Saturday, April 2, 2011

Whence Fuentean isolation? Herculean labors in the lower Circles of Hell!

Tom does battle
     Regular Dissent the Blog readers know that, in recent months, trustee Tom Fuentes has been more isolated than ever on the SOCCCD Board. Philosophically, he’s always been close to Don Wagner, but no board can happily accomodate both those guys, and so the two ended up all Capulet-Montague. I was glad to see at least one of ‘em vamoose!
     Aside from his union sympathies—probably a residue of his bailiffian past—John Williams has always been simpatico with Fuentes. But Williams’ opportunism and venality made him unreliable; and well, anyway, he had to leave the board in December to properly manage his County scandal.
     Nancy Padberg and Fuentes couldn’t be very far apart philosophically, but, for reasons unknown to me, Nancy flat hates Fuentes (it is an epic hatred, I’m told); I do believe she’d French-kiss a lesbian abortionist before she’d stand with Fuentes on anything.
     And Dave Lang: well, nobody can figure out why Fuentes still has any hold on that guy, what with the limp-wristed assistance Tom provided during Dave’s disastrous/embarrassing run for the Repub OC Treasurer nomination. And besides, Lang’s fidelity to Satan seems to be fading. Not sure.

ATEP: Advanced Technology & Education Park (a redevelopment assist?)
     REDEVELOPMENT & EMINENT DOMAIN. One aspect of Fuentes’ BOT isolation is his unhappiness with ATEP, the district’s never-ending and eternally incipient whiz-bang techno campus at the former helicopter station in Tustin—where those huge blimp hangers still dominate the horizon.
     Over the years, Fuentes has occasionally expressed his libertarian objections to the very idea of ATEP as a community college enterprise. But, in recent years, the ever-meandering ATEPian dream has increasingly mingled with clever-but-tricky financial arrangements and, well, redevelopment dollars. Increasingly, Fuentes' objections concern specifically the latter.
     Until recently, the term "redevelopment" has meant nothing to me. I'm pretty clueless about such things. On the other hand, over the years, I’ve noticed that some Republicans—the libertarianesque ones—have seemed to maintain a slow boil of outrage over the practice of “eminent domain”—the “right of a government ... to expropriate private property for public use, with payment of compensation” (according to my Mac’s dictionary). For years, there’s been background noise about ED abuse here in Orange County, and it seems to me that former OC Supervisor, now Assemblyman, Chris Norby has been the chief noisemaker.
Chris Norby
     When I think of Norby, I think of Fuentes—owing to that curious episode in 2003 in which the SOCCCD Republi-board attempted to slip Norby’s brother, Eric, onto the board after trustee Dot Fortune resigned amid allegations that her residency was a fraud. And besides, on occasion, Fuentes has expressed arcane positions that seem to match, word for word, those of the Norby boys.
     As it turns out, Chris Norby’s solitary claim to fame is his authorship of Redevelopment: the Unknown Government (1998), in which he analyzed “the distortions caused by fiscalization of land use, sales tax competition and eminent domain abuse” (biography).
     Well, OK. So the issue of "eminent domain" comes up in particular with regard to “redevelopment.”
     What's that? This is from the Wikipedia entry for “redevelopment”:
     Redevelopment … refers to state and federal statutes which give cities and counties the authority to establish ... agencies and give the agencies the authority to attack problems of urban decay. The fundamental tools of a redevelopment agency include the authority to acquire real property, the power of eminent domain, to develop and sell property without bidding and the authority and obligation to relocate persons who have interests in the property acquired by the agency. … Controversy usually results either from the use of eminent domain, from objections to the change in use or increases in density and intensity on the site or from disagreement on the appropriate use of tax-payer funds to pay for some element of the project. … The controversy over misuse of eminent domain for redevelopment reached a climax in the wake of the U.S. Supreme Court's 2005 5 to 4 decision in Kelo v. City of New London, allowing redevelopment takings of sound, unblighted homes, solely to allow redevelopers to put the taken land to more profitable uses and thus increase the revenue flow to the local municipality. The Kelo decision was widely denounced and remains the subject of severe criticism.
     I know next to nothing about redevelopment, but I've done some reading and I gather that, owing to its relatively unregulated nature, it has occasioned a certain amount of corruption involving legislators and rich people. (It's the usual transfer of wealth from the non-wealthy to the wealthy.) If I have a problem with redevelopment, it’s likely to be its way of allowing or attracting this kind of corruption—the kind that would make Thracymachus smile.
     If you know anything about Fuentes, you know that he has no problem with corruption per se. He's a pretty corrupt guy. Fuentes’ beef with redevelopment seems to stem from his free market true believer core—his wacky "mine is mine, goddamit" libertarianism.

