Does Harrah Owe Santa Ana $300,000 for Special Election?


The site of One Broadway Plaza, a proposed 37-story office tower in downtown Santa Ana that a group of residents has been opposing. (Photo by: Adam Elmahrek)

Monday, Oct. 17, 2011 | Members of a residents group that opposes the 37-story One Broadway Plaza project in downtown Santa Ana are contending that the city was supposed to, but didn't, force developer Michael Harrah to pay the $300,000 cost of the 2005 referendum that green-lighted the project.

"Unbelievable, in a word." said Jeff Dickman, a member of the group known as the Coalition for Accountable Government Ethics (CAGE). "It's not like it was a $10,000 or a $20,000 bill — it was $300,000. It's really mind-boggling."

The residents are basing their argument on a clause in the development agreement that calls for Harrah to pay for "approval or certification" costs.

"I think it probably does require reimbursement for the special election. That clause is very, very broad," said Daniel Wildish, the attorney who represented the residents group in two lawsuits against the project.

The city still might be able to collect the money for the election, Wildish said, because the development agreement is in effect until April 2012. The city must then grant a two-year extension upon Harrah's request, according to the agreement.

However, Wilidish acknowledges that he hasn't studied the issue deeply.

Harrah, meanwhile, contends that he owes no debt for the election because it was not a special election.

"If it's a special election, there would probably be fees that I would have to pay, but if it was a normal election, there wouldn't be a fee, there wouldn't be a cost," Harrah said. "So we waited three or five months or something to go in the regular election."

And even if he did owe the money, Harrah said, the city never billed him.

"You're telling me that in 2011 there's a question as to whether I paid or not?" Harrah said.

"If I owed the city money, don't you think they would have sent me an invoice between now and then [2005]?"

On the issue of whether it was a special election, the record shows that Harrah is wrong.

The county registrar of voters' office confirmed that the election was a special election and that it cost the city $300,141.51.

No one, however, has been able to produce a bill to Harrah from the city. A response letter from the city clerk to a city resident declares there are no records of payments for the election, and a Voice of OC public records request for invoices has yet to be answered. Interim City Attorney Joe Straka didn't return several phone calls seeking comment about the situation.

Santa Ana City Councilmen Vincent Sarmiento and David Benavides said they would like to see the city collect from Harrah if he indeed owes the city money for the special election.

Benavides said that, although he wasn't on the council at the time, he does recall that Harrah is supposed to pay fees associated with the election. Benavides said he's not sure about the timing of the payment, and he said he wouldn't enforce a payment obligation before it's due.

"I don't think anybody is getting a pass, it's just a matter of when the payment is made. It may be that the construction hasn't begun," Benavides said. "If Mr. Harrah was in the position to pay those funds sooner rather than later, that certainly would be welcome."

Said Sarmiento: "Certainly if there's an outstanding debt that Mike or anybody else has that was rightfully incurred, I think there needs to be payment."

Current members who were on the City Council when the development agreement was approved — Carlos Bustamante, Claudia Alvarez and Mayor Miguel Pulido — did not return phone calls seeking comment.

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