concession stands operated by Delaware North. If that dog is an example of the quality we might expect if Delaware North takes over the state lease for what is now Bazaar del Mundo in Old Town, Coleman would no doubt reverse her approval of the lease change on the spot.
 That is a cheap shot, of course. But the point is that Diane Powers' Bazaar del Mundo has been a high-quality operation for 33 years. She took what was not much more than a boarded-up Casa de Pico Motel in a barren courtyard within Old Town San Diego State Historic Park and turned it into an artful collection of shops and restaurants that evoke Old San Diego's Hispanic roots.
 The Bazaar attracts more than 1 million visitors a year, about 50 percent of them local residents, based on credit card receipts and mailing lists, meaning that the Bazaar is hardly just a tourist trap. These visitors spend more than $25 million a year at the Bazaar. It has made Powers a wealthy woman. And it has made the Bazaar the richest concession – for the state – in the entire California park system.
 That Powers will lose the lease to Delaware North seems likely. Coleman's Parks and Recreation Department last October awarded the lease to Delaware North for the next 10 years. Powers appealed, but an administrative law judge upheld the decision last month.
Powers then filed suit. She complains that, because the administrative judge limited the scope of his hearings to one narrow question, she was prohibited from testifying, along with more than a dozen Bazaar supporters. And she claims foul in that she says the administrative judge knowingly used financial projections that were faulty.
But the chance of a Superior Court judge overturning the decision is a long shot at best. Delaware North could take over as early as this fall.
Delaware North is the McDonalds of concessionaires. A $1.6 billion company based in Buffalo, N.Y., it operates concessions at Yosemite and the Grand Canyon, at other state parks, airports and sports palaces like Petco.
 Delaware North outbid Powers in almost every aspect of its proposal – more base rent, a higher percentage of gross sales, more for capital improvements. Powers said her proposal would mean $11 million more for the state in the long run. Coleman said the Delaware North proposal was a deal the state couldn't refuse.
 The real bogeyman here is not so much Delaware North as it is the state for insisting on giving all of Old Town State Park a theme reminiscent of California in the mid-19th century.
 Delaware North's proposal was based on that state goal. So, the popular Casa de Bandini restaurant will be out; the long-gone Cosmopolitan Hotel will be back in. Many of the existing shops will be out; new ones will be in. Much of the existing garden landscaping will be out; more period landscaping will be in.
 Maybe the state and Delaware North will surprise us. Maybe the shops will be more interesting. Maybe the restaurants will be better. Maybe the whole place will be more authentic and true to California. But if not, San Diegans and tourists alike will lose perhaps the best reason for going to Old Town. And the state park system's golden goose will lose its shine.

MWD audit raises some eyebrows
'Broad interpretation' was used to justify expenses, state says
By Jose Luis Jiménez, Union Tribune, June 4, 2004
 The Metropolitan Water District spent $7,800 on dinner, wine, floral arrangements and live music for the 2002 Christmas party at a private country club.
 The state's largest water agency, which supplies up to 90 percent of San Diego County's water, also spent nearly $470,000 one year on "inspection trips" to its facilities. Guests were chosen by board members and included the companions of invitees.
 Seven board members spent three to four nights at Caesars Palace, billing ratepayers an additional $1,300, while attending a water conference in Las Vegas that should have lasted two nights.
 The expenses were highlighted in a state audit released yesterday of Metropolitan's finances and practices. As a special district in California, it is responsible for spending funds in support of its purpose to provide water for 18 million Southern Californians from Ventura County to the U.S.-Mexican border.
 The San Diego County Water Authority, which operates the aqueducts that connect to Metropolitan's system, declined to comment because it had not read the audit, said Dennis Cushman, assistant executive director. Money from local water bills makes up roughly 20 percent of Metropolitan's nearly $1 billion budget.
 The audit, covering 2001 to the present, was not a line-by-line look at Metropolitan's budget. Auditors took samples from areas of concern for the report.
They found that the agency used a broad interpretation to justify expenses that are not directly linked to water supplies and urged Metropolitan to make changes to better protect how the ratepayers' money is spent.
 "We question whether these types of expenses represent an appropriate and reasonable use of public funds," wrote Elaine M. Howle, the state auditor.
 In a statement, Metropolitan generally agreed with the audit's conclusions and pledged to implement many of the recommendations. It defended other practices, arguing that it saved the public money by reducing the bureaucracy. Others were simply the cost of doing business.
 The district noted that the 76-page report did not find that any laws were broken, contracts awarded improperly or funds misappropriated.
The audit also criticized Metropolitan for failing to create an effective ethics office four years after it was directed to by the state Legislature.  Concerns were also raised about the $16 million in grants the district has given the Center for Water Education, which is supposed to be a stand-alone nonprofit organization and museum to promote conservation.
 It did praise the agency for using qualified, low-bid contractors on construction projects.
 But it was critical of the method used to award the 726 consultant contracts active during fiscal year 2002-2003, 67 percent of which were not put out to bid. Of the 20 contracts reviewed by auditors, half did not explain why a competitive process was not used.
 "When the district does not document its justification for entering into (no-bid) contracts, it leaves itself vulnerable to allegations of favoritism," Howle wrote.
  Another area of concern was leases granted by Metropolitan to use its lands. As of March, 72 of the 232 leases paid $1 or less annually. Auditors believed the public should be getting more in return.
Adan Ortega, Metropolitan's vice president for external affairs, said most of the leases were to other government agencies, many times for recreational purposes. The district gained by having those lands maintained by the leaseholders at no expense.
 As for costs related to board members, Ortega points out that most are volunteers who travel long distances on behalf of the water agency. It is only fair for them to be reimbursed for expenses and for the district to host the occasional party to recognize their service.
As for the specific instances cited in the report, the seven board members who stayed extra nights at Caesars Palace had arranged for further meetings. The inspection trips, which can take a couple of dozen people on multiday excursions along the Colorado River and the State Water Project, make up just a fraction of the money spent to educate the public about water issues.
 Ortega said the conclusions are not out of the ordinary.
 "The things they found are typical of any audit of any organization," he said. "Basically, we have to button up."
The fact that these types of practices are common troubles state Sen. Deborah Ortiz, D-Sacramento. She introduced a bill to regulate all special districts, including Metropolitan. It would place a cap on travel expenses and compensation of board members and mandate ethics training.
 The bill, which Metropolitan did not oppose, died in committee last month.
Ortiz said most board members who volunteer to serve on special districts should be prepared to pay some expenses from their own pockets.
"We all make sacrifices when we go into public office," the senator said.
The official who called for the audit, state Sen. Richard Alarcon, D-Van Nuys, was unavailable for comment.
