Brea Council Meeting on Jamming Through $9MM Parking Structure, Part 3: “Blight” Caplow’s Hard Sell

Mark “Blight” Caplow, the man who has kept the Tower Records building empty and ugly for 8-1/2 years and counting, REALLY wants you to buy his high-intensity, high-pressure sales pitch.

7. 24 Caplow Claims, 24 BREAN Commentaries

I covered the first 30 seconds of Mark Caplow’s first speech to City Council on the $9MM parking structure here (where you’ll also see why I’ve now nicknamed him “Blight.”)  I’ll now summarize the rest of it in black and comment on it in green as we go.

I’m not focusing on Caplow because he was mean to me — that tickles more than hurts — but because he gave the most aggressive presentation of why Brea needs to spend this money right now.  (Dwight Manley’s was better, but we’ll get to that after this Tuesday’s meeting.)  If you want to understand the supposed rationale for this demand, it’s here.

Like most good salesman — and he certainly is one — Caplow makes lots of great promises.  But how many of them are guarantees?  The only guarantees are: Brea’s bank account goes down by $9,000,000, some developer and construction teams make money, the value of his property equity goes way up — and then we are guaranteed to have to hope that the plan pays off as advertised.  And if it doesn’t?  Then Brea’s taxpayers lose big time.

Can we improve this situation?  Let’s review the arguments.  Caplow makes these points:

(1) “This is not a giveaway.”  [Adding later: “Pleeeease stop using the words [sic] ‘giveaway.'”]

How could we tell if it’s a giveaway?  The test is: do Breans get good value for their money, or is too much profit diverted to the Downtown Owners while the risk falls mainly on taxpayers?  (If it’s the latter, it’s a “giveaway.”)

(2) It’s not political. That its getting political is really frustrating.

Dwight Manley and others spent huge gobs of money to elect Cecilia Hupp and Steve Vargas specifically so that they would approve this plan, so that’s clearly “political.”  Decisions about how to allocate large amounts of scarce City funds ARE as “political” as it gets.  Who does “Blight” think he’s trying to kid here?

(3) This is a correction to a previous flawed plan from years ago.

The supposed “flaw” in that plan was that Brea was willing to build a parking structure with redevelopment funds — and then those funds got taken away by the state.  That’s not Brea’s fault!  It was the investor’s gamble — and they lost.

(4) The retail world has changed and is struggling, so we need major changes to retail commercial areas.

Change may well be desirable, but that doesn’t make it a “NEED.”  It’s a desire competing with other desirable uses of money for scare City resources.  Right?

(5) “People write blogs about how we’re the evil people that are only in this for a profit.”

I’ve never called anyone involved in this “evil.”  I still don’t think that Manley and Manzella are “evil.” Self-interested, sure — but that’s OK — the City Council is supposed to guard against self-interested people if they try to take advantage of the City.  Now, keeping Tower Records empty for almost a decade to improve the case for a public subsidy?  Maybe still not “evil,” but at least closer to it.

(6) If what we do isn’t a “win-win,” it won’t be successful.  That won’t help anyone, but will just create more bankruptcies.

If Caplow’s plan is passed, he can sell the building the next day — and probably for a lot more than he could sell it for now.  That’s his “win” — if he wants it.  Under this proposal, he doesn’t need to stick around to see if we “win” too.  And, if his rosy predictions don’t come true, he wouldn’t “lose big” like Brea would.

(7) This project will revitalize a very underperforming Downtown Brea.

Except for Caplow’s OWN DECISION to let the Tower Records building sit for a decade while “underperforming,” Downtown is PLENTY “vital” and performing quite well!  Sure, it could be better — but by that standard many other businesses in Brea could make similar cases for subsidy!  (How do they feel about this?)

(8) The money used by the City will be paid back at an interest rate that is higher than the rate they are receiving right now.

