Today in court, local activists gained a major victory in a battle against the City of Anaheim, in a lawsuit prompted by the give-away of $158 million in bed taxes to a wealthy and well connected developer. Superior Court Judge Steven Perk ruled that the City of Anaheim violated the Brown Act in voting for the insider deal without proper public notice.
On January 25, 2012, a 3-2 vote by Anaheim City Council granted an unprecedented subsidy to hotelier Bill O’Connell, for two luxury hotels to be built at the Anaheim Gardenwalk. With 20% of all TOT collected on site already diverted to Bond repayment for local improvements that benefit the Resort area, the authorization to double back and give the remaining 80% in TOT to the developer left the project devoid of public benefit into the General Fund. Opponents claimed they were unaware of a vote taking place that night, indeed, the item was listed on the Council Agenda stating, “This is a discussion item to consider the request of GardenWalk Hotel I, LLC (Developer) to amend an existing hotel economic assistance agreement and direct staff to draft and execute an agreement with the Developer in accordance with City Council’s action.”
By the end of the Agenda “discussion” the Council had not only voted in favor of the subsidy, they also ordered City staff to draft and execute the agreement without bringing it back to Council. Councilman Harry Sidhu voted for the subsidy, shocking nobody, as the hoteliers gave him significant funding for his recent (failed) run for office, prompting accusations of illegal donations. Council member Murray voted for the deal. Even if hotelier Bill O’Connell had not heavily donated to her campaign, even if he did not hold the purse strings to the major PACs in town, O’Connell’s longtime lobbyist is Curt Pringle, Murray’s mentor and friend. Murray was unlikely to say no to that combination. Gail Eastman’s jump into the pool was the shock to everyone, although her observation that nobody spoke in opposition was accurate, it was also a false flag, based on the lack of notice that the vote would be finalized at the meeting.
When locals came to the realization that the deal was done, all Hell broke loose. Mayor Tom Tait, one of the two “nay” votes that night, tried to call an immediate special meeting for January 31 “Review of amendment to economic assistance agreement with GardenWalk Hotel I, LLC; possible rescission of January 24, 2012 City Council approval and modification of terms.” Despite having a previous appointment in the building for an easily rescheduled meeting on graffiti, Council member Murray refused to attend the Special Meeting, and Eastman and Sidhu followed suit.
On February 21, activists at OCCORD joined with Amin David, Martin Lopez, Jose and Lorena Moreno in sending a letter via Briggs Law office, demanding that the City cure its illegal vote. Having been ignored, the activists filed suit, which they won today.
The irony is that had the Council simply attended the emergency meeting, and voted for the project after proper notice had been given, the lawsuit would very likely not have stood. Mayor Tait offered Council a way out, but seeing his offer as backing them into a corner, they refused to work with him, Their haste lost the whole enchilada for them.
If the Gardenwalk managed to hold on to the mystery investor that was putting up the money (for obscene returns on the investment, thus demanding the entirety of the TOT from the site) then Bill O’Connell, his partner Ajash Patel, and their lobbyist, Curt Pringle, will all need to return to the City of Anaheim, this time with appropriate notice to the public that the Council will in fact be voting on the issue and not simply “discussing” it, as was reported in January’s Council Agenda. Will the Council majority stay the course or wisely rethink the major mistake they made in January? How will newcomers Jordan Brandman and Lucille Kring vote if this comes back? All of this is pure speculation, and depends on whether the investor hung in there for that enormous payoff or moved on to a sure bet elsewhere. But for today, the public wins one, thanks to a bunch of activist rabble rousers.