This summer, the auditor is expected to formally present the report to the Joint Legislative Committee, which can accept the findings or conduct further hearings.Governor orders property review
Union Trubune, May 13, 2004
SACRAMENTO – Gov. Arnold Schwarzenegger yesterday ordered a review of state property and the way it's managed, saying the system is disjointed.
The Republican governor issued an executive order directing state departments and agencies to catalog property they control, evaluate the need to keep that property and report property they consider surplus.
Schwarzenegger said he wanted officials to identify "potentially high-value urban properties" owned by the state that may "warrant realignment or disposal."
 He also directed the Department of General Services and two other agencies to recommend ways to improve the management of state holdings.

Overlords Soak City
By Don Bauder , Reader, Feb. 19, 2004
 Rescuing city finances may be futile as long as the society remains feudal. That is to say, San Diego's overlords are making sure they will get their corporate welfare -- no matter how broke the city is -- while the vassals pick up the tab.
 In Europe's Middle Ages, the vassal swore fealty to the overlord, who raked in bucks from the serfs' labors. Today, the peasants elect politicians who are supposed to represent the underlings' interests. But instead, the politicians secretly pledge fealty to the overlord, who is slipping them money. The result is corporate welfare, and San Diego will never dig out of its $2 billion employee pension/healthcare hole until it cuts off the charity flow to the barons.
 The city's January 27 admission that it is at or near the financial brink and has been covering it up since 1996 with phony accounting has apparently spurred the nobles to defend their God-given turf. On February 4, Jessie J. Knight Jr., president of the San Diego Regional Chamber of Commerce, wrote a letter to his members, speaking urgently of "the city of San Diego budget woes."
 The budget deficit will be huge, warned Knight, urging members to get involved in the budget process to make sure business gets its due. "We cannot afford the risks to the business community to solely depend on our elected officials to provide solutions," wrote Knight. "History suggests that in times of crisis, it is the business community that suffers disproportionately."
 History suggests no such thing. Indeed -- in San Diego in particular -- history suggests exactly the reverse: in a crisis, business gets its piece of the pie, and taxpayers get the crumbs, as well as the bill. That's because over the years, the nobles have rigged the system in their favor.
On February 6, only two days after Knight penned his letter, a seemingly innocuous memo to the mayor and councilmembers from deputy city manager Bruce A. Herring unwittingly spelled out how the overlords arrange for their own welfare.
 Herring was outlining how the city would pay for the huge expenses related to Petco Park. He discussed possible sources of revenue from the facility. He explained that during the baseball season, the Padres get 70 percent of nonbaseball revenues, and the city gets 30 percent. In the off-season, the city gets 70 percent and the Padres 30 percent.
 Then came this revelation: "However, it may be necessary to restrict or limit the amount of special-event revenues the city receives to preserve the tax-exempt status of the ballpark refunding bonds."
 What's this? A nearly bankrupt city forfeiting revenue? It's another example of the great scam that pro-sports barons pull on cities. In this case, the greedy owners got the unintended help of Congress. Back in 1986, federal legislators were trying to remove the gross inequities in the tax code -- particularly the use of tax-free municipal bonds to subsidize private ventures that should have been required to issue taxable bonds.
 In the process, the solons were actually trying to rein in team owners' fleecing of taxpayers. The lawmakers said that for stadium bonds to be tax-exempt -- thus qualifying for lower interest rates -- no more than 10 percent of stadium revenues could go to municipalities. The politicians reasoned that with such piddling revenues, cities would nix using public funds to build stadiums.
But reason has nothing to do with pro-sports subsidies. Compliant cities quickly figured that the stadium lease could be drawn up so that total government revenues -- from parking or whatever -- would be below 10 percent. The owners would rake in more than 90 percent of the revenue. Then the bonds could be tax-exempt. The politicians had figured that no city would be that dumb, but cities were indeed that dumb, or corrupt. The book Field of Schemes describes how the late Senator Daniel Patrick Moynihan, who had helped craft the legislation, was appalled that it essentially was "forcing cities to fund only facilities that were guaranteed money losers."
 Asked Moynihan, "Who would have thought that local officials, in order to keep or get a team, would capitulate to team owners -- granting concessionary stadium leases and committing limited government revenues to repay stadium debt, thereby hindering their own ability to provide schools, roads, and other public investments?"
 Stadium-related revenue can't be used to pay more than 10 percent of the debt service on the bonds, or they will be deemed ineligible for tax-exempt status. Hence, Herring warned that revenues may have to be forfeited. The city, as usual, did not return calls.
 Before 1986, municipalities that poured money into stadiums required teams to pay at least respectable rent. But since 1986, teams have expected to rake in that 90 percent-plus. The Chargers and city officials have defended the 60,000-seat guarantee by saying that, after all, the Chargers pay high rent compared with other teams in the National Football League. Ha, ha. Thanks to the 1986 tax package, those other teams pay ridiculously low rents. They consider it their entitlement, and governments protect it more than peasant entitlements, such as adequate police and fire protection.
 In many ways, San Diego's new ballpark is a classic example of overlord self-aggrandizement. The city defends the deal by saying that the peasants voted for it. Not so. The voters were told that it would involve no new taxes because of all the tax-generating hotels and business establishments that would spring up around it. But the surrounding development has been mainly condos, which eat up more in infrastructure expense than they produce in taxes. That tax-generating development is years away.
 Former councilmember Bruce Henderson, who has been right about the project all along, estimates that the ballpark will cost taxpayers more than $27 million a year -- $16 million in interest, $3.5 million for maintenance, and close to $8 million in opportunity cost, or what the city lost because ballpark cash outlays did not go to other critical needs. Ballpark bond refinancing -- now a long way off -- could reduce interest costs somewhat, but the bite will still be huge.
 Last Thursday, in announcing that the ballpark bond refinancing and one other bond offering have been delayed, the city boasted that it has hired a former Securities and Exchange Commission official to review its past municipal bond filings. Beware. Such consultants, particularly those who have had high posts in government, are notorious for providing a whitewash if given a signal by the person paying the bill. Amazingly, Mayor Dick Murphy said the move was meant "to reassure the public that financial statements are accurate." That certainly looks like orders to give a whitewash -- although such sellout instructions are normally communicated with a wink, not a statement to the press.
 After the Federal Bureau of Investigation seized records to launch an investigation, Murphy astonishingly said the consultant had been hired to stave off the probe. The consultant, Paul S. Maco, refuses to comment on Murphy's statements but says his marching orders come from the city attorney's office (that's hardly comforting). Maco has a good reputation, but his law firm, Houston's Vinson & Elkins, hardly does: it was Enron's former chief outside counsel and faces lawsuits over the matter. Maco was not involved in the Enron matter.
