Showdown tomorrow — make that “yesterday ” — at 7:00, Brea Civic Center.
The result of Brea’s City Council meeting was a decisive … something or other. It’s not clear precisely what happened – the motion passed puts two plans on parallel tracks without giving either one wheels – and it’s not actually clear whether it was decisive.
The best prediction one can make is that the Council won’t really agree about what it did and did not do – and that that disagreement will be in full flower this morning, if it didn’t already unfurl its petals overnight.
[1] If You’re Ever Given Two Options, Take Both of Them
The bottom line is that the Council agreed to pursue Option 2 (the plan that Dwight Manley and his fellow Downtown owner Mark Caplow favor, except without the “not-to-exceed-$9-million proviso that was mercilessly shot down by the City Attorney).
But it also agreed to pursue Option 3 – a plan to build a parking structure along with affordable housing units (which is favored by Councilwoman Christine Marick, repugnant to Councilwoman Cecilia Hupp for reasons that were somewhat unclear except that Manley and Caplow and “Riverboat Gambler” Manzella of TAPS don’t like it) – for three months. After that, the two plans will come back for a decision about which one will go out to bid. (This is complicated by the fact that only Option 2 would be ready to go out to bid. Option 3 would require more development first.)
Or, three months from now (if that schedule remains), maybe neither will go out to bid. Or maybe, despite warnings that doing so is bad form, one plan will go out to bid – inviting the expectation that the winning bidder will be chosen and the project will be given the green light – but the Council won’t go through with it because it can’t figure out how to pay the ticket price. Councilman Steve Vargas started the discussion of how the City would pay for it – yes, Bev Perry, in part he wants to tap into the 560 Fund, and Mayor Marty Simonoff and (we can presume) Hupp agree, and that’s a majority – but Councilman Glenn Parker forcefully declared that the Council would NOT!!! begin such an intricate and momentous discussion at 11 p.m. or so when had to get up to prepare for work at 4 a.m. (or so) and that was the end of that.
So: we’re making plans for window-shopping – and we have no idea how we’re going to pay for whatever we see. We’ll certainly have more information about Option 3 in three months, but we won’t really have more information about Option 2 – because the information we don’t have about Option 2 is how low various pre-qualified bidders will bid for it – and we can’t get that information until we’re ready to follow through with the plan, or else we apparently will develop a reputation as a “bid tease.”
And that’s not even the worst part.
[2] But Listen, Marty – SOFT Costs ARE STILL COSTS!
The reader may be excused for thinking based on the above that the game is over. And Manley – I didn’t get a look at his face as he left the room, which probably didn’t matter because he rarely has any sort of expression at all – may be declaring victory. But that would be premature. Mayor Simonoff may not realize how much his support was teetering, but it was – and badly.
The three presumed supporters of the Manley-Caplow project are an interesting study in contrasts. Vargas clearly knows what Manley wants, but he wants to be subtle and suave about it, often trying to wheedle concessions out of Team Manley, flat-out declaring (in not so many words) that he needs what he’s requesting for political cover. And, time and again last night, he was rebuffed. His clumsy pass at trying to decide on which funds to raid for the projects RIGHT NOW! seemed to confuse even his Council allies. You could practically hear them thinking “Dude…” from the audience.
Hupp is less subtle. Frankly, she’s not subtle at all. She has a tendency to blurt out her marching orders when uncertain to confirm that she isn’t risking Manley’s anger. When Marick presented her complex, for a while even verging on convoluted, motion to pursue dual paths, Hupp (who had clearly been instructed to hate Option 3) first reacted badly to it – but then she confirmed that the motion wouldn’t slow down consideration of Option 2 at all, at which point she was fine with it. I’m not saying that Manley wrote down “don’t let them slow down the progress of Option 2” on her palm in black marker – but he might as well have. One needn’t even really interview Manley so long as one can watch Hupp.
