Tag Archives: charles theofan

Guess who’s now working for Nassau County as Mangano’s Deputy County Executive?

FROM NEWSDAY: “Despite an ongoing hiring freeze, Nassau County Executive Edward Mangano has hired the former Long Beach city manager, who served under the former Republican-controlled city council and was in charge when the city’s credit rating sank to a notch above junk.

….. Theofan, who could not be reached, was hired as Long Beach city manager in 2004. In December,Moody’s Investors Service downgraded the city’s credit rating from A1 to Baa3 with a negative outlook. Theofan blamed the cash crunch on cleanup costs from Tropical Storm Irene and delayed tax payments from a large property owner.”

Read the full article over @ Newsday: Mangano hires ex-Long Beach city manager

Scrooge Comes to Long Beach (and we need a bailout)

The Long Beach Herald has a whopper of a story before the holiday season.  It seems Scrooge has come to Long Beach, and without emergency action, Long Beach can’t make payroll on December 23rd.  Meaning that, Long Beach’s workers won’t get paid two days before Christmas.

Of course, in the leaked menu obtained by the Herald, City Manager Theofan and the comptroller are frantically working to borrow money – over $1 to cover the shortfall.  An emergency City Council meeting will be held on November 30th to approve the Long Beach “bailout.”

It’s interesting that for month’s we’ve heard about the fiscal health of Long Beach, yet when push comes to shove, we can’t pay our bills and seemingly have known we wouldn’t be able to for as many months.

City Manger Theofan explained that it was all Irene’s fault because of the overtime the City racked up, and FEMA hasn’t paid up yet.  How is this a surprise and why weren’t residents aware of this earlier.

The other whopper to come out of this memo is that while resigning acting police commissioner Sofield Senior will not be getting a golden parachute.  But his accumulated sick and vacation time add up to 500k.  And he wants it within 60 days.  And here I am getting excited about my 10 vacation days a year that are use or lose…

The plan the City Manager has floated is to borrow $1.5 million to cover the payroll shortfall of $1.4 million (are we already assuming the estimated shortfall is larger than $1.3 million?).  If my math is right, the City only has $100,000 to pay the $1.3 million bill.  Much later after all the obfuscation about Irene, the crux of the matter comes up, and that’s these unbudgeted payouts.  The memo says these payments total to a monstrous $1.4 million for the three employees, making any Irene-incurred overtime seem like just a drop in the bucket.

 

Read the article for the rest of the info.  It’s great. 

On Thin Ice (Another Slippery Lawsuit for LB)

It seems when I came across a lawsuit related to the mis-development of the SUPERBLOCK, I was just seeing the tip of the litigation iceberg. I argued in that post that it seems Long Beach is drowning in litigation, little did I know just how true that was. Today, I’ll highlight yet another case featuring such hits as breach of contract, wrongful eviction, and defamation against the City.

For a little background (and something you can do at home), while looking for more lawsuits that were linked to the SUPERBLOCK, I started searching this website. This handy-dandy website lets you search for all sorts of litigation, and gives you easy to download copies of all applicable court documents, for free. When one of the results against LB came up with the plaintiff called “Arena of Long Beach,” I was interested. A few clicks and some reading and WOW, yet another nasty lawsuit that the City government is facing, that I haven’t heard a peep about – even though there was a filing in June and the next appearance is set for December.

In brief, this lawsuit pits the former renter of the Long Beach ice rink, Bernard Shereck, against the City Manger, Charles Theofan, and the City itself. In 2009 evictions went out, and now the former renter has taken the City to court, and has had decisions go in his favor in the case’s first two motions.

I’ll let Newsday summarize:

The lawsuit contends that the city’s eviction attempt breaks an existing lease. A 10-year lease set to expire last August included a tenant option to extend it for five years. Klein said Shereck was not entitled to an extension because he had not fulfilled the lease’s terms – namely, he had not paid the annual $175,000 rent stipulated in the original.

After Shereck paid his first installment in January 2007, then-City Manager Edwin Eaton and the City Council granted him a rent reprieve through July 2008 in light of the expenses incurred in fixing up the arena, the complaint states.

Then, last year, the city hired an auditor to review the tenant’s finances, including the rent obligation. In a March 2008 letter to the auditor, City Manager Charles Theofan said: “We believe the rent obligation imposed mighthave to be adjusted downward.

“We are very pleased with the programs that have been introduced at the arena, and with physical improvements that have been undertaken,” Theofan wrote. A lawyer for Shereck, Richard Cahn, said Theofan agreed last November to extend the lease for five years at an annual rent of $60,000, which Shereck has been paying. “The city has no right to evict Bernie,” Cahn said. “He’s got a lease.”

So did you get all that? Basically summarizing the court docs and Newsday, Mr. Shereck came in and took over the decaying ice rink. Because he was going to put up a bucket of his own money to improve it ($250,000), the City Manger at the time Edwin Eaton (gasp a Democrat!) waived his rent for the facility in light of the capitol he put up for the renovations.

Then when Mr. Theofan came back in 2008, and after an auditor looked over the ice rink, Mr. Theofan basically says, alright everything looks good, and here’s your five year lease extension. So, Mr. Shereck continues for about another year paying his new rent amount ($60,000 per year) and continuing to run the rink. Then on 3/31/2009, the rink gets an eviction notice, with one of the main issues being that Mr. Shereck wasn’t paying his rent. If that sounds confusing, it is.