 Another startling example of the overlords' entitlement is Proposition C, which will be voted on March 2. It would raise the hotel tax, called the transient occupancy tax, from 10.5 percent to 13 percent. By itself, an increase in this tax may well be necessary.
 But proponents deceitfully hail Prop. C as a measure that would provide more funds to police and fire protection, parks, open-space acquisitions, libraries, and the arts -- all eminently worthy recipients.
 The city should be so lucky. Read the fine print. By far the largest chunk of the money goes for corporate welfare -- in this case, tourism promotion. Of every 13 cents collected, tourism promotion gets 2.5 cents. The worthy causes each get from one-fourth of a cent to one cent.
 "The impression is that the bulk of the entire transient occupancy tax increase goes to public safety," says councilmember Donna Frye. "In reality, the net effect is that 2.5 cents, which is the entire hotel-tax increase, is earmarked for tourism and sports. Then an additional four cents is earmarked for police, fire, parks, and roads, leaving only 6.5 cents that the council has discretion over."
 And of that 6.5 cents, much of the money has to go to paying off debt, such as the ballpark and stadium bonds. "I believe that an increase in hotel taxes is warranted, but we need to make sure that the bulk of the increase goes to support public safety rather than tourism promotion," says Frye.
 This spending is locked in -- another reason Frye and others such as the League of Women Voters and Murphy oppose it. The council has limited flexibility to put the money where it is desperately needed, such as the pension fund, which could drive the city into bankruptcy.
 Just who is locked into receiving this largesse? In addition to the tourism marketers, many sports groups rake in bucks, particularly the San Diego International Sports Council, a group of pro-sports worshippers/profiteers. The group lobbies for pro-sports subsidies. And then takes money from the city council that it is lobbying. If Prop. C passes, this cozy and ethically repugnant arrangement will be permanent.
 Occasionally in history, the peasants revolted against their overlords. Are you ready yet?

How San Diego's citizen revolt began
NEIL MORGAN , Union Tribune, Dec. 31, 2003
 In scrolling through these columns and readers' e-mail for the second half of 2003, I am startled by the abrupt but widening suspicion among San Diegans of corruption and stalemates in local government:
In June, the Padres took a map to City Hall that shrank the public-oriented Park in the Park. Spurred by the outrage of the civic leader Tom Carter and many column readers, Mayor Murphy refused it.
 The unseated port commissioner David Malcolm had been convicted of a felony in his conflict of interest after signing a Duke Power Co. contract. Federal indictments came down for three City Council members charged with corruption in a strip club issue. A column asked: "Are we really all about strip clubs and ballparks?" The e-mail vote was a resounding 'No.'
As public agencies continued to sacrifice city lands for cash (as with the Naval Training Center), port commissioners considered two bids to lease Dead Men's Point, at the core of the Embarcadero; one was for a Ripley's Believe It or Not museum.
 Column readers e-mailed another big No vote. Peter Q. Davis (now chairman of port commissioners) told his colleagues, "There's no reason that here in San Diego we cannot make Dead Men's Point a present to ourselves." The port voted down both proposals in favor of parkland.
A committee of architects and builders was charging City Hall with delays of up to two years on responses to building applications.
On July 9, attorney Pat Shea was quoted with an ultimate truth that politicians never utter:
 "We should realize in San Diego that, as a city, some of the things we want are discretionary. We should say so, and if we want them enough, be willing to pay for them through taxes. The city cannot succeed with a 'we deserve everything for free' mentality that none of us actually believe in the first place."
 By July 11, during Mayor Murphy's on-again, off-again announcements of seeking re-election, City Club founder George Mitrovich saw a rare opportunity: "Since Murphy is now blessedly free of political self-interest, his greatest legacy to San Diegans would be to support amending the city charter. Our present system requires neither responsibility nor accountability."
Aug. 9: The real estate guru Sanford Goodkin conceded that San Diego's structure of city government is outdated, but wondered: "Why do we have so difficult a time in locating good political leaders in San Diego when this city continues to have strong managers and leaders in business?"
 Aug. 13: In a luncheon speech, Mayor Murphy invited his audience to suggest how the city should approach its mounting deficit in the city employees pension fund. United Way's Fred Baranowski mailed Murphy a business story about U.S. Steel, which faced a related problem, seeking to transfer timberlands to offset its pension deficit.
 "Does the city," Baranowski asked, "have assets that could be pledged . . . ?" And with that the readers' game began: Balboa Park? The Chargers ticket guarantee? Mission Bay? John Kern's pension? The city sewer system?
Sept. 5: "There are 12,483 employees of the city of San Diego who are not involved in the current chaos at City Hall . . . They don't make headlines and are grateful to escape them. Yet many sense a growing occupational barrier between them and the public. Like the mayor and council upstairs, they wonder why so many San Diegans hold them in disdain."
 Sept. 28: Hector Lutteroth, one of Tijuana's wise men, sat solemnly over lunch in Tijuana and said: "In Mexico we are learning slowly. We know now that it wasn't just the PRI that was corrupt. The PAN was corrupt, too. It was both. It is Mexico. With the election of President Fox we changed the head of Mexico but not the body. We are trying to learn to live with democracy."
 Oct. 20: Lutteroth's son Ascan launched a bold and unprecedented citizens' group in Tijuana, protesting alleged corruption in the office of Tijuana Mayor Jésus González Reyes and others. (The group has grown since to 300 members, joined by national nonprofits seeking transparency in government.)
A column asked: "Might it be the ultimate irony along this border if Tijuana citizens restore integrity to that city's infamous government before we in San Diego can regain confidence in our own?"
 Nov. 2: A plea after the Great Fires: "If San Diegans of this county's 17 cities are ever to unite for their common good without robbing each others identities, it is now, in the wake of the weeklong fire, when disaster has forced a spasm of
unity . . . "
 Dec. 14: "Fire Chief Jeff Bowman, who has flatly challenged Mayor Murphy and the City Council on the inadequacy of San Diego fire protection, has suddenly become a civic hero. In public appearances, he has been so heavily applauded that he seeks now to avoid them . . .
Neil Morgan can be reached by e-mail at neil.morgan@uniontrib

Rebuilding is expected to boost local economy, By David Washburn, Union Tribune, Nov. 17, 2003
Excerpt: "From an industry standpoint, there are not enough companies or labor to build these homes," said David Waitley, president of Real Estate International, an Alpine construction firm that builds about 30 homes a year.
 "On one hand it will be a boon for the small contractor," Waitley said. "But there will be a total labor shortage."
A big part of the problem is that large construction firms such as Corky McMillin Cos. and KB Home have gradually pushed out the small-and medium-sized home builders who are best equipped to build homes one at a time.
 "Ten years ago, there were 20 of us. Twenty years ago, there were 50 of us," Waitley said. "The little guy has been driven out."