Simonoff is the brightest, smoothest, and most clever of the three – I know that I probably shouldn’t like him as much as I do, but I can’t help myself because he is so ingratiating – but that creates a real problem for him when her is being tasked to sell people organic burgers made from teeth, dead grass, rat fur, and just a little broken glass. He wants very much to take a reasonable position, to defuse any rising hatred against him, and so he has a problem when his reasonable position – which he has well-crafted to be reasonably reasonable – turns out to be inconsistent with what he’s being expected to do. And that’s what happened last night.
Simonoff made reference several times to the $9 million price tag of Option 2, which he said he was fine with, contrasting it with – horrors! – the $13 million price tag that some bloggers were writing about, which was obviously too much – and quite unreasonable. (Full disclosure: he was talking about me. Hi, Mayor! I really do like you, you know. You remind me of my uncle.) I disagree with him, but I have to admit that it’s a more reasonable position than some others. (If Hupp balled her fist so that when she opened it the black marker made it look like Manley wanted $113 million rather than $13 million, she’d go ahead and ask for the extra $100 mil.) (It’s just hyperbole, Marty!)
Anyway, here’s Simonoff’s problem: it really IS a $13 million – OK, $12.65 million, but we’re rounding up – price tag. Simonoff thinks that it was only $9 million because he’s only looking at “hard costs” – design and construction. But that’s not all that the City will have to pay for! The City will also have to pay for “soft costs” – required inspection, soil analysis, and various other things mentioned last night by the somewhat aggrieved gentleman who had done the analysis that informed the Staff Report. And when you are totaling up the cost of a project, you include both “hard costs” and “soft costs.” Because the City pays both!
Simonoff apparently didn’t realize – although I truly can’t understand how a bring guy like him didn’t – what I and other critics did: that that $8.9 million proposal from April 15 included only the hard costs, That is, it was not the actual final amount of money that the City would have to either borrow or take out of its capital reserves – and that is what matters. So now he’s committed to two incompatible positions: (1) that $13 million is waaaaay too much for taxpayers to pay for this worthy proposal and (2) that the plan he supports really may end up having a price tag in that neighborhood. It’s tough for him – but Manley will probably just demand that he retract that first statement and eat it. (“Be more like Cecilia,” he may add, pulling out a black marker.) Even at the end of the discussion, he was still complaining about reading on the blogs that the true figure was $13 million – although he seemed to pause when he saw me, his target, in front of him shaking my head “YES” like a bobblehead doll going over speed bumps. Maybe we need an intermediary, because I really would like him to understand that I’m not just making things up; I’m reading HIS OWN REPORT!
[3] A Bit on the Skeptics
Before moving on, I should characterize the opponents as well. Marick is clearly skeptical about how the deal pencils out for the City, but is reasonably enthusiastic about the project if it includes affordable housing, which unleashes all sorts of federal government grant money. (I’ll have to review the video, but she and the person she brought in to discuss Option 3 did a much better job of promoting it than I expected. Maybe it is plausible, even though it suffers from the hideous deficiency that it is Not What Manley Wants.) She’s asking questions out there that everyone except Hupp – who seems to have been designated to guard Marick when Team Manley is on defense – seems to understand.
If Marick is fencing with the opposition with a saber, former Treasurer Parker – who like Simonoff participated in the planning of Downtown Brea’s Renaissance back in the ’90s – was wading into the fight with a broadsword.
One great moment came when Parker answered Vargas’s contention that the City Council had made some sort of sacred vow that no one would ever have to pay for parking in Downtown Brea – except, apparently, for valet parking – by saying that the Council had done no such thing, which he knew because he was there. The decision not to charge for parking in Brea was a tactical one – a decision that it was not yet time to do so – rather than a solemn pledge that so long as the sun continued to rise over Yorba Linda and set over La Habra there would never be a charge for parking. It was always considered an option – short term or in the future (that we have by now entered.) Are we worried about people going to Fullerton instead? We should worry as soon as they get their own Improv.
(An obvious solution, by the way, is to charge a convenience fee for parking at least during weekend evenings, which is the only time that we really need the structure at all, so that people can enjoy standing in even longer lines at TAPS and Buffalo Wild Wings. And if a 24 Hour Fitness really is in the Superblock’s future, can’t those people walk from the West Birch parking structure? It’s exercise! Parker noted that when he and Marick met and spoke with the owner of the Improv, who apparently did give them a very good presentation, he didn’t object to charging parking for the structure, and this is as much being done to cater to his wishes as a tenant as anyone.)