* * *

     As you know, “redevelopment” has been in the news lately owing to Governor Jerry Brown’s plan to nix it—unsurprising, coming from original “outside-the-box” Jerry, but surprising coming from the more familiar “play-the-game hack” Jerry who, as Oakland mayor, sucked up more than his share of redevelopment dollars on behalf of that town.
     Essentially, Jerry Brown is too old to be President, and so he knows that he may as well shoot his whole “integrity” wad now. Hence, he’s quite serious about addressing California’s spendthriftian ways. Redevelopment dollars are “low-hanging fruit” for determined picker Jerry.
     And so Jerry Brown is doing (or is trying to do) something sensible and good—something that has pissed off both establishment Democrats and establishment Republicans—especially Republicans. But it has also managed to make Jerry a temporary hero to libertarianesque Repubs, including Tom Fuentes and Chris Norby, with whom the Brownster has almost nothing in common, philosophically.
     BTW: on March 16, Brown's anti-Redevelopment measure fell short of the necessary votes by one in the Assembly. The only Republican Assemblyman to vote for it was Chris Norby. Don Wagner joined his Republican colleagues in voting against it. (Don has explicitly defended enterprise zones.)
     Democrats plan to resurrect the measure later. The attack on redevelopment ain't over just yet.

* * *

     Meanwhile, back in the OC, Tom Fuentes is doing lonely battle with the forces of Darkness—spendthriftian “big government” liberals and unprincipled, Fat Cat-loving "big government" Republicans.
     —Or maybe just against trustees who see a chance at getting some easy money for the district.
     Oh, the humanity!
     Here, then, are excerpts from past DtB reporting of SOCCCD board meetings—from 2007 to the present—that tell part of the story of Tom's heroic labors for truth, justice, and the libertarian way.
     N.b.: if there’s a common thread here, it is the involvement of a professional economist—who loves opera—named “Dante Gumucio.”
     Tom v. Dante: Herculean labors in the lower Circles of Hell!


February 2, 2007
It's Cam-e-lot!

     ...Eventually, I made my way to Saddleback College for the special SOCCCD board of trustees meeting concerning the “Advanced Technology and Education Park” (ATEP) in beauteous Tustin, along lovely Ant Hill Boulevard. Tonight was the night for presentations of the “partnership” proposals submitted for use of our 68 acres, which are located just three or four blimp-lengths from one of those big Marine helicopter hangers.
. . .
     After some folderol, Chancellor RAGHU P. MATHUR introduced the ATEP business. He explained about the 13 proposals that had been submitted. For tonight, he said, only three of the groups who had submitted proposals would be making presentations….
     The idea seemed to be that these … are the top of the heap. According to whom? Mathur made a point of explaining the process whereby the use of ATEP was being determined. According to Mathur, the “governance groups”—faculty, et al.—are a part of the decision-making process! (Don't think so.) The 13 proposals, he said, were duly assessed by the Chancellor’s Executive Committee—a group that included no reps from the governance groups. The Committee, he insisted, “not only invited input” from the governance groups, but “their input is expected!”
. . .
     Park Ranger Bob Kopecky then spoke. “Partnerships are a two-way street,” he said. It’s all about “embedded education,” he said. We’re talking big money, he said.
. . .
     CSUF [presented] two proposals. … Then came CAMELOT Entertainment, the 800 pound gorilla of the evening. Camelot hopes to spend $800 million on a studio complex with sound stages and back lots….
     The next proposal was way cool: SkyVenture wants to build the world’s largest vertical wind tunnel. It would be used for testing products or something. I think they’re gonna drop guys into it and blow ‘em around, too.
. . .
Economist Dante Gumucio
in The Barber of Seville
     The last proposal was called “Young Americans.” They’re patriotic and cheerful or something, and they used to be on Ed Sullivan. They sound like total shit….
     After the Bobster spoke, two “project consultants” yammered at us. They sounded pretty smart, but don’t ask me what they said. I liked their names: “Dante” and “Andreas.” Andreas (or was it Dante?) carried around an opera book. I checked it out. Hardcore, man.