In the amended complaint, Mr. Shereck tagged on a claim of defamation because in the media coverage that came out, Mr. Theofan is quoted as saying Mr. Shereck was being evicted because he “did not pay his rent for a year and a half amounting to about $200,000 in lost revenue for the City.” Even though Mr. Shereck seems to be able to prove he wasn’t a deadbeat and was indeed paying his rent and all was well. There were technically two evictions, the first one received all the news attention – in which Mr. Theofan was quoted saying that the issue was he didn’t pay his rent. Then days later after they dropped the first eviction they submitted a second eviction notice, but it is unclear what the reason underlining the second eviction was and how it differs from the first (still for non-payment of rent or was it something else?)

And the next twist – selective amnesia. As these court proceedings take forever, it wasn’t until January of 2011 when Mr. Theofan and the City’s Corporate Counsel Corey Klein were deposed. During that, both City officials “could not recall discussing the moratorium” with the reporters of Newsday and the Herald, even though they are quoted in both of those papers.

The City’s Parks Commissioner who took over the rink and runs the separate and private hockey league to this day, Joseph Brand, was also scheduled to be deposed, but the City attempted to block it. The City claimed, “city representatives already had sufficient knowledge of the Arena’s eviction” so he shouldn’t have to talk to the courts. What they’re saying is the guy that has been running the rink in the meantime and the head of the recreations department at the time of the eviction shouldn’t have to talk about what he knows because, hey trust us, other people already told you what he knows. Yea, that doesn’t make too much sense to me either.

In the latest motion I could find, dated June 7, 2011, the Honorable Stepehen Bucaria called shenanigans on that, and said the plaintiff (Mr. Shereck) had every right to request Mr. Brand to be deposed (with a few caveats protecting “official” communications). Currently, the next court appearance is scheduled for 12/15/2011.

So what does all this mean? With the ice rink that was neglected since built in 1974, a former hockey player came in, invested a massive amount of money, and reportedly began to turn a profit. At some point it appears the City Manger, Charles Theofan decided Mr. Shereck had violated something, and required his eviction.

What’s extra interesting is that in March of 2011, the City approved (3-2) a new lease agreement for Building Fitness Performance, a father/son Lido Beach based-company. Based on the play by play in this article, the City Council meeting turned into a brawl between at least two members of the City Council (the article cites Mr. Sofield and Mr. Fagen).

In 2009 when the eviction was going through, Corporate Counsel Klein said that one of the reasons was because, “The city itself can provide better services.” That’s a reasonable position for the City to take, but why was that only true in 2009, but now in 2011, the City thinks they should again lease out the rink? I thought the City can “provide better services”? Anyway isn’t the “free market” supposed to decide the success and failure of business and not government?

The new company, Building Fitness Performance was to be offered a lease of $22,000 per year! The previous contract, that was originally approved for a five-year extension by Mr. Theofan was worth a minimum of $60,000 per year for rent alone. In 2006 when Mr. Shereck first got the lease he was to pay $175,000 per year in rent (which was waived after he made all the improvements). Why after two years did the rent drop by two thirds? Why after six years was the rent dropped by 87%! I have no idea and none of those numbers seem pegged to reality for rent of one of the only ice rinks on the south shore of Long Island. Note: I cannot confirm if Building Fitness Performance ever actually took over the rink

I don’t particularly care about the ice rink. But, from reading through this stuff I know there are an awful lot of kids and parents that do care about the ice rink. How many of them know all of this is going on? Why during news coverage of the March 2011 decision to start a new lease with a different company is there no mention of pending litigation that could void the new lease? How much money is at stake in a lawsuit like this? How many other lawsuits are floating out there? The same way I want the beaches open so surfers can thrive, I want the ice rink to be run well without a cloud of litigation over it so little dudes can become pro hockey players.

So with a little Google-fu and checking court records and newspaper clippings, yet another case slides in front of me. What is it about Long Beach? It seems no matter where you look or who you talk to, there’s another lawsuit around the corner.

You can read the latest motion filed in June here. It actually gives a fairly good plain English account of the story.

And here’s the original complaint filed in April 2010.

Theofan: “Gusler’s suggestion is mean spirited, misguided and downright ridiculous”

City Manager Charles Theofan has sent me his response to the allegations made by resident Jay Gusler.  Below is Mr. Theofan’s letter in full:

Re: Gusler Letter To City Council

I am once again compelled to write to set the record straight, this time with regard to Mr. Gusler’s letter to the City Council calling for my termination. Let’s start with his motives. Mr. Gusler is a lieutenant in our paid fire department. At present he is the subject of six (6) pending disciplinary proceedings. His request to the Council is in retaliation for my role in bringing and prosecuting the disciplinary proceedings against him. He is also positioning himself to claim that he is being retaliated against in the event that he is fined, demoted or terminated. He also has a federal civil rights law suit, where acting as his own attorney; in it he sued the City of Long Beach, The Long Beach Volunteer Fire Department, the Long Beach Police Department, and the following individuals, in their official and individual capacities: Charles Theofan, Garret Rooney, Lisa Mulligan, Corey Klein, Robert Agostisi, Marco Passaro, John Gargan, Scott Kemins, Stephen Fraser, John McLaughlin, Michael Gelberg and Timothy Radin. By naming members of the Corporation Counsel’s office we were forced to hire outside counsel paid for with public funds. I am absolutely confident that the complaint will eventually be dismissed. The ever litigious Mr. Gusler has also within the past year sued the Nassau County Civil Service Commission. That litigation was dismissed this past September.

