Follow the Money - Part 3 (The Shopping Centers)

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In Part 1 of this series we looked at the money flows between city council members’ election committees and companies that do business with the city. We found that city council members’ election committees received nearly $100,000 from these companies and the city council members approved millions of dollars in contracts and concessions that benefited these same people and businesses.

In Part 2 we looked at which Council members election committees took the most money and we traced some examples of how the money flows, to the council members’ election committees and to the companies that give the members this money.

Here in Part 3 we are going to look at something more subtle – what kinds of concessions companies received from the City and how the money flowed. In my blog “Put Lake Forest First” we already looked at how City Council members’ election committees accepted thousands of dollars from developers and then approved millions of dollars of zoning changes and development plans that will strangle our city with traffic, but earn the developers millions of dollars in profits. Let’s not dwell on that example (which I cover in more depth in “Traffic Tsunami”), and look at another example - shopping centers.

Did you ever notice that some shopping centers in Lake Forest look really good and some look really bad? Some are nearly 100% full and some are nearly 100% vacant. Take a look at some of these photos I took.

The triangle shaped shopping center El Toro Plaza on El Toro above Trabuco has been on hard times for years. It’s practically a ghost town.

On Muirlands and Lake Forest Drive, more than half the storefronts are vacant.

On El Toro and Rockfield, the PetCo shopping Center looks like it belongs in East Detroit.

Then we come to The Orchards and The Arbor. These are the good ones. They not only look good, they are virtually 100% occupied. And the City spends thousands of dollars every year promoting events at The Orchards/Arbor, and it is the only shopping center listed on the city’s website.

Why is it that within the same city we have some shopping centers that are doing very well and some that are doing very badly? There are probably many reasons, but since our subject is “Follow the Money”, let’s look at the money flows.

Westrust Ventures (dba Walf) is one of the chief architects of The Orchards. Here’s their pattern of contributing to the City Council members’ election committees (EC) -

• 10/13/2006 - Walf gave Dixon EC $1000
•  11/3/2006 - Walf gave Dixon EC an additional $995
• 11/3/2006 – Charles F. Smith gave Dixon EC $995 (Smith is the managing director of Westrust Ventures and Walf dba Westrust, but this relationship is not shown on the Form 460 so it looks like a personal contribution).
• 11/6/2006 - Walf gave Herzog EC $1000
• 11/6/2006 - Charles F. Smith gave Herzog EC $1000

Shortly after this money changed hands, Walf and the City entered into an agreement to improve property around the Orchards, so Walf pulled a double whammy – they got paid to improve city property around the commercial property they already controlled, making their own property even more attractive.

Up until 6/30/2010, Walf received nearly $1,000,000 from the City. Meanwhile, the city schedules events at The Orchards that brings in thousands of visitors and helps advertise the area, free of charge. When was the last time the City held an event at the Pet Co Shopping Center across the street? Or the Stater Brothers shopping center?

Is it a good thing that the City sponsors so many events that help the Orchards? Of course it is. But consider that the Orchards is probably weathering the economic downturn better than almost any other shopping center. So shouldn’t the City be worried about all those other shopping centers that could really benefit from the publicity and the foot traffic? Yet the focus stays on The Orchards.

Once more, I can’t stress enough that the actions by Walf and by the City Council members who accept Walf’s money are not illegal. Everyone is acting within the scope of the law. Even the fact that City Council members do not disclose accepting money before they vote on an issue is not against the law. The fact that companies appear before the Council and never mention that they gave the Council members committees money is not illegal.

Having acknowledged that we are not dealing with violations of the law, is there anyone out there who believes that this is the proper way to run a government? Is there anyone out there who can say they are proud of the fact that our city council members election committees accept money prior to and after awarding contracts and concessions to people and businesses who gain financially from the votes of the council members?

Without the influence of developer money, would the city council members have approved increasing the city by 3,000 homes and tens of thousands of new people and cars even though our existing traffic problems are long standing, well known, and show no signs of getting any better? You tell me.

Without the influence of the property owner's money, would the city council spend millions improving The Orchards area and using it for city sponsored events, even while other shopping centers in the city are on the verge of looking destitute? You tell me?

Perhaps you’re thinking – “No harm, no foul?” But there is harm. Everyone in our city is going to be harmed by the influx of tens of thousands of new people and cars as a result of the decision to  approve the plans of the developers. Owners and tenants of every other shopping center are harmed when the city focuses its attention and money on The Orchards, and as the stores in all these other shopping centers close, one by one, the people of our city are harmed by losing these stores.

To summarize, whether we are looking at companies that do business with the city or companies that seek concessions from the city, we see a pattern that companies that give money to city council members' election committees get decisions from the council that increases their wealth - companies get contracts, developers get zoning changes, property owners get special treatment.

In our next two blogs we are going to look at some examples in greater detail to determine how closely city council decisions follow the money.