Tomorrow evening, the Projects Subcommittee of the Southeastern Economic Development Corp. will consider what to do about the Valencia Business Park, a troubled project in Valencia Park.

In doing so, the committee will have to rely on an SEDC staff report that doesn’t mention that SEDC’s existing deal for the project has been deemed null and void in a legal opinion by City Attorney Mike Aguirre. The opinion said the agency violated the state’s conflict of interest law.

Some background: The previous board of directors awarded the development rights for the project to a Pacific Development Partners, a Los Angeles-based developer, twice. But, in July, Aguirre opined that the development deal was null and void because of a conflict of interest involving then-board Chairman Artie M. “Chip” Owen.

Owen has a continuing business relationship with PDP and had reported receiving between $10,000 and $100,000 a year for the last four years from the company. He recused himself from board votes involving the deal while he was SEDC’s chairman, but Aguirre opined that mere recusal was not enough, and that Owen’s relationship with PDP violated the state conflict-of-interest law.

There’s no mention of the opinion or Owen’s relationship in a new staff report authored by Jill Sabo, a project manager at SEDC. I called Sabo earlier to ask her why the conflict of interest issue isn’t mentioned. She had already left SEDC for the day.

It’s important to remember that seemingly the only reason the subcommittee is even being asked to talk about this deal is because of Aguirre’s legal opinion and the conflict-of-interest issue. SEDC’s board already approved giving the project back to PDP in July.

Presumably, by discussing the deal anew, the reformulated SEDC board is acknowledging that the old board’s approval of PDP as developer for the project is null and void. Otherwise, that approval would stand and the choice of developer wouldn’t even be under discussion; it would be on its way to City Council for final approval.

I called Gerry Trimble, managing principle at Keyser Marston Associates, who has been providing real estate analysis on the project for SEDC. He explained that there isn’t currently a deal that’s been struck between PDP and SEDC because the City Council has to approve any such development deals. Although SEDC’s board approved awarding PDP the project in July, that deal was never approved by the City Council, so there’s no contract yet, Trimble said.

Trimble said it’s good government for the new SEDC board to consider the deal anew. Considering the significant turnover at the board (which now has five new members) it’s only prudent for the Projects Committee to familiarize itself with the Valencia Business Park Project.

All this hasn’t escaped the St. Stephen’s Cathedral Church of God in Christ Ministries, a local church that is contesting the awarding of the project to PDP. St Stephen’s sent the Projects Subcommittee a letter today urging the committee to start again with Valencia Business Park.

“We have reviewed the staff report dated October 2nd, 2008 and we are still alarmed at the errors within the report and the omissions,” the letter reads. It continues:

Critical information is still being withheld from you. The report appears to be just a rehash of the previous reports by Carolyn Smith. Despite your request, the staff report again contains no reference, analysis, or discussion of City Attorney Mike Aguirre’s ruling.


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