When Fullerton Government Plays Developer: An Object Lesson

Ooof! Didn't see that one coming!
Ooof! Didn't see that one coming!

About twenty years ago, the Fullerton Redevelopment Agency bought a few old  houses, and condemned a perfectly good commercial building from long-time prominent Fullerton attorney William Chaffee.  The City kicked everyone out and gave the prime land on the 100 block of W. Wilshire Ave in downtown to a Pasadena development group named Howard /Platz.  All this done under the condition that H/P  build retail space and apartments on top.

Yikes! Mistakes were made! By unnamed persons.
Yikes! Mistakes were made! By unnamed persons.

The developer built the apartments over retail, took its fees and profit along the way. But the project couldn’t lease up for the amounts that the developer and the City had promised each other, so eventually the property was taken over by Lenders. It was then sold for a fraction of what the City and H/P had invested because of the the dire market conditions and the complication that the project included a City parking structure. The new company which bought it lowered the rents and it eventually filled it up with tenants because of  reduced rental prices and the City’s concession that the retail space was no longer required to be tax generating.

Well, Hell. No use crying about it now.
Well, Hell. No use crying about it now.

That was good for a few renters for a short time but bad for the rest of the property owners in downtown because this glut of space forced down rental rates. It was also bad news for the City because the tax revenues that the developer had “promised” to generate never materialized.

It's our game. We get to make up the rules!
It's our game. We get to make up the rules!

The lesson; When government gets involved in the development business,  it’s bad for everyone except for a select few who take a direct benefit and the well paid redevelopment bureaucrats.

The Fox Theater Fiasco: Pick A Card…Any Card…

Gee, what a choice!
Gee, what a great choice!

No, not that one!

That’s the way Redevelopment likes to choose its favored developers. A kabuki-like pantomime is undertaken by issuing an RFP (Request for Proposals). In the end the process presents the decision makers with a choice that is essentially no choice. To illustrate the point, Loyal Friends, we go back in time almost ten years to examine how the “Save The Fox” movement got off to a rousing start.

let's hope we don't end up going around in circles...
Let's hope we don't end up going around in circles...

In 1999 after catching the wave of the Save The Fox movement, the City issued an RFP for private developers to take over the job of restoring the Fox and developing the adjoining area. The City had committed to build a parking structure and hand over other developer goodies. Proposals were received in August. In October the Agency was presented with the lucky winner, Staff’s choice – “Berkman/Chaffee” a local restaurant owner and a politically-connected lawyer turned low-income housing credits entrepreneur. Paul Berkman was there to provide credibility to run a “dinner theater” and Doug (Bud) Chaffee’s job was to look like a land developer. The only problem, as it soon transpired, was that Berkman refused to promise a dinner theater, only movies. And Chaffee had never “developed” anything but heavily subsidized housing.

Good Lord that's awful...
That isn't very good, is it?

To complicate matters a second proposer named Dana Morris of Morris productions, who believed himself to be in the running, actually showed up at the meeting  desiring that the elected officials, not staff, decide who might get the gig. His idea was to create an performing and fine arts academy on the site that would, in turn, generate all sorts of ancillary business opportunities downtown and not compete with existing businesses.

To the acute embarrassment of staff, Morris managed to organize a slew of supporters, including a backer who promised to help finance the venture. They asked for more time to prove their bona fides.

On cue, some of Fullerton’s usual lefty suspects got up to promote Berkman/Chaffee although their proposal was dubious, at best, and despite the fact that neither partner had any experience doing what they claimed they were going to do. There were strong undertones of religious bigotry pulling their adherents along, for it had become known that that Morris was affiliated with BIOLA, and in some peoples’ minds that was anathema.

Nuh-uh. Not in our city!
Nuh-uh. Not in our city!

To add hypocrisy to the mix, people who had never shown a dime’s worth of concern when the City acquired property in downtown Fullerton were suddenly horrified by the thought of a non-profit foundation paying no property tax!

The council finally voted 4-1 (Flory dissenting, naturally) to continue the item so that Morris could clarify certain financial points in his proposal. In the intervening time, as Morris later told us, he was treated with such overt contempt and continuing hostility by Redevelopment Director Gary Chaplupsky that he finally abandoned his proposal as simply not worth the aggravation. We have only his word for what happened, but given the Redevelopment Agency staff’s propensity for prevarication over the years,  we are inclined to accept it. And so a plausible concept for the Fox was lost because the staff did its level-best to thwart a reasonable proposal and award the deal to their favored team – the team that could be counted on to play ball.