Getting to the heart of Mr. Gusler’s allegations, he seeks to equate my interpretation of a civil statute with an individual who rented out two uninhabitable basements, each for a $1,000 a month in direct violation of our Zoning Ordinance, which served as the basis for removing a former member of our Civil Service Commission. Let’s look at what I was found guilty of. On July 18, 2007 two members of our paid fire department, while on duty, anonymously perpetrated an unspeakable act of cruelty and harassment against a fellow firefighter and his fiancé. In the interest of their privacy I will not go into details, but it was a indefensible, despicable act. After many months of the perpetrators refusing to come forward, and no effort being made apologize for the incident, the victims hired an attorney, who drafted a Notice of Claim naming the City, and the firefighters union as defendants. At my urging, the attorney held off commencing litigation in the hope of reaching a settlement. I then wrote to all the firefighters expressing my disappointment with their union for not assisting in resolving the matter and I urged the membership to accept a monetary settlement to be paid by the perpetrators in lieu of any other disciplinary action. Luckily, they took my advice and were spared from litigation that would have pitted firefighter against firefighter. It would have been a very ugly situation that would have cost them more to defend than what it was settled for.

My indiscretion, if any, was attempting to save the paid firefighters from themselves by writing to them. Yes, that’s all, and for that, a man with six disciplinary proceeding pending against him asserts that I should summarily be dismissed by the City Council. Mr. Gusler’s suggestion is mean spirited, misguided and downright ridiculous, maybe he never heard the proverb about people living in glass houses not throwing stones.

Charles Theofan

LB Resident Calls for City Manager’s Removal

Drama came during this Tuesday evening’s Election 2011 debate, not from the candidates’ responses, but when Long Beach resident Jay Gusler hand-delivered this letter to City Council President Thomas Sofield Junior, and Council Members Goodman and Torres.

In his letter (given to this blog, Newsday, the Long Beach Herald, and Long Beach Patch), Mr. Gusler makes a demand of the City Council for the suspension and subsequent removal of City Manger Charles Theofan, by arguing Mr. Theofan has violated his oath of office.

What’s at issue here is something SBC began discussing on Monday; Mr. Theofan’s violation of a provision of the Taylor Law.  Mr. Gusler explains that violation in his letter, and also documents that Mr. Theofan has been found guilty of violating a provision of the  NYS Civil Service Law in addition.  That decision was posted here.

Mr. Gusler goes on to say that,“Mr. Theofan’s guilt in connection with these violations is not in dispute. Though it was their right to do so, the City has not appealed either ruling, thus conferring upon these decisions “final” status.”

Then, Mr. Gusler reminds the City Council of the oath of office and quotes a specific section related to general powers and duties of city officers. (Note: The City Code is available here)

It shall be his duty to see that the laws of his state and the local laws, ordinances and by-laws passed by the council are faithfully executed within the city. 

Throughout this letter, Mr. Gusler makes the comparison between Mr. Theofan’s situation and that of former Civil Service Commissioner Leary Wade.  Wade’s case is a complicated one, and I’ll leave it to the Long Beach Herald to get you up to speed here and here.  From my reading of Mr. Wade’s situation, he was removed from office because of an oath of office violation related to pleading guilty to illegally renting two basement apartments.  The amended allegations are available here.

Mr. Gusler’s argues, “the violations that Mr. Theofan has been found guilty of are of a far more substantial character than those relied upon to justify the Civil Service Commissioner’s removal.”

His argument continues that because of Mr. Theofan’s “guilt,” the City Council is “compelled to agree that these violations of the law require Mr. Theofan’s removal from office.”

Finally, he concludes by again quoting the City Code, and asking “that the Council place on the agenda for the November 1, 2011, City Council meeting a resolution immediately suspending Mr. Theofan from the performance of the duties of the position of City Manager pending the required steps to effectuate his permanent removal from office.”

The City Manager is an appointed position that serves at the pleasure of the City Council, with a majority vote being required (3 out 5) for his appointment or removal.  It will be interesting to see what steps the City Council’s members take – if any –  on this matter.  Residents are of course free to make any sort of demand they want as is was well documented during the last City Council Meeting’s Good and Welfare Session.  The question is really what the members of the City Council make of Mr. Gusler’s telling of the tale.  If there are any developments related to this in the coming days we will be sure to update.

Mr. Gusler’s full 3-page letter is available here.

Jay Gusler is a Lieutenant in Long Beach’s Professional Fire Department and a member of the Long Beach Professional Fire Fighters Local 287.  He is writing in his capacity as a private citizen and is in no way speaking for the Long Beach Fire Department or the union of which he is a part of.

