In its heyday, Montebello was known as the Beverly Hills of the Eastside.
Perched on the rolling hills above the 60 Freeway, it was the move-up community for working-class East L.A. and Boyle Heights, with a municipal golf course, shopping mall and manicured parks.
Now tree trimming in the parks has been cut back. The city is seeking a short-term loan to avoid running out of cash in its general fund. State audits have found that officials mishandled millions, some of it on fancy meals and golf outings. The FBI also is investigating the city's use of federal housing funds.
Former Police Chief Garry Couso-Vasquez summed up the sentiments of many in the suburb east of downtown Los Angeles: It's not clear whether any crimes were committed by city officials, he said, but "it is a truly a crime what has happened to that once-great city."
For The Record
Los Angeles Times Sunday, September 25, 2011 Home Edition Main News Part A Page 4 News Desk 1 inches; 36 words Type of Material: Correction
Montebello: In the Sept. 24 Section A, the caption for a photo with an article about Montebello's financial struggles said that a bicyclist was dodging overgrown tree branches along Beverly Boulevard. The street was Garfield Avenue.
Montebello's fall is a story of a political and financial breakdown marked by recall elections; bizarre lawsuits; missing and falsified records; and allegations of sweetheart deals. The cast of characters includes a powerful developer who received millions of dollars for redevelopment projects and a political consultant known to some in town as the mysterious Englishman.
It's a sign of how bad things are that city officials openly admit that incompetence has fueled many of the problems but insist that Montebello is not mired in corruption.
"Montebello is not Bell (not a deliberate and consistent march to corruption)," Darrell Heacock, the interim city manager, wrote in a recent presentation to the City Council.
"It's embarrassing," said Heacock, the former president of the Montebello Chamber of Commerce whose family has lived in the city for generations. He said he spent a recent morning with other business people, eating doughnuts and lamenting the state of the municipality. "I can't begin to explain it."
Montebello's struggles can be traced to the recession of the early 1990s, which hit both the city's coffers and local businesses hard.
Whittier Boulevard, the city's once-vibrant main street, needed sprucing up. As did many other cities, Montebello responded with a variety of redevelopment projects, including several along the 60 Freeway, and the City Council awarded tens of millions of dollars worth of work to close personal friends and top campaign donors.
One prominent beneficiary was Hank Attina, a friend of former Mayor Art Payan and former councilman and current City Atty. Arnold Glasman. Companies tied to Attina got about $30 million for a restaurant and three senior citizens housing projects.
All four projects were funded by the redevelopment agency.
The money for the housing was in the form of loans that would be forgiven if the developer completed the work as promised, a standard practice for building affordable housing.
The city originally envisioned the restaurant as a Latin-themed Hard Rock Cafe-style establishment that would be a regional draw. But when that plan got bogged down in a lawsuit, an Applebee's was built instead.
The city also partnered with another large campaign donor, Brad Perrin, a partner in companies that manage a hotel, the Hilton Garden Inn, and another company that manages the banquet facility on the grounds of the city's golf course.
City officials now say Montebello isn't making much money on the Perrin deals and is trying to determine why.
Both Attina and Perrin defended the arrangements, saying that they delivered on their contracts and that the projects benefited the city. "We did what redevelopment is supposed to do," Attina said of his projects. "Bring in jobs, property tax."
Perrin added that he has boosted the fortunes of the properties he manages. "We turned it around," he said.
Heacock, of the Chamber of Commerce, said those living in the senior housing units "feel very blessed to have these places."
But the developers' ties to city officials sparked suspicion, with some critics questioning whether the redevelopment money could have been better used to bring more businesses to the city. "It was very lopsided," said former City Treasurer Gerri Guzman. "It left us short of the resources to draw on."
Payan and several other longtime council members stepped down or lost their seats in the late 1990s and early 2000s. With the old power brokers gone, Montebello politics descended into a wild and ugly place that kept the city inflamed in a cycle of recalls; nasty mailers; and police and district attorney complaints for years.
By 2005, a new council majority had come to power. They fired the city manager, Glasman and the economic development director.
"We wanted a fresh start," recalled former Councilman Jeff Siccama, who was elected in 2005 and ousted two years later in a recall election. "There were too many sweetheart deals."
But the new council members failed to generate much economic development for the city. When they publicly discussed dissolving the Fire Department, the council members were driven out of office in 2007.