April 26, 2010
Tonight's board meeting: we need a $billion

     ...The report concerning capital and scheduled maintenance needs (over the next twenty years) was "sobering," to use Mathur's term. … It appears that we'll need close to a billion dollars (for the twenty year period). That means that we're gonna have to get seriously creative to pull together that kind of scratch. Some guy named "Dante" (sans Inferno) dazzled us with a dozen or so cool (or hinky?) revenue-producing ideas, but, in the end, he seemed to say we'll have to raise taxes just a little bit to make that billion we need.
     This board hates the "T" word.
     Asked Fuentes, "Is a little bit of tax increase like a little bit pregnant?" He added that he was quite serious.
     Nope. No slippery slope here, said Dante.
     That didn't go down well. Fuentes glared.
     One of the revenue ideas was inspired by something that board already does. If the district were to put aside $20 million of basic aid per year, that would add up to $400 million (in the twenty year period).....

January 20, 2011
The January board meeting: live and direct!


Discussion item: project planning

     Brandye D’Lena makes the presentation. It's very good, I think.
     ...Do we need to rethink our funding redistribution (for various projects)? The Saddleback science bldg.: built 37 years ago. Big problems. Will cost nearly $60 million to fix.
     Staff strongly recommends fixing this, putting it ahead of other projects....
     Funding advantage: ATEP new market tax credit. (See below.)
     Stadium at Saddleback. Low on priority list, but that may change.
     ChancellorGreat report, Brandye. We're not asking that the board make any decisions tonight. Just info. But we need to get moving. As soon as we go forward with spending, we don't get state money. Will need to go to basic aid money. With the tax credit, we're close to the funding we need for the ATEP project. (50,000 sf building.)
     Board questions:... Lang: the problems with the Science Building are an embarrassment. Need to move forward. This is a wonderful time to be doing these projects (much less expensive in this economy, all agree). How do we expedite these projects? On the other hand, don't want to circumvent the existing process, which is very collaborative. Also, we've not spent enough on maintenance in past. Need to address that.
     (Lengthy discussion. Friendly, useful.)
. . .
     ATEP: anywhere near funding for first building? No. FUENTES: I would be interested in having another presentation. I do not support immediate development of ATEP. I think we're being forced into developing it when that is not appropriate. We should take care of IVC and SC. Yet in this presentation, we see ATEP as a large chunk of the big picture. How does this picture look if we set ATEP aside? If we just concentrate on our students and existing colleges? (He seems to be asking for a report.)
     Nancy: the priorities are developed in a process. As Lang emphasized.
     Lang: we need to respect people in the college community and their judgment of what is important....
     Poertner: no, don't need another report (as Fuentes seemed to request). We can answer the question now. How would it help to dump ATEP? You'd have $12 million. ATEP would have to be abandoned.
. . .
7.7: New Market Tax Credit
     Moved ahead to 7.7: new market tax credit report. (Fuentes had expressed skepticism about this earlier.) A pilot program.
     Bugay: it would benefit district in the amount of $11.6 million (revised upward from 8 million). (The rest sounded like Greek to me.) SOCCCD sells land to a corporation that we own. Blah, blah, blah.
     Quizzical faces.
     (Nancy declares: no, can't do it. We won't own the property for 20 years.)
     Public Economics Inc. guy gets up (Dante Gumucio, the "consultant" on this deal). He explains the deal. Legality has been reviewed. It's kosher.  (Fuentes seems unhappy but disinclined to challenge.)
     Poertner: clarifies the deal a bit.
     Prendergast: I'm a little wary. Could this go very wrong? You say we might "double." But could we lose?
     Dante: blah, blah, blah. Seems to say reassuring things. (You know me and finances.)
     Lang: are there conditions on the money—what it can be spent on? "Vertical construction will begin 'soon'." That's the understanding upon closing.
     Fuentes: we've asked: why don't we sell the damned thing (ATEP)? We've always been told: you can't sell the ATEP property. The Navy and Tustin won't allow it. How do we overcome that?
     Dante: yes, there are prohibitions re transfer. But this transfer (from the district to itself) is permitted.
     Fuentes: we would need to know whether this is legal in the eyes of the Navy and the City of Tustin before going forward. Also: we take pride in having no debt. We campaign on that. If we go forward with this, can we still say we have no debt?
     Dante: the "loan" that the district would make to itself would continue to appear on the district's books as a loan--from 7 to 15 years. But the loan would have been in effect prepaid the day of closing. A technical situation.
     Fuentes: in truth, we can't say we have no debt.
     D: the district would have a debt to itself.
     Fuentes: who are these people we're getting in bed with? I want an opportunity to investigate who these people are. Dante: One investor has expressed willingness to do this, represented by broker. Would rather not be divulged. A commercial bank. It acquired another commercial bank (on sweet terms). They have an excessive profit picture; looking for tax benefits. The other party: community development entity. Talking to 2 right now. Would be premature to divulge their names. Extremely reputable entities. We can make their names available to you. Then you can do your "due diligence."
Fuentes: who are these people we're getting in bed with?
February 28, 2011
February board meeting: "Corporate welfare!" fumes Fuentes