 All this means is that homeowners will be paying top dollar, Starr said.

Why are some people so sizzling mad at planning commissioner Mark Steele? by John R. Lamb, City Beat, 7/30/03
 Professionally speaking, these are the best of times for architect Mark Steele. But with success can come a darker side, particularly in a profession that is notorious for skyscraper-sized egos, fervid political gamesmanship and, sadly, public ambivalence.
 Le Corbusier—pioneer of the International Style that dominated architecture in the 20th century—certainly had his detractors, too. But his critics principally stuck to denouncing the inflexibility or oversimplification of his sparse designs. Rarely was he attacked personally.
 Steele, at 61, finds himself in a different century—and a different climate. Although he has 35 years of experience as an architect under his belt, it appears nothing could have prepared the Cincinnati native to cope with the barrage of criticism that has come his way in the past couple of years.
 To those critics, first on the list of complaints is not architectural style—although, like with any architect, there is always that thin ice to cross. No, these critics wonder why an architect who has taken on some of San Diego's most controversial projects in recent memory should be serving as a member of the city's Planning Commission, which, next to the City  Council, is the most powerful deliberative board in San Diego.
 Councilmember Donna Frye, the sole dissenter to Steele's reappointment to the Planning Commission last year, summed up the opposition: "I did not support Mr. Steele's nomination because I felt there were too many conflicts. If you're going to have an architect on the Planning Commission, it would be nice to have someone who didn't have to consistently recuse himself from voting on matters before the commission.
 "Surely there must be somebody else who is competent and doesn't bring so many conflicts to the table."
Evidently, Mayor Dick Murphy didn't think so when he nominated Steele for a second four-year term in April of last year. That process might have caught the eye of conspiracy theorists when Steele's nomination emerged from the city Planning Department with his last name missing (he was listed in city forms as Mark Wellington, which is actually his middle name).
Some folks thought city leaders were trying to pull a fast one, but those involved, including Steele, say it was merely a typographical error made by a clerk. Nevertheless, the slip-up frayed the nerves of some Steele opponents, Frye included. For emphasis during deliberations, Frye consistently referred to the reappointment candidate as "Mr. Wellington." Her colleagues were not amused.
 The San Diego Coastal Alliance, a local activist group, even took a jab at the architect's reappointment in its "top anti-public decisions" of 2002, except the group referred to him as a developer.
 "I've never been a developer," Steele snapped in an interview this week with CityBeat. "I've heard that before, and I think—Jesus God—if I was a developer maybe I could afford a Ferrari or something."
 These days, Steele says he still can't understand why he's been a looming victim of personal attacks, but a cursory look at his list of projects might shed some light on the reasons, whether fair or not. His name has been indelibly linked with such contested developments as Corky McMillin's Naval Training Center redevelopment in Point Loma, the Chargers' proposal for revamping the Qualcomm Stadium site, the 139-unit Inn at La Jolla condominium project on La Jolla Boulevard (now marketed as Seahaus) and a host of infill projects throughout the city that have some residents raging about their bulk and scale.
 Steele, often garbed in black turtleneck that accentuates his shaved head and sunken eyes, insists he has done nothing wrong and says both the city's Ethics Commission and a county grand jury—which received citizen complaints about his dealings—agree with him.
  "People attack me all the time in La Jolla these days," Steele said. "It's sort of become a favorite thing, but attacking me, quite candidly, is a little like attacking the guy who designs Saddam Hussein's uniforms, saying he's the problem behind it all."
 Of his projects, the La Jolla Shores resident said in his defense: "All I've tried to do is make them work the best in the community. I don't know why people are fighting me. I think it's because I've become so visible."
City insiders say privately that Steele frequently requests opinions from the City Attorney's Office about the projects he's involved in professionally to see if they conflict with his voluntary work on the Planning Commission. Steele acknowledged that he does abstain from voting from time to time, but he said so do most of the seven members who make up the commission. Presently, two architects, a landscape architect, a real-estate attorney, a planner and two community members sit on the Planning Commission.
 Carolyn Chase, a local activist and editor of the San Diego Earth Times, joined the commission at the same time of Steele's reappointment and said she believes Steele and the other development professionals have been above board in declaring their conflicts.
"No, they're all real clean on that," she told CityBeat. "And the other commissioners don't discuss projects."
However, she said Steele frequently dominates discussions, often trying to redesign projects during commission deliberations. "But it's not because I think he's conflicted or manipulative," she added. "It's just who he is and he believes he's right, and he's an architect and he is almost always going to be pro-project."
Steele does not deny his advocacy for growth in San Diego, but he paints the discussion in colors of his liking, saying that growth is inevitable here and that all city planners can do is "harness that growth and actually make the city better."
He half-jokingly added, "There's only a couple of things, I think, that can stop growth here. One would be a terrible economic calamity, or some sort of something in the water to prevent babies, or [acquitted penis-snipper] Lorena Bobbitt coming to town, because 60 percent of it now is internal growth."
 Ask people who know him, and you will get many characterizations of Mark Steele. Persuasive. Inspiring. Controlling. Determined. But talk to him about the vilification he has endured of late, and his deep voice rumbles with pent-up anger.
 "There's this little covey of people that seems to be chasing me around," he seethed. "They blame me for all sorts of crap that I had nothing to do with. I get regularly blamed for the 30-foot-height issues at NTC, and it just couldn't be further from the truth. First, you can blame the law, and then it's the city attorney. Candidly, I argued in favor of voluntarily keeping all of the buildings to 30 feet. It was the city. It wasn't McMillin. Trust me."
 "I'm just getting sick of being interesting," he grumbled at one point during the interview. "I have worked hard all my life on things like ethics and integrity, and I believe that is one of my strongest characteristics. It comes from my family and my entire life. So when people attack me, it really makes my blood boil."
The son of a dentist and a homemaker, Steele graduated with the first architectural class at the University of Kentucky. After college, he traveled to Detroit to work under the tutelage of Latvian-born architect Gunnar Birkerts, who is credited with giving shape to Detroit's skyline. Steele referred to Birkerts as a "hero," but he was no fan of the tough economic times that faced Motor City when he arrived. He and some colleagues soon set up their own practice.
 "That was fine except that the Detroit economy was so terrible," he recalled. "I realized I was never going to get any place in my career there, so I started looking around."
 He took a couple years to visit numerous cities, and at one point asked a friend if he would go with him to Phoenix to check it out. "He said, ‘OK, I'll go with you to Phoenix if we can stop in San Diego, because I've always heard it's pretty.'"
Steele said, "I didn't want to even look at San Diego. From the Midwest, it always sounded like it was a military town with pink stucco cottages. But I said OK, and it turned out to be the reverse. Phoenix was terrible, but I stopped here and fell in love with the place."