LB Pro Fire Fighters: “Theofan Violates Taylor Law”

Taken verbatim from the Long Beach Professional Fire Fighters website and their Facebook page in a post titled “City Manager Charles Theofan violates Taylor Law. Found guilty of anti-union animus.”  I’ve not seen information about this posted anywhere else.

City of Long Beach Violates New York State Public Employer’s Fair Employment Act (Taylor Law)

Over the course of this administration’s time in charge of the City, it has repeatedly battled this Union, it’s leadership, and it’s members. The Union has had multiple Court actions, multiple internal administrative hearings, and multiple “Improper Practice” charges it has been forced to fight against the City. 

An Improper Practice charge, or IP for short, is an allegation, made by the Union, to the NYS Public Employee Relations Board, or PERB for short, that the City has violated certain aspects of Civil Service Law. 

While the Union has settled it’s past IP’s with the City prior to their being decided by a PERB Judge, our most recent charge was unable to be settled, and consequently went to a full evidentiary hearing for its resolution. The result of that hearing was a determination that the City, and particularly City Manager Charles Theofan, were guilty of violating Civil Service Law in that they interfered with the internal operations of the Union, and otherwise engaged in a course of action designed to undermine its leadership in the performance of its duties to the members.

———————————————————

They’ve posted the September 22nd decision here.

The Taylor Law is all about what unions can and cannot do and what the government can and cannot do.  You’ll often hear it mentioned when workers threaten strikes – like the 2005 transit strike, but generally it covers the basic relationship that unions and the government have and provide a way to mediate disagreements.

Page 8 of the above decision includes the “memo” issued by Mr. Theofan to “all members of the uniformed force” – which is at the heart of the matter.  Page 10 of the decision above spells out exactly what the City now had to do because of the violation.  Page 20 includes the actual notice that was required to be posted across the Fire Department.

I’d love if some of the legal experts out there could put this in context: are these sorts of violations common between the cities and their workers?  I’ve done a fairly extensive news search, but really only see the Taylor Law being mentioned in bits on Teachers’ contract negotiations, and nothing about violations.

To clarify one point: The Taylor Law is an informal name for the Public Employer’s Fair Employment Act (a state law).  This should not be confused with the Fair Labor Standards Act which is a comprehensive set of federal laws.

Long Beach Bills Quiksilver (And more from the document dump)

CJ Hobgood Being Escorted by the LBPD

After finally getting a response from City Hall and receiving 26 pages of documents related to the Quiksilver Pro, I talked about how much the City netted here.  (Hint: Less than they originally told you)

When City Manger Theofan said that the City made “hundreds of thousands of dollars,” what he was really referring to was the fees the City charged Quiksilver for police, fire, sanitation, beach maintenance, lifeguards, and street maintenance.  The total for these fees were pegged at $124,924.  This was a projected estimate the City made for Quiksilver and required that they prepaid.  Quiksilver delivered the check to the City on September 2nd.  Again, this check for $124,924 is not profit for the City, but simply an offset for services rendered.

The breakdown on the fees the City charged are interesting in that they conclude maintaining a few block area in Long Beach during a large event for 9 days (two weekends and five weekdays) costs $125,000.  The vast majority of these fees – 63% – went directly to fund the LBPD’s manpower.

The next two pages spell out exactly which cops would be on when, and exactly how much the City billed for each officer.

The base overtime rates were as follows: Lt – 114/hr, D/Sgt -$109/hr, Sgt – $99/hr, Det $96/hr, PO $81/hr.

It’s certainly interesting that all police required for the event were by default, considered overtime.  Further to spell out what the above rates means, they should refer to the cost of having that cop on site per hour.  That would include his pay (with benefits), and everything else that goes into what it takes to supply an officer.  It shouldn’t strictly translate into how much each officer brings home at the end of the day, but does explain how expensive it is to keep a police force running.

What also is odd is how the money went around per day.  On Labor Day, Monday September 5th, the City charged $13,378 for 142 hours, but then the next Sunday they charged only $5,040 for 60 hours to control the same stretch of beach.  Obviously one was a holiday the other wasn’t – but they could  both be called “weekends.”  What the City was billing for was strictly additional manpower to support the event.  Remember these were projected costs before the event, and did not take into account what days the competition would be occurring.  The billed overtime hours are shocking in how variable they were planned to be, with only the weekdays consistent around $6,5000 per day for 78 hours..

We also received some 8 pages of insurance info that is pretty standard and boring.  All that’s really here is the City required Quiksilver to have a big insurance policy, and Quiksilver followed up and did that.

These documents leave a lot of questions unanswered.  Specifically, a $100,000 bond was required to be put up by Quiksilver to cover any additional fees incurred by the City.  There is no documentation whether the projected 125,000k was too much, too little, or just right.  With this many “estimates” and “guesses” I find it extremely unlikely that the City got it just right (which would be an incredible achievement by anyone), and I’m curious if the City had to give money back or was required to bill for additional fees.

There is also the mystery of the third check.  This check for $3,984 was dated August 26th – two days before Irene hit – and includes no explanation as to what it is for.

Update: The Herald has confirmed this check is for a generator permit

Residents requested all documents related to the Quiksilver Pro.  These 26 pages are all we got.  From them we can conclude only two things.  The City netted about $27k from the event, and charged Quiksilver 125K to support the event through City services.