Parker also said – not unreasonably – that like the original plan for Downtown the current plan had to be evaluated as an investment. And that means that one has to evaluate what’s called the “Return on Investment” – what does the City earn to offset the money it puts up?
Time for a reader quiz: based on the numbers presented, how long would it take for Brea to make back its investment in the parking structure – we’re not even talking about even a penny of profit here, but just how long it takes to break even – if the City puts in $9 million?
The answer? It would take Brea 40 years to break even.
Simonoff responded to that by saying something like “well, you don’t evaluate all investments by return on investment, this is like street repairs.” Marick and Parker looked at Simonoff, respectively sadly and incredulously, and told him that, no, spending $10 million-plus building a big parking structure in one block of Downtown was not like street repairs. (Like them, I suspect that at some level Simonoff understands this.)
Again, there are ways to structure such a plan so that it both earns a profit for Brea over a reasonable time period and protects Brea’s interests if ISIS were to blow up the proposed new Brea Improv building. Manley and Caplow just don’t want to do them. Arguably, if they want Brea not to act reasonably about investing one-third to one-half of its cash reserves, they should be prepared to pay for it.
[4] Vargas Does the Impossible Math, Improbably
Having gotten past the question of whether or not to continue making progress towards building a structure, the Council faced the question of how the City would pay for it. Vargas sprang into action, despite the late hour of around 11 p.m., loaded for bear. So at least now we know how at least one advocate of the plan wants the City to fund it – and we can evaluate how much it makes sense. (One caveat: while Vargas read the proposed numbers twice at the beginning of his presentation, like most people in the room I wasn’t expecting them to get to this huge topic at that moment, so it took me a moment to grab my notepad and I may be mixing up or otherwise being slightly off on the first and last number.)
As I recall, Vargas wanted to use about $2.5 million from the Redevelopment Agency funds that proponents believe are still waiting for the City’s use. It is doubtful that they will be released, and also doubtful that if released they will also remain earmarked for this project, which isn’t really Redevelopment.
These next two I’m sure about: Vargas wants to take $1.5 million from the “140” Capital Improvement Fund and $1.5 million from the “560 Fund,” as I had warned Bev Perry earlier this week was pretty much inevitable. Simonoff was reluctant to touch the 140 fund; Marick was reluctant to touch the 560 fund. Hupp was apparently willing to throw money from anywhere into the hopper pretty much indiscriminately. Parker wasn’t willing to talk finance until people agreed to evaluate the investment like an investment.
Finally, Vargas wanted to take somewhere around $2.5 to $3.5 million out of the General Fund — a little more than 20% of it. At different moments, he seemed to say that this totaled either $9 million or $8 million which was close enough; I will review the video at some point and clarify. (Or one of you readers can do so and let me know, along with a time stamp from the video. Thanks in advance!)
Two things jump out at me before even getting to the 560 Fund: (1) Vargas is trying to budget RDA money that we don’t even know exists, and (2) THIS IS NOT COVERING THE ENTIRE COST OF THE PROPOSAL. (Sorry to shout.) This covers only the “hard costs,” not the “soft costs.” That’s why it’s unclear that the Council has really committed to anything here — although if they have then it looks like — if they have a plan for the whole cost, it’s to take everything that the phantom RDA money doesn’t cover out of cash reserves, including the General Fund, the 140, and the 560. (As this is what I predicted, I’d like people to stop denying it, and especially doing so without facts.) It was at this point that Parker explained to the Council that it was CRAZY to have this discussion at that hour. (Don’t be surprised if there’s a special meeting called to continue it. That ought to be good.)
So that’s where things stand. We’re headed forward with Manley’s plan – and also not with Manley’s plan – based on spending money that we don’t have, in an amount millions short of what we’d actually have to pay.
If you’re entirely confused at this point, that probably means that you understand what happened last night!
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