The Playa Vista Papers

 

STUNNING WHISTLEBLOWER REVELATIONS SHOW PLAYA VISTA/BALLONA WETLANDS DEVELOPER'S SECRET POLITICAL STRATEGY TO HELP RE-ELECT RUTH GALANTER AND BILK THE TAXPAYERS

 

By Rex Frankel

 

Real estate developers and politicians have a symbiotic relationship. Politicians love developers because they so freely hand out perks and campaign contributions. Developers need politicians to bend the laws that protect the environment and to tap into the taxpayers' wallets, for developers rarely like to spend their own money. In Los Angeles, the city of pavement, we've got one large unpaved area left in the city: the Ballona Wetlands. The owners call it Playa Vista. Building in a wetland has its problems: quicksand-like soil, explosive marsh gas, and pesky environmentalists with attorneys.

It's well known that the troubled Playa Vista developers love Councilwoman Ruth Galanter, who represents the area surrounding the wetlands on the L.A. City Council. Their employees, consultants and lawyers have given her 1999 campaign $20,000, her largest single source of campaign contributions. The Playa Vista developer is sending out thousands of brochures to residents of her district praising her. In return, Galanter and Mayor Richard Riordan are offering them a $600 million package of corporate welfare composed of tax dollars, tax breaks and tax-exempt bonds, to help restart their project, which was nearly in bankruptcy in 1997. Galanter says the government can't afford to buy this land, 1000 acres of green open space, wetlands and wildlife habitat in the middle of the most densely developed city on the West Coast.

 

What isn't well known, until today, is actually what the current owners of the land paid for it. According to a shocking, revealing, and extremely cynical 188-page internal memo written by Playa Vista's owners and given to the citizens who oppose this development by an active whistleblowers network inside the development company, the firm Playa Capital LLC only paid $101 million to acquire this fragile urban open space. Galanter, who claims to be a "strong environmentalist", wants the government to help develop 2/3rds of this land with incentives of well over twice what the entire parcel is worth. Galanter is amply rewarding the developer for their huge campaign contributions.

But the Playa Vista developer's assistance to her campaign goes much farther than that.

Galanter pushed the City Council to approve development of a third of this property in 1993 and 1995.

 

Well, after 3 ½ years of study, the developers intended to release their controversial phase 2 development plans, for the rest of the property, in early 1999 and hold public hearings now. But since the first phase was approved, public opposition to the development has exploded.

Their internal memo says, however, that due to

 

"The risk of conducting major public hearings on the project in the midst of an election",

 

they will postpone releasing their 2nd phase plans until after the April primary and June runoff election for Galanter's city council seat. Their vice president, Robert Miller, stated in February that the plan will now be released in July or August. Miller was speaking at the annual meeting of the Friends of Ballona Wetlands, an organization which supports the Playa Vista development plan.

 

This is a deliberate move to avoid bad publicity for their bought and paid-for ally Ruth Galanter, who's been their best friend at City Hall. Galanter first won her seat in City Hall by opposing the massive plans for this development, composed of 13,000 condominiums and apartments, over 5 million square feet of office and retail space, with a daytime population of 50,000. Soon, Galanter switched sides. If built, the project would dump 200,000 cars a day on local streets, more than L.A. International Airport. It would add 28% more rush hour traffic to the San Diego Freeway and 100% more to the Marina Freeway. It would spew over 10 tons a day of air pollutants making it the 4th largest single source of smog in the city of Los Angeles, beaten only by LAX and 2 oil refineries.

 

In fact, Galanter's bailout is making possible an environmentally unsound project, a project that is considered economically unviable without the bailout, according to Mayor Riordan's chief of staff Michael Keeley.

 

"POOR SOIL CONDITIONS"

Why is the site not suitable for development? It is located in a swampy river valley, with an extremely high water table, crossed by several earthquake faults, and with a leaking natural gas storage field operated by the Southern California Gas Company. All of their buildings, even the smallest, will have to be built upon stilts which will go down to 50 feet below sea level, to avoid the soil which has a high risk of turning to Jell-O in an earthquake. The internal memo's authors admit that the site is plagued by "poor soil conditions".

A new study which the landowner was ordered to do by the City's building and safety department, reveals that the soil is highly contaminated with flammable methane gas. This is much like L.A.'s Fairfax district where a single spark set a city block in flames in 1985. The city has now declared the Playa Vista land a "high methane risk zone". Will Playa Vista become another sinkhole for public funds much like the toxic-contaminated Belmont High School site?

 

A FINANCIAL HAZARD TO TAXPAYERS

 

But Playa Vista is not just an environmental hazard to future occupants and investors in the project. It is a financial hazard to the taxpayers and anyone who buys or rents a condo at Playa Vista.

 

The whistleblower memo reveals that the developers intend to dump nearly all of their infrastructure costs onto the California taxpayers or the future residents of the project.

And to thwart the "right to vote on taxes" law, known as proposition 218, they intend to load up their property with over $400 million in special property taxes to pay for all of their roads, sewers, parks, and other so-called benefits to the surrounding community. These extra taxes will be paid by anyone who buys a condo or rents an apartment, at double the normal property tax rate paid by anyone else in Los Angeles. According to the memo, the developers intend to avoid building the housing in the first phase of the project until the 2nd and final phase including these special taxes is approved. This is because under proposition 218, if any of the first phase housing is sold, then the residents have a right to vote and even repeal any of these special taxes, thereby putting the development costs back on the developer, where they belong.

 

This is a direct contradiction to one of Galanter's election promises that Playa Vista would be approved and built in phases-- so that if the first phase of the project cannot keep its pledge to reduce traffic and other impacts, then the 2nd phase would be scaled back. The landowner now seeks approval for the 2nd phase before any of the first phase is constructed.

 

 

TWEAKING THE SECOND PHASE FOR PUBLIC RELATIONS PURPOSES

 

The memo reveals that Playa Vista management got a great deal from Galanter with the first phase and so they're willing to be a little flexible with the final phase, even to reduce some of the second phase's size. While about a third of the 1000-acre property is off-limits to development under federal and state wetlands laws, they are also willing to not develop an additional 80 acres. But local environmentalists contend these acres also fit the legal definition of a wetland and could therefore never be developed. And the developer isn't giving them away. They want the taxpayers of the State of California to give them another 73-acre piece of land nearby, known as Playa Vista parcel C. Parcel C was given to the State by the estate of Howard Hughes so they wouldn't have to pay inheritance taxes on his billion-dollar empire. So this proposed deal wouldn't get the taxpayers anything more for their money.

 

 

PAYOFFS TO OTHER GROUPS:

 

The memo reveals further that while the landowner is being offered upwards of $600 million of their development costs with government assistance, they are generously willing to let this money "trickle down" back to their friends, to buy support from politicians, environmental and charitable groups, to the tune of $360,000 in 1998 alone.

 

Their payments in 1998, according to the memo:

$120,000 in campaign contributions;

$132,000 in gifts to charitable groups

and $111,000 to the Friends of Ballona Wetlands to pay for their lawyers and biologist Michael Josselyn.

 

WHAT DO THESE REVELATIONS MEAN?

 

1. This land is not worth $250 million to $1 billion as the developers and their supporters have claimed. $100 million can be easily found to save our last open space. Why give them more to build it than they paid for it?

2. The costs to build in a swamp and the risks from leaking flammable gases make this a bad location for a new city of 50,000 people.

3. Our tax dollars are not just paying Playa Vista to develop our last open space, and jam our streets and pollute our air; our tax dollars are indirectly going to buy off politicians and groups to support their project.