Below I’ve posted the remainder of the 26 pages we received from City Hall, the rest of the docs are here

Cost for Police Services

Cost for Police Services Part II

Big Check

Small Check

Insurance 1

Insurance 2

Insurance 3

Insurance 4

Insurance 5

Insurance 6

Insurance 7

Insurance 8

Insurance 9

 

SUPERBLOCK Mismanagement Could Cost You and LB $26m

(The SUPERBLOCK as it stood in July)

UPDATE 10/20:  Read City Manager Theofan’s response to this post here

I talked a few days ago about the precarious financial situation the City is in – that our possible few million dollar surplus could actually not exist, or that it could easily disappear if unforeseen expenses popped up?  Well, doomsday for Long Beach, and you the tax payer,  may be approaching, and it all has to do with the SUPERBLOCK.

The SUPERBLOCK, once upon a time, was the Long Beach Hotel – the birthplace of all of Long Beach and the City by the Sea.  That burned down, and yada yada yada, the lot remained abandoned and unused after a number of other projects came, burned down, and left.  We talked about the WWII defenses that were built there here, and documented some of the other building that burned to a crisp.

Well, in the ’90s, the then near-autocratic City Council started getting serious with finally developing what had long been an unbuilt lot.  If you think LB politics are bad now – you just wouldn’t believe the way the administration back then was talked about.

The story of the SUPERBLOCK is comically complicated so I’ll borrow from Marc Ferris at the Real Deal

Through the 1990s, the empty Superblock symbolized the inability of a public and private partnership to turn a parcel of land fronting a pristine beach into a profitable property.

In the late ’90s, when the long-time Democratic regime was being challenged by new “Republicans,” there were all sorts of gripes.

But despite some obvious improvements in government-no-tax-increase budget, closing the incinerator plant, increased parking and the county’s first skateboard park-critics find much to harp on. This includes hefty increases in garbage and water fees, … support of a controversial expansion of a two-screen movie theater to seven screens with no added parking (I’ve got to laugh at this one as this clearly was a non-issue over the last 10 years), and failure to do anything with the city’s proposed waterfront “superblock” of hotels, restaurants and theaters.

And now, back to the Real Deal’s summary

In 2001, the New York Times reported that the city had selected the Parkoff Organization of Great Neck as the preferred developer. The company proposed a 218-room hotel, spa, restaurant, retail and conference center, but failed to raise the $50 million it needed in the year-long time allotted and forfeited its $150,000 deposit.

In order to facilitate development, the city initiated eminent domain on all 13 lots that comprised the property the next year.

In 2001, the city chose Shore Development, a subsidiary of Philips International Realty, to build on the parcel.

Per its agreement with the city, Shore will pay $26 million to the former owners. Negotiations, including payment for capital improvements and the existing right of way on Shore Road, are done, Eaton said.

That original eminent domain move condemned about half the property that made up the SUPERBLOCK, which was owned by Sinclair Haberman – who promptly sued the City.  His suit – as is standard in condemnation cases – goes “you didn’t give me enough money for my land that you took.”  City: “No, we gave you the right amount based on our appraisals.”  Him: “No, my appraisals are higher.”

In 2005 the City sealed the deal with Philip Pilevsky of Philips International.

This quote struck me as particularly ironic.  The newish City Manger at the time, Charles Theofan, said referring to the SUPERBLOCK development: “‘Not to sound any bravado here, but nothing can stop us now.”

Then in 2007, as development looked like a sure thing (and we hadn’t even thought about the folly of mortgage-backed securities, Fannie and Freddie weren’t household names, and TARP was something that you used when it rained) the City used eminent domain again.

According to Newsday: “The City of Long Beach used eminent domain to condemn six acres of vacant privately-owned land in 2007. The City paid $39 million for the land using the developer’s money. Within weeks of taking title, Long Beach transferred ownership to the developer. ”

Then, Shore Development filed for bankruptcy and effectively vanished, walking away from the whole project, and may have set off a chain of events that will get you in your wallet.

That $26 million that was discussed in 2001, is now the liability The City faces a $26 million liability in two civil suits against the City which is confirmed by a third suit filed in February against the developers, just recently disclosed by Long Beach’s corporate counsel.

UPDATE 10/20: City Manager Theofan corrected me here.  I mistakenly thought the 2001 $26 million figure was the same as the $26 million discussed in these suits.  The two numbers are not connected, and the fact that they are both $26 million is only coincidental.

Basically, the way I read the lawsuit as filed by the City, there are three main things the City is arguing.  First, the defendant (who actually includes a number of different entities, but basically all track back to  Philips International and owner Philip Pilevsk) and through its subsidiaries did not develop the SUPERBLOCK as promised.  Second, Philips – and through their subsidiaries – did not fork over some of the money they were supposed to to cover the condemnation settlements.  And finally, because Philips created a whole bunch of shell corporations, effectively moving any real legal liability farther and farther from anyone that actually has any assets, they’ve left the City and the tax payer (that’s you) completely exposed.

