Sacramento's "Gang of 60" City Hall Takeover

The “Sacramento 60”? The “Gang of 60” is more like it.

A piece in The Sacramento Bee recently trumpeted the latest public-relations smokescreen on behalf of Mayor Kevin Johnson’s “strong-mayor” effort: the “Sacramento 60,” a developer-heavy group of business folk who have pledged their fealty to Johnson’s push for more power.

The developers gathering behind this current attempt at bulldozing a boss-mayor proposal onto the ballot are the same, familiar, often Republican faces (and pocketbooks) that have been with Johnson since the nascent days of his mayoral bid; no one should be surprised or impressed by this particular dog-and-pony show. What is interesting, and yet predictable, is that among the Gang of 60 are developers and builder-types who have directly benefited from the “Permit-gate” scandal – a still-unfolding story that has exposed how members of the development community have gained a stranglehold on City Hall.

More than 2,500 pages of documents released by the city on projects under scrutiny in the Permit-gate probe show developers have been allowed to build without approvals, skirt safety and environmental regulations, and apparently dodge hundreds of thousands of dollars and possibly much more in fees – in short, to have free rein at City Hall.

Mayor Johnson and the Gang have banded together to protect this new culture at City Hall. They’re using their money and influence to try to stock the Sacramento City Council in this election cycle with hand-picked, pro-builder candidates. Johnson recently tapped another Gang of 60 member to the City’s Planning Commission. Add in the strong mayor effort, and it equals a bid for unchecked power for developers.

Neither Johnson nor the Sacramento 60 has released a full list of its members. A roster of members was compiled from three sources: a May 27, 2010 article in the Bee on the Sacramento 60; a May 3, 2010 letter signed by several members of the Sacramento business community urging that a “charter reform package,” including the strong-mayor initiative, go on the November ballot; a November 30, 2009 letter signed by several people in the business community lauding the management leadership of Kerridge.

A few of the players in the Gang of 60/Permit-gate mix, based on a review of public documents:

•John Saca/Saca Development

Saca took full advantage of former City Manager Ray Kerridge’s “get the customer to success” directive with his $300 million proposal to build twin high-rise condo towers downtown. Sacramento officials broke city rules and allowed Saca to begin construction without needed permits, plan checks or paying most fees, city documents show. The city also gave him a break on sewer costs. Saca ultimately abandoned the project, leaving a hole in the ground and not much else. The total sum the developer paid the city: $5,045.

During the two years Saca worked on the towers project, city officials in emails said he claimed he had a deal with “the city” to defer fees and have Sacramento taxpayers foot the bill for his assessments. It was never disclosed with whom Saca made his agreements, and a formal fee deferral contract -- required by city rules – was never found. City emails note that the fee rate at which Saca was assessed was more favorable than those required of other developers. The city eventually issued a demand letter to Saca for $745,973 in unpaid fees. Kerridge, who has since resigned, that same month unilaterally readjusted the bill downward to $546,000. That amount finally was paid by the company that took over Saca’s interest in the project. Net loss to taxpayers: almost $200,000.

Despite this dismal record, Saca is back wooing the city with another high-profile project – redeveloping portions of the city’s blighted K Street. He’s working with Jon Bagatelos, another prominent Gang of 60 member who comes with his own interesting baggage. Read more: http://bossmayor.com/2010/03/strong-developers-initiative.html

•Eric Rasmusson/Holloway, Rasmusson and Molodanoff

Rasmusson, who has since left the Holloway firm, represented Saca in the twin-towers debacle and was involved in the questionable fee discussions. Rasmusson also represented Innovative Structures, the company behind the A-1 U-Stor project on Stockton Boulevard, where construction was allowed to proceed prior to plan checks, fee payments and without permits. Why would a developer of a storage facility pay for a liaison to City Hall? While no one can know for sure, records show that through Rasmusson’s efforts, Bill Thomas, Sacramento’s building chief, intervened. Ultimately, the developer ducked more than $237,000 in Jacinto Creek Planning Area fees.

Internal emails show that the City Attorney’s staff determined that fees for the A-1 U-Stor project could not be deferred without City Council approval. When advised of this, Thomas withdrew the request and said the fees would be paid in a few days. They weren’t. The building ultimately was allowed to be completed and was even issued a certificate of occupancy. The City Attorney’s office was forced to go to court to collect the $235,780 in unpaid fees – at which point the developer filed for bankruptcy. The city to date has recovered no money.

•Kit Miyamoto/Miyamoto International

The city allowed construction to begin and inspections to occur at Miyamoto’s Le Rivage Hotel site before fees were paid or permits issued. City staff told the council that there was a prior agreement to defer fees under a special program; the City Attorney’s subsequent research not only showed that the program in question did not apply but that the purported agreement did not exist. City staff then recommended a loan to the developer, but later withdrew the recommendation.

Some fees finally were paid. Certain permits were not obtained, however, and an inspector issued a stop work notice on a pool and spa. The City Attorney’s summary said work was completed anyway, along with a deck and signs. In February 2010 the city ordered the facilities closed until compliance measures were taken.

Other Gang of 60 members with Permit-gate connections include David Moore and Gregory Anderson of Rex Moore Electric, which was granted a permit for Saca’s twin towers site without paying a plan check fee, according to city documents. Others are Kip Blewett and Peter C. Thompson of Rubicon Partners, the firm that had yet to pay $59,000 in fees for its project at 926 J Street, according to the City Attorney’s findings. And, Steve Goodwin was noted by the city documents as “probably” having a fee deferral agreement for the mixed-use development Township 9.

Robbie Waters, Dan Waters and the Gang of 60

Much cross-pollination exists between the Gang of 60 rolls and Robbie Waters, the council’s lone Republican. His most recent campaign statement reads like a Gang of 60 Who’s Who – he’s received more than $20,000 from its members.

Waters is also the father of Dan Waters, who has emerged as Permit-gate’s central figure. Dan’s activities as a supervisor in the city’s building department prompted the initial Permit-gate investigation when it was revealed that he had quietly issued 35 permits to builder K. Hovnanian Homes in the Natomas flood zone in violation of city regulations. Local land use attorney Gregory Thatch represents K. Hovanian and serves as Water’s finance co-chairman. Thatch donated $1,500 to Waters.

Dan Waters also issued a permit extension to developer (and former GOP congressman) Doug Ose, even though Ose did not formally request one. Ose subsequently contributed $1,500 to Robbie Waters.

Dan’s activities are now the subject of a probe by the California Fair Political Practices Commission to determine if conflict of interest laws were violated.

Read more: http://www.sacbee.com/2009/10/21/2267372/editorial-natomas-fiasco-demands.html#ixzz0pG7bEjQN

Bottom line: ordinary citizens who seek building permits still must follow city rules and pay their fees on time – but Mayor Johnson and his Gang of 60 want continued carte blanche for developers at City Hall.