 He landed a job in the La Jolla office of architect Dale Naegle, where Steele said he learned a great deal about urban planning—skills he has applied most recently to the urban design features of NTC (now called Liberty Station) and the as-yet-unveiled plans for the Qualcomm Stadium site in Mission Valley.
After his first wife succumbed to cancer, "I sort of had the urge to get back into my own practice," he said. His firm, MW Steele Group, at first gravitated to downtown, but a bankruptcy involving the building he had chosen forced him to look elsewhere. He settled in small quarters on Drury Lane in La Jolla to ride out the recession and ended up staying put for 10 years.
 It's also where he met his "soulmate," Dale Fitzmorris, who ran a modest clothing boutique next door. She would eventually manage Steele's architectural firm and help start a popular catalogue company for menopausal women, called As We Change, which she eventually sold with her partner. Dale Steele now is a full-time advocate for a downtown public market similar to the famous Pike's Market on Seattle's waterfront. They also take frequent trips up and down the coast on a Harley.
 Fourteen months ago, Steele moved his offices to East Village, into a vacant warehouse on 15th Street that once housed a rubber-product distribution concern. The brick-and-concrete one-story is less than half a block from the San Diego bus maintenance yard, but also only four blocks from the rising downtown ballpark.
 "My heart has always been downtown," he explained about the decision to locate an architecture firm in a rather rugged part of East Village. "And I really like our building."
He said his firm is probably most well known for its design of the Carmel Mountain Ranch Public Library, which was featured on the cover of Architectural Record in late 1997, and the Cal Western School of Law library addition downtown, which was completed in 1999.
 Jim Gabriel, once a Steele staffer who departed six years ago with two colleagues to establish their own architecture firm, Hanna Gabriel Wells, in Ocean Beach, described Steele as "definitely the person who wanted to be in charge of decision making, the first-person-to-the-chalkboard type."
 "He has a way of taking over a meeting or situations without bowling over or annoying people. At the end of it, everyone's happy and feeling good, and you have no idea that he's just completely manipulated the whole thing."
Gabriel, who is also a member of the Uptown Planners community-planning group, said Steele's penchant for controversial projects has likely helped personify him as to go-to guy for developers who know their projects will cause angst in various communities.
  "He's got a lot of hot potatoes, that's for damn sure," Gabriel said, adding, "He's developed a reputation for being able to solve the problem or get through the roadblock. It was something that we were always very proud of at the office. We never, ever, ever didn't get a project approved. We always found a way to work our way through whatever it was.
 "It was a great source of pride to tell our clients that."
But as time went on, he said, the clientele changed to people who "knew they were in for trouble before they even got started. So it want from being just this wonderful thing for your client to being almost like a reason you were being hired."
 Steele said his firm still has a perfect record on city approval of his project designs. "The reason for that is that we always listened to the community and planning staff, always played by the rules and ‘earned it,'" he said. "Success in this field can only be built on listening and the quality of the work—anyone who thinks differently doesn't understand the profession or the process."
 Like many, Gabriel thinks it's important for architects to sit on the Planning Commission. "I think an architect can bring a real good point of view to all the discussion," he said. But an architect with so many notable projects in the hopper? "It just may be that he's gotten himself so involved with so many projects that maybe it is conflicting," Gabriel said. "I can see where people are drawn to ask that question."
 Some are asking that question in a big way, particularly in La Jolla.
On July 10, the La Jolla Town Council unanimously rescinded its approval of the Steele-designed Inn at La Jolla condominium project in Bird Rock after an architect who had been hired to review Steele's plans found numerous discrepancies. While the town council is not officially recognized by the city as the area's community planning group, the decision sent shockwaves through La Jolla.
 The town council's approved motion read: "Because misrepresentations (of the Inn) appear to have been made, the prior LJTC approvals are rescinded." The vote of trustees was 15-0.
"‘Duped' was the word used by many trustees to describe how they felt," said Sherri Lightner, the town council's chairperson.
 Steve Florman, the La Jolla-based architect who reviewed the Steele drawings, told CityBeat he was "dumbfounded" by what he discovered. Roof lines that fail to line up, windows that appear in some drawings and not others, elevation heights that don't pencil out and retaining walls that differ from site plan to floor plan.
"What he was showing was not consistent between his different drawings," Florman said. "In order to describe a building, you need a floor plan, a section, an elevation, a roof plan—and those drawings didn't reflect the same building over and over again. It was a lot more inaccurate than I thought the city would ever allow."
 He said the perspective rendering Steele provided was drawn from the one corner that would make the project appear to fit in with the residential quality of the neighborhood. But in developing his own renderings, Florman said he found that "when you look at it at a more fair location—actually any other location—you'll see that there's a 20-foot height difference in the buildings."
 Opponents of the project, which garnered City Council approval last year after unusually fierce support from Councilman Scott Peters, have long contended that Steele has not been forthcoming about the actual height of the project, which must conform to the city's 30-foot height limit.
 For his part, Steele is flummoxed by the criticism. He said the drawings Florman worked from were preliminary in order to gain a plan development permit from the city. The drawings, he said, "were not meant to be final."
About the height criticism, Steele insisted, "The height limit is the height limit. It's the law. It's like any other law, and we don't have the option to violate the height limit. Because I'm on the Planning Commission doesn't mean I can violate the height limit. It's ludicrous."
 Regarding the town council's unanimous reversal, Steele called it "utterly disgusting. I find it demeaning for all the people who are involved in it, including the people that are doing this crap. I don't get it."
He went on to say, "La Jolla's becoming like a Jerry Springer show. I mean it. There's nothing but people throwing out personal insults and yelling and screaming. It's crazy. La Jolla has always been sort of crazy, but it's never been as mean-spirited as it is now."
 Steele continued on to lament the blame game that dominates television, politicians and the Internet today. "There are plenty of us who are just fed up with it," he said. "The disappointing part for me is that I've invested a lot of time in the community. I've spent a lot more time on community groups than I have on the Planning Commission, but it's not productive anymore. It doesn't produce anything. All it does is tear things down. It's like termites. What's the good of it all?"
 Mark Fabiani, special counsel for the Chargers, told CityBeat that the NFL team chose Steele's firm to draw up plans for the proposed revamped stadium site prior to the team's presentation to the citizens task force in January because "we liked him and liked his ideas."
 Did Steele's role on the Planning Commission play a part in the decision? Fabiani said the Chargers did "examine that issue but learned that it was common in San Diego for planning commissioners to work in fields such as architecture and urban planning, and we understood that obviously he would be recused from any matter having any relationship to us."