I think this quote from the 2005 Times article might really sum up the irony better than Alanis Morrissette ever could by another new member of the City Council:

”The Long Beach taxpayer would have been on the hook,” said Mona Goodman, a Republican City Council member elected two years ago on a platform of limiting development. ”Now we are finally going to be able to realize this project, but in a very scaled-down way that is beneficial to the public.”

Section 120 of the recently disclosed February 2011 suit confirms the risk the City faces:

“As a result of the failure of any of the defendants to defend, settle, or prosecute any of the claims in two outstanding valuation proceedings still pending against the Plaintiff [that’s Long Beach], the Plaintiff City is currently exposed to significant liability in the amount of $26 million dollars.

Now this lawsuit was filed in February, and confirms that there are at least two pending cases against the City that I can’t find disclosed anywhere else (whether by the City or in the local media).

Further, section 60 highlights the fact that there has been some sort of litigation going on for nearly 10 years with the Haberman family related to the condemnation costs.

And the Times comes through again with more prophetic words:

Sinclair Haberman, the owner of about half of the property since 1993, sued the city in 2003 in an unsuccessful attempt to block condemnation. Mr. Haberman had contended that condemnation was unwarranted because he was prepared to develop the property.

Jacob Haberman, Sinclair Haberman’s father and a lawyer in the case, said a separate case remained in the state courts. In it, his son is seeking damages from the city for taking his property for a 10-year period, during which, he contends, the city improperly thwarted his efforts to develop.

Jacob Haberman said the family supported the revised project as long as the developer picked up all costs, including those that could result from the pending case.

Again, in 2005, the City knew the possible liabilities they were facing.  In the Times they said:

“City officials said under an amended contract of sale the developer would pay the full value of the property set by the courts in a condemnation proceeding. They said that amount might be in excess of $20 million

What does that mean?  The City Manager Charles Theofan,  in 2005, had already realized that if the deal went bust, any additional costs incurred by the lawsuits that were already filed would be at the taxpayers’ expense.

And in yet another quote that I’m sure the current City Manger would love to  have told himself not to say, he confirmed to the Times that: the developer was ”not assuming liability for that case.” He said the city would be liable for any award if the Habermans won. 

And now let’s get to the nitty gritty, what does this mean?  The City is on the hook for $26 million if they can’t get it out of the developer that has since flown the coop.  What is $26 million?  Well in a budget of around $85 million, $26 million works out to be about a 1/3 of the total revenue the City makes in an entire year.

The City surplus was around $5 million in 2007, down to $3.7 million last year, and another million dollars was just hacked off it to cover revenue shortfalls.  One is lead to believe then based on that downward revenue trajectory, the surplus could be gone when audits come back this year.

If these lawsuits are not settled on the side of the City, that 25% tax hike that’s always being babbled about will look like the good old days.

This February lawsuit is looking a bit like a knee-jerk response to the series of lawsuits that are ongoing against the City in light of the realization that there will be no progress on the SUPERBLOCK and the civil suits are winding down.  The City is suing Philip Pilevsky and his shell-corp of Shore Development (which was created in standard fashion to insulate Philips international (the big fish) from any legal liability if things went sour) in an effort to raise funds to differ the mounting condemnation costs.  Shore Development, of course, went bust and has no funds.

I’m an unabashed proponent of development.  And I know a lot of people that read this blog agree with me – obviously within reason and based on transparency.  I want the SUPERBLOCK built on.  I want new shops and new restaurants, and another hotel to keep the Allegria honest.

When some members of the City Council involved in these deals were elected, they had a platform against “overdevelopment.”  Instead of protecting the City from “overdevelopment” (whatever that is), they seemingly entered a boneheaded deal, and got conned by real estate tricksters, all the while, the City and the taxpayers were left “on the hook.”

Worst case scenario?  The City has to pay, for years likely, $26 million to a guy they may or may not have screwed out of his property and cash.  More realistic?  This drags on for years more, with continued mounting legal costs for the City, eventually ending in out of court settlement that costs the City, while totally blocking any SUPERBLOCK development for years more.

Again, the issue boils down to a total lack of transparency – did anyone have any idea these sorts of suits were pending against the City, am I just that out of the loop?  Further, another issue could be politicians running under one platform (avoiding overdevelopment) and then making seemingly nonsensical development decisions when they are the ones in charge.  If I get any updates as to the status of this case, or any of the other cases that are confirmed in the lawsuit, I will be sure to post them.

Are you having trouble sleeping?  You can read the entire February lawsuit here.

Quiksilver Pro Netted Long Beach $26,785

More than a month after the Quiksilver Pro New York made history in Long Beach, the City, after numerous delays,  has responded to a series of Freedom of Information requests from a number of different residents about what went on in City Hall during the planning of the Quiksilver Pro.

In this release of around 25 pages there are included:  preliminary agreements, permit documents, a site plan, a long explanation of fees, insurance documents, and three checks. Note: Not all documents are yet scanned

The bottom line, and thing most people want to know is this: how much did the Quiksilver Pro make Long Beach?  The short answer is $26,785.

The document pack we received includes a single “Use of City Property Permit/Licence,” for the use of Pacific, Lincoln, National, and Laurelton beaches.  The math behind it is spelled out in the documentation, and Quiksilver then sent over a check for the above figure.

