Redevelopment: Project Foe Alleges Council Votes Are Null and Void
The Padres and the city settled one lawsuit last week concerning the ballpark, but got hit with another suit filed by Bruce Henderson.
If you’re keeping score, that translates to seven lawsuits filed by clients of Henderson, a former San Diego city councilman, and a total of 11 cases still pending in the courts over the ballpark. The Padres hailed last week’s settlement with the Coalition Advocating Redevelopment Excellence, or CARE, as a key step in removing legal challenges to the project. CARE, which represents several community groups from neighborhoods surrounding the ballpark, alleged the city’s environmental report for the ballpark was inadequate. The suit was on appeal after it was dismissed in Superior Court in March. “This agreement is another significant step forward in our efforts to deal in an orderly fashion with all the legal issues and neighborhood concerns regarding the ballpark and redevelopment project,” said Padres President Larry Lucchino. Under the agreement, the city promised to make reasonable efforts to provide adequate maintenance, traffic and parking management, and public safety services during ballpark events to the neighborhoods of Sherman Heights, Barrio Logan, Golden Hill, North Park and Uptown. “While this is not a perfect agreement, it does add a level of accountability to the environmental issues that we felt were not addressed in the (environmental impact report),” said Cindy Ireland, a spokeswoman for CARE. As part of the settlement, the city agreed to pay up to $20,000 for a traffic consultant to help develop a traffic management plan. The Padres agreed to work with local transportation officials and inform ballpark patrons the best routes for arriving and leaving the stadium. Yet no sooner was one legal obstacle removed, another was thrown in its place.
Henderson’s latest suit alleges the City Council’s most recent appropriation of $10 million for ballpark construction, as well as every action related to the ballpark taken from March 1999, is null and void. The suit alleges that one or more members of the City Council are guilty of conflict of interest violations, and hence its actions are invalid. The allegations stem from revelations several months ago that Councilwoman Valerie Stallings purchased and sold stock for profit in Neon Systems, a public company that Padres owner John Moores chairs and holds a substantial interest in. Stallings, along with other council members, have been interviewed by the FBI as part of an investigation into whether any conflict of interest violations occurred. Assistant City Attorney Les Girard said Henderson’s latest suit was expected, and except for vague allegations concerning the conflict of interest, was nothing new. “Of the nine causes of action in the lawsuit, eight have been litigated before and he has lost each one of those issues,” Girard said. Henderson said he filed the latest suit in reaction to the council’s action in July approving interim funding for the ballpark, an action he said violated several city charter laws. In the event the current criminal investigation does conclude there were conflict of interest violations, it doesn’t necessarily mean all of the council’s votes would be void, Girard said. A single member’s vote may be negated, but that would still result in nearly all the council’s votes on ballpark issues as 8-0, rather than 9-0, he said.
Girard said there was no timetable for the investigation to be concluded. The U.S. Attorney’s Office, assisted by the county District Attorney’s Office, is heading up the probe. The FBI is the federal investigating arm for the U.S. attorney. The county grand jury has issued subpoenas for reams of city documents related to the ballpark actions taken by the council over the past two years.
Still No Bonds
The criminal investigation and civil litigation surrounding the ballpark have prevented the city from issuing up to $299 million in tax-free bonds to pay for the city’s share of the ballpark, now estimated to cost $450 million.
Because of the legal problems, such bonds would be considered a high risk, and require much higher interest rates to attract investors.
Although the city and Padres cobbled together an interim financing package of about $30 million last month to keep the construction going, those funds are expected to be spent by late fall. Girard did not know when the courts would rule on Henderson’s appealed litigation. He said city attorneys are now responding in briefs to most of the appeals, that the city hopes oral arguments will be heard before the end of the year, and decisions made shortly after that.
Henderson’s suits alone were keeping two city lawyers and one contracted outside litigator busy, while the other ballpark suits required two to three in-house attorneys and at least one outside specialist, Girard said.
He declined to speculate how much the city was spending to deal with the litigation.
The Padres and city entered into an agreement to build the ballpark in the East Village section of Downtown in the summer of 1998. The pact was approved in November of that year by nearly 60 percent of voters. The agreement called for the city, its Downtown redevelopment agency, and the San Diego Unified Port District to fund nearly $300 million for the ballpark, then estimated at $411 million.
The remainder would be paid by the Padres. A cap on the city’s cost for construction was put at $267.5 million. The city and Padres negotiated responsibilities for land acquisition costs in excess of $143 million earlier this year.