Council Holds Closed Session
by Larry Gilbert

There were two Closed Session items during the Dec. 21 "Special Meeting" of the "Mission Viejo city council, the successor agency to the community development financing authority, and the housing authority."

The first item, which is the subject of this post, related to anticipated litigation against the state Department of Finance. We've all seen the headlines. Governor Brown is trying to claw back... several billion dollars from these 400-plus agencies to plug part of the hole in our state budget. In question on Dec. 21 was a questionable transfer of $4.8 million to our newly formed housing authority from our redevelopment agency (formerly titled "Community Development Agency”). Those funds were given to a developer for a new housing project on Oso Parkway adjacent to the Mission Viejo Country Club called Watermark. As a result of the dissolution of these agencies council member Cathy Schlicht has repeatedly challenged the council majority and staff on this improper transfer since the first of this year. In the city attorney's report, based on the Closed Session meeting, and followed in Open Session, the vote not to initiate the litigation was 4-1 with outgoing mayor Frank Ury voting NO in protest.

In my presentation I did ask staff when we would be cutting and mailing the $4.8 million check. We have five days to comply. One positive step taken by the council when this all began was to have Watermark give the city a Letter of Credit or similar secured document to backfill the same amount, should the state take this money, which they are now doing. At this early phase I cannot think of what reaction we might have from this developer. We've already granted a density bonus for the project. They might request reducing the number of affordable units. We will simply have to wait and negotiate if necessary.

Mission Viejo resident Joe Holtzman commented on the above post: “The Redevelopment Agencies should be hammered shut. They were engaged in Reverse Robinhoodism. Steal from the poor and give to the wealthy. Chief benefactors were lawyers, bond sellers, fat cat developers, and lazy car dealers. Goodbye thieves!”

Larry Gilbert responded: “Some inside baseball facts on the actual proceeds and expenses of our Mall redevelopment project, which began 6-9 MONTHS BEFORE council approval of the $41.1 million bonds. Beyond the $35 million to Simon Properties. $150,000 to Capo USD, $2,369,500 for (1st year) debt service, $1,987,473 to pay semi-annual on Bonds, $437,671 to issue the Bonds, $692,797 "recurring Bond related admin., $115,769 for a "LC", $250,400 Bond Underwriting, $36,937 Title Ins., and $62,453 contingency. As you can see there are multiple groups who line up at the public trough whenever they smell RDA.”