Lease/Leaseback: avoiding the "lowest responsible bid" millstone:

     Discussion item (4.1) Project planning: construction delivery methods; lease/leaseback.
     Bugay. Refers to Dante Gumucio, I think. Brandye is up at the podium. Bugay praises, then introduces, her.
     Some guy (Andreas?) comes up to explain Dante's odd whizzbangery. (It's no good; I ain't gettin' it.) He explains that this deal has been made at other colleges. Some kind of advantage over other ways of going about construction. It's flexibility, man.
     I like this guy's tie.
     Poertnerbottom line, we are normally forced to go with the low bid, but that can really be problematic. Often the work done is unacceptable. This proposed process allows us to select contractors in advance, avoid others.  Naturally, we would want competition between contractors. Brandye says: would be a very competitive process.
     Lang: asks a question about whether this approach circumvents the law. Andreas seems to have lots to say about that. This lease/leaseback thing is now "tried and true." For 15 years now, we've seen hundreds of projects--without the "lowest responsible bid scenario."
     Lang: why haven't more districts taken this approach? Have there been problems? Andreas explains that there've been no problems at colleges, though some issues at K-12. Also, the Chancellor's office says its "appropriate," it's not an issue.
     Any companies going bankrupt? Andreas: I haven't seen that....

Website: it's all about Don
     Fuentes: re "new markets" program. I've cautioned my colleagues about this, he says. This program needs "daylight." It continues to move forward, yet we've not had adequate open discussion with participation with the community. No dialogue in the public eye. There's been many articles about this program, some demonstrating scandalous problems across the country. [Fuentes seems to have difficulty continuing. He seems ill.] When I was a young man, growing up in OC, a student, we used to refer to Tustin as an important part of our community. People in Tustin had bumperstickers: "Tustin: the Beverly Hills of Orange County." People were very proud. Things have shifted a bit. A study of the "new markets" program under the Clinton Administration--was conceived to assist low-income communities. The ATEP project is in Tustin. We're playing a game here. It's a high-end development now (the part of Tustin where Marines were). I'm troubled we're contemplating participating in this kind of game. People have questioned "new market" moneys. High income areas have benefited. (Padberg asks Fuentes to wrap it up; [it does seem clear he's making a speech]). We're putting the cart before the horse. This idea has not been shared enough with the community; too much of this has been done behind closed doors. "It's corporate welfare." It's to benefit the rich; it's a scam. This program is "unworthy," says Fuentes.
Dante:
"corporate welfare"?
     Wow. This is a bit like Little Richard railing against flamboyance.
     Prendergast: notes that there is a large section of Tustin that is low income. True, things have changed on the old base. But drive down between Redhill and Barranca, you don't see that kind of development. Wants to clarify that the area (ATEP) is indeed the low income area of Tustin.