 Added Fabiani: "In other words, if we were just hiring someone just to figure out how long it took to do an EIR [environmental impact report] and how long it took to get through the planning process, I think there are a lot of people who fit that bill. Our concern was hiring the best urban planner that we could find who could give our project the kind of vision and creativity that we thought we needed."
Contacted for a comment, local activist Mel Shapiro wondered about the hubbub over Steele and his perceived conflicts. "I thought you were going to do a piece on the entire Planning Commission, because they're loaded with conflicts," he said. "From my perspective, the people who are appointed to the commission, except for Carolyn [Chase] are all pro-growth people who make money out of growth. Besides voting on individual projects, which they do, they're also supposed to make [planning] policy for the city, and obviously their sources of income prejudice them as to what kind of policy they'll make."
 One local award-winning architect, who requested anonymity, said he frequently watches the live broadcasts of Planning Commission meetings on Channel 24, and he invariably will observe Steele trying to redesign plans that are before the commission. He said Steele would make "reference back to his own projects as good examples of things to do, and I thought to myself, ‘I know his project and I think it's not very good.' He's hit or miss depending on who in his office is working on it."
 When told that the Inn at La Jolla project took just about a year to gain planning approval, the architect gasped, "Unheard of. It's been a year and a half for me, and I'm doing just four units. Maybe I should have hired him. He seems to get things through." © 1994 - 2003 Southland Publishing, All Rights Reserved
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Qualcomm Stadium's bad? Gee, USA Today has it No. 1,
DIANE BELL. Union TribuneSept.. 6, 2003
 Someone had better clue in USA Today  to San Diego's best-kept secret. Doesn't it know that Qualcomm Stadium is antiquated, lacking in amenities and substandard?
 Apparently not, because a photo of our stadium filled up most of the top of a page in the national newspaper's weekly Destinations travel section yesterday, accompanied by gushing commentary. The headline stripped across the page read: "10 Great Places to Get a Kick Out of Football." Qualcomm isn't relegated to low man on the top-10 totem pole. It ranks No: 1, the best  of our country's "modern-day cathedrals known as stadiums." The newspaper's listing was compiled with the help of ESPN sports analyst Chris Berman, who elaborated on his favorite places for watching gridiron grit. Qualcomm "boasts 52 concession stands, three restaurants and 113 executive suites. It has hosted the Super Bowl twice." (Three times, really.) Actually, says Berman, "The Super Bowl needs to be in San Diego every  year." A lot of San Diegans will agree – and, rest assured, some stadium backers will deliver framed copies to San Diego Chargers headquarters – and maybe to NFL Commissioner Paul Tagliabue's office as well.

A Bowl of Business, San Diego Sports Arena has a rich history hosting sports events
Excerpt: In 2001, the San Diego Sports Arena was voted the No. 1 arena in the nation for facilities with 10,001-15,000 seats by Billboard Magazine. In 2002, the San Diego Sports Arena received the No. 2 ranking.
Excerpt: As the Hahns continue to make regular upgrades to the existing facility, the next chapter in San Diego sports history should be the development of a state-of-the-art sports arena, a vision that the Hahns have had since they took over the management of the arena in 1992.
 "The Sports Arena continues to be an extremely busy and successful facility, and our overall vision is to help in the redevelopment of the North Bay Area and hopefully see the completion of a new arena and bring an NBA sports franchise back to San Diego," said Ernie Hahn.
Full Article: A Bowl of Business, San Diego Sports Arena ...
By SEAN SADDEH , Daily Transcript, San Diego Sports Arena , Jan. 15, 2003
On November 17, 1966, the San Diego Sports Arena opened its doors to 11,692 screaming Gulls fans and thus began 37 years of sports history in San Diego. The 15,000-seat venue has a rich history hosting some of sports' prominent events such as the Davis Cup, the Ali-Norton fight in 1973 and the NCAA final four in 1975.
The 37-year-old San Diego Sports Arena is a sports and entertainment facility, hosting nearly 200 events a year.
To this day, the San Diego Sports Arena plays host to more than 175 events a year. In addition, the arena is home to the four-time Taylor Cup Champion San Diego Gulls, the
10-time indoor soccer champion, San Diego Sockers, and the most recent success story, the San Diego Riptide of the Arena Football 2 League.
In 2001, the San Diego Sports Arena was voted the No. 1 arena in the nation for facilities with 10,001-15,000 seats by Billboard Magazine. In 2002, the San Diego Sports Arena received the No. 2 ranking.
As the Sports Arena continues to be rewarded with national success, community sports leaders Ron and Ernie Hahn continue to make drastic improvements to the arena. Over the last five years, the Sports Arena has undergone renovations and additions, which include a new four-sided LED scoreboard, a new JBL sound system, five luxurious star suites, a new production and green room and a fully upgraded outdoor marquee and additional signage systems.
As the Hahns continue to make regular upgrades to the existing facility, the next chapter in San Diego sports history should be the development of a state-of-the-art sports arena, a vision that the Hahns have had since they took over the management of the arena in 1992.
"The Sports Arena continues to be an extremely busy and successful facility, and our overall vision is to help in the redevelopment of the North Bay Area and hopefully see the completion of a new arena and bring an NBA sports franchise back to San Diego," said Ernie Hahn.
In addition, the San Diego Sports Arena and its management are always looking for ways to develop new and exciting sport events for the San Diego community. One such event is the Golf Fest, which began at the San Diego Sports Arena five years ago and is now embarking on its sixth year.
"Golf Fest was developed with partner Shelly Hall of Spear Hall and Associates, as a way to showcase the newest and greatest golf products. Since San Diego is a golf mecca, we felt that a large golf specific event, which showcases everything and anything new in golf, would be supported by the community," said Ernie Hahn.(Another NTC style public land grab. Backroom deals have been made for years on this project scam. Tell the UT to stop the spin and the City “NO” to this giveaway of our public assets to insiders.)

Recalling the record of former city manager
May 27, 2003, Union Tribune, Letter to the editor
Well, well, well. Look who's heading San Diego's citizen task force on affordable housing. None other than former San Diego City Manager Jack McGrory. Let's review a few of the wonderful cost-saving programs he brought to San Diego county taxpayers:
 The Charger ticket guarantee; giving the Spanoses an $11 million training facility; increasing sewer fees to pay for an unneeded secondary treatment facility, then instead of eliminating the additional fee, using it to disguise budget deficits by redistributing the funds for other city expenses; selling off city properties to make up budget shortfalls; mismanaging funds dedicated by the voters to street repairs and improvements by distibuting them elsewhere; hiding stadium construction defects from the public brought to his attention by an ethical contractor; selling naming rights to the stadium for a paltry $18 million.
 And, how can we not give credit to the big guy for undercontributing to the city employees' retirement fund, another ploy to lead the taxpayers astray?
 Of course, credit must be shared with others.