Folks, I just don’t believe him here.  I don’t know if HE believes it.  This isn’t what the Staff Report says; it’s a rosy scenario that, as an astute businessman, he’d surely reject if he were in Brea’s shoes.  If he thinks that this a sure thing, then he can put up the deed to Tower Records building (worth about $4.5MM without a structure) against his promise not coming true, thereby protecting taxpayers!

(9) This will efficiently create diverse “income streams” for the City.

Maybe.  But: how “diverse,” how much “income” — and how reliable its flow?  (Should the Council ask these questions and have answers before they vote?)

(10) That proves it’s not a “giveaway.”

Yes, if the benefits to the City are high enough (and the Staff Report is therefore wrong), then it’s not a “giveaway.”  Now let’s figure out whether they are!

(11) The City will receive monies from the Parking Structure.

How can he make this assertion?  The City hasn’t decided whether to charge for parking and how much if so!  There’s no study confirming this prediction!

(12) It will increase the tax base, which means new businesses.

Is he talking about business license fees?  Sales tax (of which we get only 1% of the 8%+?)  Can we please project how much income we’re talking about — and how it compared to what we LOSE by not having $9 million cash in the bank?

(13) It will increase the property tax base.

The City’s not considering the bigger “Grand Plan” that Caplow presents below. And it’s true that if the plan increases valuations, it will also increase property taxes — but by far MOST of the financial benefit goes to him and Manley when their own property values increase!  So, again — who should pay?

(14) These “income steams” will pay off the City’s investment. and allow the City to invest in new projects and pay off old expenses from the rest of Brea: “pension funds, whatever.”

If it’s true, great!  If we just take this salesman’s word for it, then we’re morons.

(15) The “income streams” will “regenerate underperforming City-owned assets” like the City’s existing Downtown parking structures.

Now he’s trying to justify the $9 million expenditure based on a wild “Grand Plan” that is NOT EVEN CURRENTLY UP FOR CONSIDERATION, let alone having been covered in a proper Staff Report!  Is this how we make big decisions now?

(16) Money from the valet and the cell tower arguably  belongs to the BDOA.  It’s not in the General Funds.  Let’s stop talking about that now.

The money also “arguably” belongs to the City of Brea and NOT the BDOA.  Not only does “Blight” want to take $9M from Brea taxpayers, he also wants to take an already existing legitimate Brea taxpayer income stream as well! Can we ask Simonoff, Vargas, and Hupp whether they agree with him about this?  Is there some contract with the Brea Downtown Owners we don’t know about?

(17) The parking structure gets paid off with interest.  The City gets its money back.  Once the parking structure’s open, “we can revitalize two empty parking situations” for the City.

The first two are assumptions; the third is a supposition.  Show us the numbers!  And maybe share the risk instead of dumping it onto the City!

(18) “One parking structure has a big hole in out right alongside Brea Blvd.   And that hole brings the City in no money and creates a vortex of nothingness for any kind of walking environment.”   Let’s repurpose that for more profitable commercial uses.

So Part 1 of his plan is: let’s cut spaces out of the Brea Blvd. parking structure to create new storefronts?  Are we OK with that?  Have we even discussed it?  Are Breans OK with losing these free parking spots in return for “fee-based” spots?  Because, if not, then this supposed “advantage” isn’t happening!

(19) Apartments are being considered for new development that will need parking.  He has met with the developers.  They would pay the City money to lease parking from that site.

If so, great!  I’d love to see the numbers.  More importantly, I’d hate NOT to see the numbers prior to a Council vote!

(20) Mercury Insurance is very interested in long-term leases for parking on that site.

The Staff flat out said, later in the meeting, that this is NOT TRUE.  (Uh-oh.)

(21) This improves the Downtown experience  for all Breans.

This is vague and unconvincing.  And we care about the “BREA experience” more.

(22) It creates multiple income streams for the City.

Speculative and unconvincing.  At least one (Mercury) is already ruled out!

(23) It creates job opportunities for the citizens of Brea.