Gee, Paul, I don't remember this being so hard...
Gee, Paul, I don't remember this being so hard...

And now Patient Friends, we finally return to our title. At the hearing in October, 1999 it slipped out that of the eight original proposals only two were even deemed worthy of consideration; and the City Council was never informed that one of the other six actually came from the janitor at the Hub Cafe! Of the two “finalists” it was clear that Morris never stood a chance, thus effectively limiting the Agency’s choices to none. This “planning and activity” as our faithful reader “Jack B. Nimble” characterizes it was nothing but a sham, a fact that later became evident when the Berkman/Chaffee partnership permitted its agreement with the City to lapse, and was never heard from again. And so a feeble concept had gained traction even though (excluding Morris) there was not one credible respondent to the proposal. But in government circles, that’s all it takes to gain momentum!

Here's your card, sucker...
Here's your card, sucker...

Fullerton’s City Lights – FUBAR From the Word Go – Part I

We're From The Fullerton RDA And We're Here to Help!
We're From The Fullerton RDA And We're Here to Help!

Damn. Another Fullerton Redevelopment Agency saga of screw up. This one is a bit long and I bring it to you Dear Friends of Fullerton in serial form.

Way, way back in the early 90s the Redevelopment Agency was still trying to figure out how to buy down the ever-increasing affordable housing set-aside monies it had illegally accumulated over the years, and which a lawsuit had forced it into spending. One type of project that was acquiring some cachet at the time was the SRO – Single Room Occupancy – a long term hotel-type rental for people in fairly marginal economic circumstances. The County had pledged a million bucks of its own to sweeten the deal.

The City solicited proposals. One came from the Bushala family for a site they already owned at Harbor and Truslow. Their partners were to be Baronne-Galasso who had done numerous similar efforts in San Diego, and their architect, the well-published Rob Quigley. http://www.robquigley.com/

The City entertained a second proposal from a gent named Caleb Nelson who seemed to be living out of his truck, along with the very silent “San Gabriel Partners” whom the public never saw. The City staff went so far as to select a site for Mr. Nelson since he owned nothing and couldn’t find City Hall without a map. Unfortunately, the chosen site on Commonwealth Avenue, included the historic Grimshaw House, a Victorian stick-style house c. 1894 that had mysteriously been left out of the 1979 historic survey – maybe because a block building then housing a thrift store had been plunked down in front of it and it was easier just to ignore.

The Grimshaw House, c. 1894, formerly on Commonwealth Avenue
The Grimshaw House, c. 1894, formerly on Commonwealth Avenue

For reasons too complicated to explain here, there was no way the City staff was going to do business with the Bushalas. Some bad blood there!  So behind the scenes an ambush was orchestrated by a couple of city council members, senior staff, and an enterprising housing tax-credit entrepreneur, Doug Chaffee, to undermine both the Bushalas as slumlords, and Baronne-Galasso as bankrupts at the final hearing.  On a 4 to 1 vote the SRO project was awarded to Caleb Nelson in the Spring of 1993. An opportunity for forward-looking architecture had been deliberately squandered.

Once the deal was done Redevelopment moved in to vacate the property. The historic Grimshaw House, intentionally put in harm’s way by the City, became an attractive target and was set on fire – twice – by an arsonist.

Oh, well.
Oh, well.

It was finally razed. A rare Nineteenth Century house, the oldest remaining structure in Downtown Fullerton, and connected to one of the early pioneer families of the County was gone – with nothing but sighs of relief from the good folks at the City.

Things Are Going Just Great!
Things Are Going Just Great! Have A Sucker!

Years passed. 1993 rolled into 1994, and 1994 into 1995 with nothing happening on the site. Despite the City’s attempt to portray him as a sound individual, it was becoming increasingly difficult to hide the truth about Mr. Nelson  and what he might be able to build, given the resources at his disposal.

Does It Come With A Balcony?
A Room With A View - And A Balcony

And this where the story gets really interesting…

Read the rest of “Fullerton’s City Lights”: Part 1 – Part 2Part 3Part 4Epilogue