The site permit was issued on January 14, 2011 with Quiksilver dating their check on April 5, 2011 – a full five months before the event itself.

An exact breakdown of the beach fees related to the permit are available here.

Further inspection of the documents includes mentions of “film permits,” “noise permits” but then does not provide any follow-up as to whether those permits were issued.

Point 2 here says quite clearly: “specific and separate permit(s) will be issued upon receipt of a site plan…”  Again, no additional permits are included within this document pack that requested any and all documents related to the event.

Issued on August 28th – days before the planned start of the competition – the City issued an “Addendum to the Site Permit Application”.

This document again mentions a “film permit,” and introduces  a “special event permit,” and a  building permit.

Those permits are not included anywhere in the document pack, so one would be led to believe they were not issued, as they should be public documents.

The Freedom of Information request for public documents requested “copies of all contracts, permits, licenses” among many other things.  Considering the site permit application is the only permit we were given, therefore leads me to believe this is the only permit the City issued, and the only revenue generating component of  the Quiksilver Pro.

I mentioned above that there were two other checks included.  They relate to payments made to the City for services rendered, i.e.: paying for the cops, emts, sanitation, and other city services that were required to support the event.  That money is not profit for the City.

The total fee the City billed Quiksilver for was $124,924.  Further, the City required Quiksilver put up an additional $100,000 in case their projected cost estimates were wrong.

On the City’s website, they wrote,  “Our City received hundreds of thousands of dollars in fees for the event. This includes compensation for all municipal services provided to help make it a success, such as police, fire, sanitation, beach maintenance and other City personnel”

From the information provided in the document pack, the City did receive “hundreds of thousands of dollars.”  But, most of that money was used to offset costs related to the event, like having extra police and fire resources on.  The way the sentence is phrased, most would jump and say it means “oh, I guess the City netted hundreds of thousands.”

The Long Beach Herald reported that there may have been a $50,000 “citywide media fee” which was possibly scrapped after the event was so dramatically scaled back.  Because that fee or permit is not disclosed in the document pack, I assume it was dropped.

There is also the issue of “sales tax revenue” that City Manager Theofan discussed.  One resident in the last City Council meeting debunked that theory thoroughly.  To summarize, she crunched the numbers and speculated that sales tax through the Quiksilver tent would amount to around $1000 if the store sold $1,000,000 worth of goods.  Not exactly enough to be called a real cash cow for the residents.

I’m going to assume the City did accurately respond to the Freedom of Information requests and did disclose all documents that were available.  That would lead me to conclude the City’s only revenue generator from this competition was the sole permit issued in January, and paid for in April for a total of $26,785.

What frustrates me so much about this whole process is again, the total lack of transparency.  The City knew as early as January 14th – when the permit was issued – what the above permit costs were.  Why not discuss this?  Further, the January 14th permit spelled out a lot of things residents wanted to know – why not discuss them too in the long series of City Council meetings that were held?  The August 28th permit further highlighted so many of the details the residents wanted to know.  Why weren’t these documents made public as early as possible?  And of course, there’s further the issue why a Councilman was required to, and ignored, when he  submitted a Freedom of Information request in August.

I want to make clear that I’m an ardent supporter of the Quiksilver Pro and everything it did for this City.  You can read about it in my series called Quiksilver is Good For You.  What I want is a straightforward and transparent planning process that the community is actually involved in.  This batch of documents the City has provided is a step in the right direction.

The first block of documents that I’ve processed are linked at the bottom of this post.

Acceptance Letter

Site Permit Application

Site Permit Application

Check 1

Site Permit

Addendum 1

Addendum 2

Addendum 3

Total Fees

Site Map

Adelson: “Tommy, that was a cheap shot…” (Fireworks at City Council Meeting)

During October 4th’s City Council Meeting Good and Welfare session things got nasty as City Council President Thomas Sofield Junior verbally berated a resident for sitting near his political opponents.  And that’s just the start of the fireworks that came out of the street fight which was the October 4th City Council meeting.

Ah, transparency.  One intrepid resident has posted the audio from the meeting for all to hear.  Of course, most towns would publicly publish this themselves, or air them on Cablevision, but not in Long Beach, where public info somehow is never released.

This resident captured some truly incredible exchanges.  I’ve heard tales of the bickering and fighting that occur during these sorts of meetings.  I’ve heard that Councilmembers often throw insults at one another.  But, I didn’t think I would  hear the City Council President ever attacking a good-intentioned resident for asking questions or sitting near people he disagrees with.

Well, in this City Council meeting, you get it all, and I warn you, watching (well, listening to) the sausage get made is not pretty.

Sure, more than 50% of the questions are about clogged drains, parking, surfing regulations, and various other gripes – the sort of topics you’d expect in a council meeting.  And then it really gets started off with what seemed to escalate almost to blows between Councilmen Torres and McLaughlin.  44 minutes into the session, a questioner asked about supposed “secret meetings” that took place, which was a notion quickly dismissed by the City Council President.

After the resident was repeatedly interrupted, Mr. Torres said, “let the man speak.”

After an inaudible comment, Torres snaps at Councilman McLaughlin and says,”don’t talk to me like.”

