Community Editorial: A System Failure at Anaheim City Hall

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Whether you’re for or against the $158-million subsidy in Anaheim, it’s clear that the process for approving it was not very inclusive.

That’s the central theme that came forward at the Voice of OC February Community Editorial Board on Tuesday, featuring invited guests county Supervisor Shawn Nelson, who represents Anaheim, and Anaheim Chamber of Commerce President-CEO Todd Ament.

“If you’re going to have the public create a financing vehicle for this, what right do they have to know what you’re doing?” asked Nelson, who criticized the lack of sunshine on the Anaheim hotel subsidy. “What’s the public’s right to know?”

Since City Council members approved the hotel deal last month on a 3-2 vote, labor and community activists have protested not only the deal points but how it just appeared on a council agenda with little warning.

“It’s a total system failure,” said OC Labor Federation Executive Director Tefere Gebre — who is also an editorial board member — of the lack of hearings or discussion about the subsidy deal before it was approved.

Ament defended the $158-million subsidy, arguing that it had been in the works for years and discussed privately among chamber members as well as city officials and council members.

He wondered why all the protests came after the vote.

Yet it’s clear that the issue isn’t over.

On Monday, ABC news held a town hall meeting in Anaheim that among other things addressed the subsidy.

The Community Editorial Board focused on the subsidy from a policy standpoint.

To start, editorial members examined the three-page report prepared by Anaheim city staff that concluded the subsidy was too big and stretched over too many years.

“These deals are financial packages,” Nelson said, “and if the public is going to be involved in a subsidy, then there’s the question of how much do they get.”

“Understand what you’re agreeing to,” Nelson said.

That got editorial board member Eric Altman, head of Orange County Communities Organized for Responsible Development (OCCORD) and an opponent of the deal, talking about his central point: Communities that grant subsidies to economic interests should get something in return.

And they should be part of the debate so everybody understands the trade-offs.

Yet that drew a strong response from editorial board member Matt Cunningham, who argued, “it doesn’t make sense to add a bunch of things that drive up costs for the project.”

Cunningham argued that the entire debate has been misunderstood in the press and activist communities as it always is when economic subsidies are being discussed.

“It’s nuanced and more complicated,” he argued.

Ament argued that the chamber of commerce had been working with city officials for years to find investors for the hotel project, engaging in a global search. While it was tough to find any private-sector investors to step up to the project, the public subsidy is what made the deal work.

Ament noted that city coffers have been suffering because many of the upper-end visitors to the city’s convention center have been going to other cities.

He also questioned that the deal had not been discussed enough publicly, saying that the chamber of commerce had been involved in discussions both with city officials and council members. Ament noted that council members, while respecting the state’s open meetings laws, had also been talking privately about the project.

“We’ve been at the table,” Ament said, questioning why activist groups like OCCORD were not until the deal was approved.

That drew a sharp rebuke from Altman, who told Ament that OCCORD had spoken out against the project as far back as three years ago when a version of the deal was proposed. This year, he said, “we didn’t know there was a decision until the decision happened.”

Supervisor Nelson also chimed in as well, noting that Mayor Tom Tait had told him that he didn’t know about the vote either.

“It does appear there was a brilliant effort to get it through,” Nelson said.

Cunningham said he felt that much of the labor opposition to the project is coming from the Orange County Employees Association, because the labor group is running one of its board members, Anaheim resident John Leos, for City Council later this year.

“This is being used to beat up the council,” Cunningham said.

OCEA Communications Director Jennifer Muir, who is also an editorial board member, said Cunninham was off base, arguing that the union is not the only source of opposition to the project.

Muir pointed to the city staff report as evidence that others have legitimate issues with the large subsidy.

Muir also said there’s a big curiosity about the project and who is making the profits.

“Everybody wants to know who is making money off this deal,” she said.

Muir also said her group’s opposition comes from the economic conditions in Anaheim, with city leaders constantly telling workers there’s less and less money for wages or services.

“We’ve been told again and again there’s no money,” Muir said.

Yet the real question facing city leaders is explaining how the numbers flesh out.

For example, Altman in many public forums has argued that the LA Live project offered the public sector many more advantages in terms of wages for workers on the project.

Yet Ament noted that the LA Live project, because of the add-ons like wage and hiring commitments, includes a tax subsidy that runs for 25 years instead of the 15-year commitment on the Anaheim deal.

Nelson told Ament that he made lots of great arguments for the subsidy, arguments that should have been made publicly before the deal was approved, he said.

Yet Nelson told Ament that he’s perplexed by these kinds of arguments for subsidies and what they do for the community.

Because when Nelson drives around many Anaheim neighborhoods, he said, he doesn’t see where all the economic benefits of stadiums and hotel deals are. The neighborhoods, parks and roads look just like a neighboring city’s with a much smaller revenue base like La Habra, Nelson said.

Muir seconded Nelson, noting, “You want to grow the pie, but who gets a piece?”

Everyone in attendance at the editorial board meeting agreed that the meeting was one of the first gatherings in public where the actual deal points — covered in a three-page staff memo — were debated with both sides acknowledging they learned things from their opponents.

All attendees agreed that this kind of process, while not perfect for gaining consensus, is good for identifying where parties agree and how differences can be fleshed out.

Ament noted that given the protests and questions about community impacts, the chamber is already meeting with the hotel developer to talk about implementing some sort of buy-local program for vendors.

 

 

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