Maybe, IF things go as planned.  But would spending $9 million in another way create even more of them?  Have we, well, CHECKED?

(24) It’s not a giveaway; it’s not taking anything from anybody.  It’s a public-private partnership.

If his sales pitch is wrong, then it may be a “partnership” where the private side gets richer (and then perhaps waves goodbye) and the public side has a guaranteed $9 million debit and only the fading hope of breaking even. 

And he doesn’t want to give us enough time to study it thoroughly and figure it out?  That’s where I check for my wallet — and maybe even slam the door!

THE TRANSCRIPT, IN BLUE (time stamps are for Part 1 of Brea’s meeting video)

[32:55]  My name is Mark Caplow.  I’m the owner of the Brea Tower Records Building.  …

I heard before something that kind of makes me excited – that I’m going to make millions of dollars here.  And so I want to ask the blogger [turning most of the way around to look at Greg Diamond] can you please tell me, ‘cause I’d love to hear what your numbers are, because I have no idea how Dwight Manley and I are going to make millions of dollars on this project.  So please – if you can show me I want you as my accountant.

[33:27] Basically what we’re talking about here is not a giveaway, and  it’s not political, and it’s really frustrating that this is getting into politicalness.

This is really a correction to a previous flawed plan that was done years ago.  The world’s changed in 16-17 years.  The retail world has changed.  Are you all shopping at stores or have any of you shopped on the Internet?  Retail’s struggling.  There’s fewer and fewer that make it.  It’s time for major changes to all retail commercial areas.  This is no different than anybody else’s.

[34:07] But [here’s] what’s different on this proposal that we get no understanding from, from anybody.  People write blogs about how we’re the evil people that are only in this for a profit, and that’s it.

Well, you know what?  We do do this for a living, but at the same time if it isn’t a “win-win,” then it isn’t going to be something that’s successful.  And that won’t help any of us; it will just create more bankruptcies.

[34:34] What we’re talking about here is not a “giveaway.”  Please stop using the words [sic] “giveaway.”  This project will revitalize a very underperforming Downtown Brea.

The money used by the City will be paid back at an interest rate that is higher than the rate they are receiving right now.

This will efficiently create diverse income streams for the City.  What “giveaway” creates income streams for the City?

The City will be receiving monies from the Parking Structure.  It will increase the tax base, which means new businesses.  This will increase the property tax base.

[35:32] But new income streams will not only pay off the investment by the City, but allow the City to use the new income streams it creates to invest into new projects and pay off old expenses from other parts of Brea, wherever they use it: pension funds, whatever.

This is a living, breathing opportunity to create an income stream of multiple sources for the City.  Another example of those sources is to regenerate underperforming City-owned assets.  The City has a parking structure.

The money from the valet and the money from the cell tower arguably  belongs to the BDOA.  That is not and shouldn’t be in General Funds; we will leave that to the side for the moment.

[36:24] But what we’re talking about here is an issue where the parking structure gets paid off at an interest rate.  The City gets their money back.  Then, once the parking structure’s open, we can revitalize two empty parking situations for the City.

What do I mean by “empty” is [this]: you have two parking structures there.  One parking structure has a big hole in out right alongside Brea Blvd.  And that hole brings the City in no money and creates a vortex of nothingness for any kind of walking environment if you want to call it that.  That should be repurposed to commercial uses which gives the City more funds,

[37:10] Secondly, the rear parking structure which is never used.  There are apartments considered on the far side which need parking, that are being considered for new development.  Those parking structures – I have met with the developers, they’re willing to pay money to lease parking from the City from that site.

Mercury Insurance is very interested in long-term leases for parking on that site.  That opens up additional sources of income for the City.

This is not a giveaway.  This [is] an example of improving the Downtown experience  for all Breans while at the same time creating multiple income streams for the City, creating job opportunities for the citizens of Brea, to correct a previous flawed plan, and to finally get this right that this is not a giveaway, this is not taking anything from anybody, this is the true example of a public-private partnership.