     Poertner: we've been struggling with the issue of how to pay for ATEP. We have talked about new market tax credits in this room half a dozen times at least. We're not trying to force these credits in a track that may not comply. This area does comply. It's an opportunity to get $18 million that we don't have to pay back. It will help the Tustin community, help the district. It's a good program to move forward with.
     Padberg: it's about the base, not the city of Tustin. It's a run-down area.
     Lang: asks for Dante Gumucio to come up and deal with these concerns. Respond to the "corporate welfare" charge.
     Dante: it would be corporate welfare if no purchase were required. Lang disagrees. Dante responds: [I can't follow it.] In the case of ATEP, those who benefit are community college students at ATEP. Discusses the physical boundary of the project. The Census Tract. The poverty rate of residents in 2000 was 17%. (Fuentes makes one of his classic grimaces.) This is 39% lower than median family income. The area qualifies as "highly distressed." Dante seems to make a strong case.
     Prendergast: will this change with the new census?
     Dante: my expectation: the easterly part will break off and the northern part is what we'll have. We'll still qualify. No guarantees. So, yes, there's a certain "expendiency" to trying to get this transaction finished by the middle of summer.
     Fuentes: asks Chancellor: if we "rush into this," tie ourselves into this new markets program. Then we come to our senses and say, we shouldn't be spending money at ATEP. Should be spending at IVC, etc. What's our commitment?
     Poertner: our commitment is to build the new building. We need to decide now.
     Fuentes: there's too much that goes on in this district [of this kind]: we get sucked into obligations before we've thought it all the way through. (He's loud and perhaps angry. Trustees seem uncomfortable.)


6.14 New Markets tax credit transaction. Brokerage services agreement.

     All but Fuentes vote for it. (Milchiker absent.)
. . .
6.13 Project schedule and basic aid assignment

     Blah, blah, blah. Charts, numbers, etc. Brandye has a proposal. [I dunno what it is. You know me and fiscal issues.] Brandye sure looks like she knows what she's talking about. Big Smile, good shoes.
     Prendergast asks if other building projects can qualify for the Lease/Leaseback..... [I'm not sure what the answer is.]
     Jay motions to accept.
     Lang: thanks Brandye for an excellent report. Does have a question about "budget reassignments."
     Poertner: this ATEP money was set aside when we thought we needed to do that. Nothing on this list is something we are depending on for current operations.
     Fuentes: asks about Bill Jay's motion. Fuentes asks to divide the question. Divide off item 2 (the ATEP item, I'll bet).  All but Meldau agreed to divide the question.
     They vote on items 1 and 3 - unanimous.
     They vote on item 2: all vote yes but Fuentes (no). (At one point Nancy snaps at Fuentes. Good fun.)

6.15
     All vote yes except Fuentes, votes no....

March 28, 2011
The March meeting of the SOCCCD board of trustees: Merlin the Magician?
Heaven forfend!

