“Just Pay For It, We Have the Three Votes”

.

.

.

The Voice of OC has made available the depositions of Wally Kreutzen, Great Park CEO from 2005 to 2007, and his CFO Colleen Clark, as taken by Judge Nancy Wieben Stock

The depositions make clear that Larry Agran had tight control the entire process from the earliest stages, and that Larry exercised this control through Arnold Forde of Forde and Mollrich and Yehudi Gaffen of Gafcon.  Both City and Great Park staff found this arrangement deeply frustrating. When these “consultants” were challenged, each would make clear that they spoke for Chairman Agran.   When CEO Kreutzen would challenge billing for work that was out of scope for the contract, and thus needed Board approval, CEO Kreutzen would be told “Just pay for it, we have three votes.”

Beth Krom, as mayor, was extensively informed of these problems during 2006 by CEO Kreutzen.  In particular, Mayor Krom was informed in 2006 that the financial plan wasn’t even remotely feasible.   $200 million was available, but the planning proceeded on the assumption of $1.4 billion for construction alone. That $1.4 billion did not include maintenance or operations.  Also, that $1.4 Billion assumed 35 years of RDA receipts.

Below are my raw notes on the Kreutzen deposition to help navigate 48 rather dry pages. The fun stuff is concentrated on pages 35 through 41.

Deposition of Wally Kruetzen by the Hon Nancy Wiebenstock.

pp 6-10

Kreutzen was CEO of Great Park from Jan 2005 to Jan 2007, and then became asst. City Manager. Was hired based on interview solely with Larry Agran.

Colleen Clark was his CFO

In 2005, was seeing only “Very conceptual” design work (three years after Larry Agran laid out clear design goals in this LA Times editorial)

p 21-22 Gafcon and Forde were not invited to  meetings, but “invited themselves to meetings”, at the behest of “Chairman Agran. and At times Board member Krom.”

p 22 “[Larry Agran] was actively involved. He spent a lot of time meeting with the Design Studio sub-consultants [Forde, Gafcon] ”

p 23 Tries to Suggest Krom was deeply involved, but Wally responds “she was the mayor:

p 24  “[Krom] was a recipient of information, as opposed to suggesting information”

p 25   turns to funding mechanisms

p 26 “It was projected that funds would come in from the Redevelopment Agency, but the way redevelopment funds work, it is contingent on development occurring. So you needed to have development in the surrounding private lands owns dby Lennar well on its way before any  revenue could come in”

p 27.  $200 million was available, but the planning proceeded on the assumption of $1.4 billion — Just for construction. That $1.4 billion did not include maintenance or operations.

p 28.  Using RDA money required stretching the plan out to 35 years.

p 30  Q [Judge  …]  Did you come to believe at some point in your tenure, that your views were considered too negative, or perhaps you were the buzzkill in the room, that your views were, and you weren’t going to be heard any further?

A [ Wally Kreuzen]   I think some people thought I lacked vision by bringing up issues, such as financing and “How are you going to operate the park?

The folks unhappy with Kreutzen were the Design Studio sub-consultants ( i.e. Gafcon and Forde)

p 31  Wally wanted to hire experienced, outside designers for the Lake, Sports Park, and other crucial design elements.  Larry Agran, with Forde support, insisted this stay in-house with Ken Smith (meaning, really, Gafcon and Forde).

p 31 -33  Conversation about interactions in 2006 with the now-City Manager, Sean Joyce. Heavily redacted.

p .34 “I was unhappy in the position, as it should have been a really phenomenal job, given the opportunity…  The consultants (Gafcon, Ken Smith, Forde) were running the project, not the staff”

p.35 Direct discussion of Forde & Mollrich — a valid choice for PR that needed to be done. but vastly overpriced for the working being performed. “Mr Forde was more involved in what I would call conflict resolution.”

p. 39 Every month program manager Bovis Lend Leas would raise issues with the Gafcon and Fored invoices. The would lead to meetings, where Forde would have a mako role.  Much questioning of whether this was  a proper role for a Communications Consultant.

p. 40 judge Do you recall being advised by Mr. Forde or Mr Mollrich to the effect, “Just Pay for it, we have the three votes?”

[Kreutzen] “I was told that on numerous occasions.”

p41.   “ultimately the City Council approved the budget.”

p 41-42 Forde spoke for Larry. Do not challenge Larry, because any dispute will go the board, where Larry had a controlling majority.   Kruetzen that this was an… unusual arrangement. That as CEO he taking orders from a communications consultant.

p 41 The particular disputes that arose in this context were  “The design studio, or components of the Design Studio working outside of scope”

p 42 discussion Gafcon starts in the middle

p 43 Many billing disputes with Gafcon.  When confronted, Mr Yehudi Gaffen of Gafcon would say “I was told to do so by the  Chairman [Larry Agran]”

p 45 “I really came in thinking it would be a more or less normal governmental operation”  It wasn’t.