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Attorney Charges Conflict of Interest in Renewal Project

September 17, 1987|MIKE WARD | Times Staff Writer

ALHAMBRA — An attorney representing businesses that are fighting the Redevelopment Agency's proposal to buy their land for a car dealership urged the City Council this week to halt the project because of alleged conflicts of interest.

Attorney Donald Drew charged that the Redevelopment Agency is seeking his clients' property instead of a site across the street occupied by Progressive Savings & Loan because of council ties to Progressive. Three council members own stock in the savings and loan firm, whose officials had originally agreed to move but have since changed their minds.

City Manager Kevin Murphy denied the charge, contending that legal entanglements make acquisition of the Progressive site impractical. He said the council has followed legal advice in dealing with the conflicts, and he noted that just this week a Burbank Superior Court judge upheld the procedures the council followed in a similar case.

Many Oppose Plan

Drew raised the conflict-of-interest issue Monday night at a redevelopment board meeting attended by 150 people, most, if not all, opposed to the plan to relocate 10 businesses, a center for the blind, two homes and a church to clear 3.2 acres on the south side of Main Street between Poplar Boulevard and Primrose Avenue for a Pontiac dealership. Drew represents three of the businesses.

The City Council, which sits as the redevelopment board, delayed action on a proposed agreement with the Pontiac dealer until Sept. 28 to give the agency time to discuss relocation with property owners and tenants.

Before the four-hour hearing began, Mayor Mary Louise Bunker and Councilman Talmage V. Burke removed themselves from voting on the project on the advice of Redevelopment Agency attorney Peter Thorson, who cited their ownership of stock in Progressive.

Thorson advised Councilman J. Parker Williams that he could vote on the project even though he, too, owns stock in Progressive. Thorson cited a Fair Political Practices Commission opinion that allows a council member with a conflict to vote on a matter when his participation is required for a quorum.

Owns 'Minimal Amount'

Thorson said Bunker and Burke each own less than 3% of the corporation's stock, but their holdings are far greater than those of Williams, who owns only a "minimal amount" of stock.

Drew charged that Councilman Michael Blanco also has a conflict of interest because he owns property in the redevelopment project area.

But Thorson ruled that there is no conflict because there is "no evidence" that the proposed auto dealership would have any financial impact on Blanco's property, which is a mile and a half away.

Blanco said Drew raised the same conflict-of-interest issues in seeking to block the city's acquisition of property for a Honda dealership three blocks from the proposed Pontiac site, but a Burbank Superior Court judge this week upheld the city's actions.

"That's true," Drew said, "but we didn't know as much as we know now." Drew said he was unaware until this week that Williams held stock in Progressive Savings & Loan, even though Williams' holdings were disclosed earlier in city documents and news reports.

Drew said Councilwoman Barbara Messina, the Redevelopment Agency chairman, is the only council member who seems to be free of all conflicts in the redevelopment project area. He said the other council members should be replaced on the redevelopment board to avoid conflict-of-interest problems.

Drew told the council: "It is certainly highly suspect at best to have three people on the board with stock in Progressive Savings & Loan and you decide you won't take their property, but instead you'll go across the street and wipe out all of these longtime businesses."

City officials said they originally planned to put the auto dealership on the Progressive property, but the deal collapsed.

The Redevelopment Agency in March approved an agreement with a Riverside auto dealer, who plans to buy Superior Pontiac in Monterey Park and move the agency to Alhambra on land occupied by Progressive Savings & Loan and by 14 apartment units.

Got Court Approval

Michael Martin, deputy director of the Redevelopment Agency, said that because of the council members' stock ownership in Progressive, the agency went to Los Angeles Superior Court to obtain approval of the auto dealer agreement and the purchase of the Progressive site.

Martin said Progressive, which had agreed earlier to a relocation plan, challenged the city's right to take the property and the court action was dropped.

Murphy, the city manager, said the savings and loan opposed the project after delving into the terms of a lease-back arrangement it had made with 10 investors on the property. Murphy said Progressive discovered that its option to buy back the property from the investors could not be exercised for 15 years. He said the savings and loan then became concerned that it would not be adequately compensated for its lease and property interests.

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