...SHOOTOUT AT THE ATEP CORRAL:
2.4 SOCCCD: Facilities Corporation 2011 of the South Orange County Community College District, Initial Organizational Meeting (I believe this concerns ATEP and the financial scheme discussed at recent meetings)

     Fuentes speaks: mentions effort to end redevelopment agencies in Cal. "And here we are" going along with redevelopment! Continuing to grow government and to spend. I believe this is wrong. At this time, we should be moving on a "pay as we go" basis. This is unwise, ill-timed. Will be projected to the people--why are we doing this when we are asking the people of CA to pull in their belts? Why do we have this approach of privilege? I don't think that ATEP should be approached except if we can afford to do it, on our basis, our time frame, not motivated by "outside forces"; not being told the speed in which we need to do it. Should have the taxpayer in mind. It is my intent to be with the times, and to vote "no."
     They vote: all yes, with Fuentes "no." Fuentes continues to vote "no" on particulars. All others vote "yes."

J'accuse!
Chancellor Gary Poertner's report: We're about to begin discussions that are important. ... With regard to ATEP, will hear from David Bugay about New Market Tax Credits. Answering questions raised by Trustee Tom Fuentes: how will this look when we're done? Are we in debt? Not? Randy Peebles will report on a number of issues that require decisions soon (about ATEP). Describing where we've been; where we are now; where we could go. In April or May, the colleges will present their visions of what they'd like to do at ATEP. We need to set priorities. What will we offer at ATEP? The proposed programs involve 300,00 s.f. Must prioritize, since we'll have much less space in the short term at least. We've been talking about "ground leases" to generate funds. Partnering with other agencies? Should we go beyond public universities? Private? For-profit? Religiously affiliated? Need guidance about this. Finally: what kinds of corporate partners we might entertain for ground leases.
. . .
Fuentes to Dante: "Merlin"
...SOCCCD:  New Market Tax Credit Report [Merlin the Magician]

     Last report: by VC David Bugay: ... Has fun with the word "alocatees."
     Will there be debt? "Yes and no." District will loan money to corporation. Blah, blah, blah. A complex transaction. Five entities involved. Bugay does pretty well explaining the stuff, considering. Fees. Loans. Leverage. Buckets of money.
     I am now lapsing into a coma. Such pretty colors....
     ....Um, I can see Fuentes' face. He's concentrating. Grimacing. Lang yawns the biggest yawn ever yawned....
     Fuentes: 5.5 million in transaction costs: could you define? Dante comes up to explain. Conservative estimate of cost. Fuentes stares. Did you know that Dante is an opera singer? [I overheard him talking about it.]....
     Endless murmurings about consultants and "alocatees"....
     Fuentes: transparent you say? How transparent? What we're used to?
     Dante: more murmurings... Fuentes grimaces, but that means nothing....
     Fuentes: I see you as Merlin. I learned long ago that there's no such thing as a free lunch. Nobody up here understands the magician's act you are selling us. 
     DanteI'm not selling you anything
     Fuentes: you have been from the beginning....
     Blah, blah, blah .... Bugay describes attorney involvement, review. Lang: will there be a separate legal opinion in connection with this transaction? Dante: yes. Murmur, murmur.... Complicated scenario of opining lawyers....
     Fuentes: might we turn to the Chancellor? I continue to have concerns. A redevelopment agency. A move afoot to do away with them in the state. Gary, can we obtain an opinion for us if we have anything to be concerned about. Gary: be pleased to do that.
     Fuentes: 64 days. Clock starts ticking. Full disclosure of participants. Find out who the investors are. Due diligence necessary. Bugay: we will be transparent. All parties will be identified. Will see who the participants are. You will be able to investigate. The board "owns this transaction."
. . .
     ...Now they're talking about "lease back services." Fuentes: thought this was being pulled, so did not speak to it. But I have serious problems with this, he says. Discusses an incident years ago in the County. Fears that this proposal "has some of that in it." Could we hold this matter for a month? Get some questions answered about "fair competition."
      Padberg tries to head off Fuentes at the pass.
     Fuentes: contractors participating in government projects. Opportunity of employment. Unions. That was the issue; you must not have read the paper. Prendergast suggests there's no problem...  
     Fuentes: pointedly: we're setting policy; let's not railroad this through
     Padberg: we've discussed this before. You need to make a motion to table. Fuentes does so. Lang seconds. They vote.  Prendargast and Padberg do not prevail; it is tabled....

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