Councilman McLaughlin: “I’ll talk to you anyway I want”

Councilman Torres: “I don’t like that, he’s out of order”

And then an inaudible exchange between the council members.

And here was the first point where a theme develops, City Council President Sofield Junior tells the resident that he’s getting his information from “bad sources.”

The next firestorm started at an hour and ten minutes into the prize fight, with a resident saying to the City Manger, “You’ve told outright lies.”

She then goes on to list a number of points where City Manger Theofan has reportedly “lied” about being in talks with the head of Quiksilver.  She then cites news reports quoting the CEO and marketing director of Quiksilver who explicitly say they are not in talks.

The City Council President interrupts and says “who are you talking with at Quiksilver.”  He’s forced to retreat when she refers not to unnamed nefarious sources, but the newspaper.

Next, she attacked claims of profits from Quiksilver in what she called “this campaign literature” she received in the mail.  She’s talking about the Long Beach City Beat, a bulletin that we too have thought looked more like a  pseudo-campaign flyer and highlighted here.

In what might be one of my favorite resident quotes from the night, she proclaims, “I did the math.”  She crunched the sales tax numbers based off of information she received from Corporate Council Corey Klein.  She worked out that if the Quiksilver tent made $1,000,000 in sales, the City would see only $1,387.50 in tax revenue.

She sartastically finished, “I don’t think that’s going to help you keep the property taxes down”

As the City Manager and City Council President attempted to debunk her math, you can hear City Councilman McLaughlin say: “Tom, let’s go I want to get out of here”

And now, the main event

At around 1:24 into the session, a resident comes to the mic and mirrors a topic many others have brought up – Freedom of Information requests.  We’ve been told here that we have to use these as well a number of times by the City – for public information.

The resident repeatedly challenges the City Manager and City Council President, wanting to know where her info on the Quiksilver Pro is, and when she’d receive it, because it had already been a month since she was promised the info.

She then quotes from the Herald, where Councilman Torres talks about how he himself has had to file FOIL requests of the very city government that he’s been elected to help run!

At this point, Councilman Torres came to say of the questioner,  “You’re absolutely right” and that since August 16, Torres has been trying to get these documents.  After explaining the state of the situation, and City Manger Theofan’s undelivered on promises, he finished by saying, “I’m still waiting too”

This resident continued by asking, “if Mr. Torres can’t get them, how can I get them.”  Laughter and applause broke out through the room.

And then at 1:27 it gets personal and  nasty.

The resident continues by saying “I have faith in this system, maybe that’s naive, but I hear such trash about this administration.”  She goes on to mention the gossip and innuendo that is well documented in this town about the hate-fests that go on between the City Council members publicly.

At this point, the City Council President Thomas Sofield Junior starts talking under his breath and all that’s audible is: “pshh… never mind”

Resident: “No, please go ahead, what was that?”

Through a lot of cross talk, this is basically what comes through:

Mr. Sofield Junior: “You’re sitting with the group of people over there who are anti this administration”

Mr. Sofield Junior: “So i think that would maybe taint your information”

It turns into a bizarre discussion about who is sitting with who and whose crew is whose.

The resident declared: “I’m a big girl and I’m sitting here alone”

Sofield Junior: “My point is you’re getting your information from people who are running against us”

Resident: “You don’t have to tell me who I’m getting my information from”

Councilman Fagen stepped in to to say, “The fact of the matter is that Mr. Torres has not been provided with the information, nor was I.  I asked Mr. Theofan on three separate occasions for information about Quiksilver and he never responded to that.  That’s a simple question.”

I for one sure want to get a look at these promised Quiksilver documents.  If you’re one of the select few that were promised to receive these documents this week, please share.  They are public documents and should be posted online.

As Mr. Fagen and Mr. Theofan went back and forth, and in referring to what is clearly a pattern of needing to use legal demands to receive public information, Councilman Fagen said it was, “an intrinsic problem with that… this is public government.”

In a snarky snap, City Manager Theofan retorted: “Thank you for the lecture Mr Fagen”

After yet another back and forth on the Council with the City Manger, this resident decided to still maintain a civil discourse with the City Council President, imploring him to deliver on the promised transparency.  She finished by saying “I’m pleading with you…”

Fran Adelson, resident and currently running for City Council was the next questioner and you could hear the frustration and anger at what just transpired in her voice.

She admonished the City Counil President saying, “Tommy, that was a cheap shot that was really uncalled for.”

Mr. Sofield Junior initially claimed ignorance, not knowing what was the supposed “cheap shot” but then retorted “that wasn’t a cheap shot, that was pointing out a fact.”

Adelson went on to talk about the need for a recycling program in the City and the animal shelter, and the session soon wrapped. I”m surprised there wasn’t a fight in the parking lot once the session ended.

And this is how your elected City Council operates.  Members bickering with one another.  Obvious hatred between the sitting members.  Requests for public information repeatedly being ignored.  Residents and City Councilmen alike being required to use legal demands to get even basic information.  The City Council President repeatedly harping on this notion of secret “sources” and on these “sources” feeding tainted information to residents, and attacking a questioner for her choice of seating.

I thank Long Beach Matters to You for posting this audio, and think this may really help pull back the curtains on what’s going on in this City.  Anything jump out at you during this session that I didn’t mention?