 I can't wait to see his next hoodwinking scheme come before the voters. Some say the past is indicative of the future. Hmmm, I wonder. D.T. RADMILOVICH
Slime Pays, By Don Bauder, Reader, May 29, 2003 http://www.sdreader.com
 'Anything Goes." Cole Porter wrote the music and lyrics. But it became San Diego's theme song. We don't yet know if any city councilmembers solicited bribes or improperly took money from strip-club operators wanting looser laws. But we do know that in recent years, San Diego's corporate/government power structure has been conducive to palm-greasing.
 Government at various levels has sent out the message that it was not going to peer under the table to see what was passing from the fat-fingered to the sticky-fingered.
 Pelf passer and pelf payee had few reasons to believe that they would be detected, and if detected, that they would be prosecuted. Apologists say the mentality grew out of the city's desire to be known as business-friendly. Others blame law-enforcement lethargy. But the wise describe it as a rancid environment bunch of employees of a favor-seeking company and its boss all giving the maximum amount to a political candidate. When the boss reimburses the employees, it becomes campaign money laundering.
 Last year, civic activist Mel Shapiro gave the commission information on employees of a trash-hauling company all giving the same amount to two city councilmembers on the same day. The commission nonetheless described his complaint as "an expression of opinion," not factual information. In replying to the commission, Shapiro cited one part of a long-running campaign money-laundering case that had already been ruled upon by the state Fair Political Practices Commission (FPPC).
 In this case, trash hauler James Mashburn and a company he co-owned, Refuse Services, in early 1999 agreed to pay the fourth-largest campaign-money-laundering fine in the commission's history, $249,500.
Mashburn admitted that he reimbursed employees who made political contributions in cash -- thus making discovery hard to trace. Through these maneuvers, he had given money to Mayor Susan Golding, five county supervisors, and politicians in North County such as Poway's Mickey Cafagna. The fair practices committee passed on the information to the district attorney's office, but then-DA Paul Pfingst decided not to prosecute.
 Then there is the case of Gatlin Development, a real estate firm. According to the FPPC, between 1992 and 1994, the company made 107 campaign contributions to members of and candidates for city council and the board of supervisors, along with other politicians. At the time, the contribution limit was $250. Most of the contributions from Gatlin employees and their spouses, along with members, relatives, and business associates of Gatlin's law firm, were for $250. When the word of the generosity got around, chief executive Frank Gatlin received calls from other politicians asking assistance in fund-raising, according to the fair practices commission.
 Frank Gatlin reimbursed his employees for the gifts. Since the practice persisted for a year and a half, the FPPC said it "indicates a pattern of laundering activity, rather than an isolated incident." Gatlin and the law firm were fined $420,000. The FPPC referred the matter to Pfingst, who kicked it to the city attorney's office. They wouldn't touch it.
 Both cases "should have been prosecuted as criminal cases," says former DA Ed Miller. "A lot of prosecutors don't want to make waves with people who have a lot of clout." But making such cases criminal would be a "significant deterrent" to campaign money laundering, says Miller.
 And that's the point. For many years, there have been very few deterrents to such activities. Deputy District Attorney Rupert Linley remembers being told, when he was transferred out of the DA's environmental unit in 1997, "The DA's office wanted to be more business-friendly." That's one reason he opposed Pfingst's reelection bid. Linley says that Dumanis "wants strict enforcement."
 There are multiple examples of the symbiotic relationship of politicians and businesses wanting favors. In mid-2000, the locally based Corky McMillin Companies won the contract for development of the former Naval Training Center over a larger, much better-financed, out-of-town company that had been recommended by a special blue-ribbon selection committee.  According to Save Our NTC Inc. McMillin got $1 billion of assets for a few dollars, as well as tax breaks and subsidies of more than $100 million. Records show that the McMillin firm donated heavily to local politicians.
In 1972, the city had voted a 30-foot height limit on coastal buildings. That cramped McMillin's style. So the city attorney's office came up with an -- er, uh -- novel interpretation: The limitation did not apply to NTC because the land was in federal hands when the citizenry voted in the limitation. Shockingly, both Superior Court and the Fourth Appellate District bought into this -- er, uh -- bizarre argument.
 The most infamous signal-sending case was the Stallings-Moores scandal. Padres majority owner John Moores showered gifts on former councilmember Valerie Stallings. He stood to gain a city-subsidized ballpark as well as one-tenth of downtown at lowball prices.
 He permitted her to get on the "friends and family" list of a hot stock Moores controlled, Neon Systems, as Matt Potter first revealed in the Reader. The initial reaction of City Attorney Casey Gwinn was that the gift was not a problem because Neon didn't do business with the city. "Instead of a watchdog or an attack dog, he was a lap dog," says attorney Michael Aguirre of Gwinn. Aguirre, an excellent attack dog, is running for the post.
Eventually, the Moores gifts were investigated by federal authorities. But Stallings got a wrist slap under state law, and Moores was not charged. Because the FBI did the investigation, the records were sealed. If it had been a state investigation, they could have been opened.
 The authorities never did state the value of many of the gifts bestowed on Stallings by Moores. Former councilmember Bruce Henderson asked Superior Court to make it a condition of probation that she disclose the value of those gifts. The court nixed the idea.
 In announcing the dubious deal, then U.S. Attorney Gregory Vega said that there was nothing wrong with giving money to a politician -- ignoring the big monetary gains Moores would make, partly through Stallings's votes. After he left office, Vega was named to the purported Ethics Commission.
 Shapiro won a lawsuit charging the city council with illegally holding 12 Padres-related closed sessions. After Shapiro also won at the appellate level, the city attorney's office decreed that it would from then on take notes at closed sessions, instead of the city clerk, who had done it for years.
 Viewing the foul-smelling activities through the years, Henderson sums it up: "Slime pays."
If U.S. Attorney Lam succeeds in the investigation of possible strip-club bribes -- as well as in her office's probe of Peregrine Systems -- the malefactors may find life, as Cole Porter intoned, "Too Darn Hot."

Voltaire Park quickly uprooted
By MAGGIE YOUNG The Beacon May, 21, 2003
As crew Amidst jack hammers and heavy equipment, one woman hunched over with a shovel, hurrying to unearth any piece of Voltaire Park that she could save. 
  On Thursday morning, May 15, Ocean Beach residents were surprised to find a crew digging up a piece of land they know as Voltaire Park. The property, located at the intersection of Sunset Cliffs Boulevard and Voltaire Street, is owned by World Oil, but has been used as a community gathering place for years.
 Company representatives did not return phone calls about specific plans for the real estate. Tony Kempton, associate city planner for Ocean Beach, confirmed that the City of San Diego has not issued a permit for them to build a gas station, though.
 Many view the action at Voltaire Park as a personal attack, as evidenced by the sign that reads “Wake up OB you’ve been bulldozed.”
 World Oil did not notify residents before removing vegetation from its property. As soon as they found out, a handful of individuals arrived with shovels and tried to rescue those plants that meant the most to them.
  Aurora Angle saw the action from her office at OB People’s Organic Food Cooperative, 4765 Voltaire St., and hurried across the street to start unearthing her favorite foliage.
  Jim Kase drove home from his job near the border to salvage whatever he could. A ficus tree that he and his daughter planted and two hand-painted boards from a planter box narrowly escaped becoming mulch and instead found a home with this protective father. He only wished that he could have gotten there sooner.
 “It’s a shame that they didn’t give people any notice,” Kase said.
  After spending so much time at the park and putting so much of themselves into it, many felt hurt by the removal procedures, according to Kim McGinley, Ocean Beach Planning Board member.
 “Everybody feels like they’ve been attacked from behind,” she said.
 This meaningful site was previously operated as a gas station and recycling center and sat as a vacant lot until March 2000 when it was transformed into a memorial and neighborhood park.
 The greenery that grew on the busy street corner appeared first to commemorate the life of Mica Buzkova. In the spring of 1999, this Czech Republic native opened the Bohemia Strudel Factory, 4879 Voltaire St., and immediately captivated local hearts, according to one of her regular customers Patty Fares.
 “Her strudel was good, but it was mainly Mica that everyone fell in love with,” Fares said.
Approximately one year after setting up shop, Buzkova died in her sleep at the age of 30 and left Ocean Beach reeling with grief. The community responded by leaving flowers in front of her shop and eventually down the street at the empty lot. People soon planted a tree in her honor and a park was born.
  World Oil still owns the land, but has permitted the community to sow the soil and even place signs on the property.
 Although many of those who have contributed to the space in the past few years never even knew Buzkova, it will always represent that special woman for Fares. She also worries that its destruction may be the first step in a development process.
 “For me, it was symbolic of Mica, but it also is an open space at that corner,” Fares said. “You know, that corner is like that whole corridor of Ocean Beach, it’s pretty dense. So it also is maybe symbolic of things to come.”
 Kempton is trying to find out exactly what is in store for the property, but does not expect to see a structure up any time in the near future.
 “I’d be very surprised if they actually construct anything, given the history of this site” Kempton said.s began demolishing

State getting more gripes about real estate agents
Licensing agency lacks adequate staff for timely investigations
Todd Wallack, San Francisco Chronicle, December 2, 2004
The state is drowning in complaints about real estate agents.
The Department of Real Estate, which licenses brokers and salespeople, said it received more than 10,000 complaints in the fiscal year ended June 30, up 29 percent from the previous year and up one-third from three years ago.
Meantime, the licensing agency has reduced its enforcement staff during the past few years because of a state hiring freeze, even though it now oversees more real estate agents. It has 90 full-time workers in its enforcement division, three fewer than in 2001.
"We are really struggling'' to keep up with the workload, said William Moran, the agency's enforcement chief. "All the deputies are carrying higher caseloads than they can realistically manage."
The agency had a backlog of 3,663 complaints as of June 30, down slightly from 2003, but double its total four years ago. And more than one-third exceeded its goal of processing complaints in six months; 9 percent were older than a year.
Why the increase in complaints? Moran wasn't sure. But one likely factor is the growing number of people becoming real estate agents, lured by skyrocketing housing prices and the lack of jobs in other industries. Since 2001, the number of licensed real estate agents climbed by one-fourth to 393, 750 as of June.
Still, Moran said he didn't have any specific data breaking down the types of complaints or explaining the increase. The numbers the agency does release are muddled.
For instance, in addition to counting complaints by consumers, Moran said the complaint statistics include cases where the agency has flagged license applications because of a criminal conviction or other problems. Moran said he couldn't break out how many of last year's complaints actually came from the public.
The agency's public reports are sketchy. In a newsletter distributed each fall, the agency normally lists only one year of data, with no mention of how the figures differed from previous years or why. The Chronicle made the comparison by collecting reports from multiple years.
"I don't think (their reports) provide much accountability,'' said Julie D'Angelo Fellmeth, administrative director of the University of San Diego's Center for Public Interest Law, a watchdog group that monitors California licensing agencies.
By contrast, the state Medical Board publishes more-detailed statistics each year, including an explanation for any significant changes from one year to another.
The real estate agency also said it wouldn't provide a copy of its complaint database to The Chronicle so that the paper could attempt to analyze the type of complaints it receives. Still, Moran said, "We have nothing to hide."
Moran said the agency is simply reporting the data the same way it has for years.
The numbers also raise questions about how well the agency is policing the industry.
Despite the sharp rise in gripes last year, the agency investigated 11 percent fewer complaints from 2003 to 2004. In addition, the agency said it slashed its random audits of real estate businesses, loan brokers and property management firms by one-third from 2002 to 2003, according to a report sent to the Department of Finance earlier this year.
But Moran said the decrease in investigations could be an anomaly. So far this fiscal year, which started in July, Moran said the number of investigations has risen even as the number of complaints has started to decline. The agency has also referred more complaints for disciplinary action over the past two years.
Moran said the agency has never surveyed consumers who filed complaints to find out how pleased they were with the complaint process.
Jacqueline Carroll, for instance, is not satisfied with how her complaint was handled. She thought she had a slam-dunk case against her real estate agent.
When Carroll and her husband bought a house in Garden Valley (El Dorado County) near the Sierra foothills in the spring, one of the key selling points was the central air conditioning system. The real estate agent pointed out the thermostat with both hot and cold switches. And the AC was mentioned in both the house listing and other documents.
But when Carroll flicked the switch on a sweltering day, she got a nasty surprise. Nothing happened. There was no air conditioner, and Carroll said she was told that a new one would cost $11,900.
So in early September, after failing for months to get anywhere with the real estate company, Carroll filed a complaint with the Department of Real Estate.
But Carroll said it has been slow to investigate. And she said she was frustrated when an agency employee recommended she hire an attorney instead of expecting the agency to help her.
"It makes me wonder, what's the point of their existence?'' Carroll said.
Moran said the agency is still investigating the complaint and could still take action against the real estate agent if it finds she did anything improper. But he pointed out that the agency isn't a court and can't order someone to pay damages to a home buyer who has been harmed in a real estate transaction.
The Garden Valley real estate agent, Diane Higuet of William L. Lyon & Associates Inc., said her attorney advised her not to comment because of the potential for a lawsuit.
In the meantime, the state's Web site indicates that she is a licensed real estate salesperson with no record of discipline. There was no mention of the pending complaint.
E-mail Todd Wallack at twallack@sfchronicle.com.