Here’s the short version. In 2017 the South Park BID wanted to lobby Metro concerning some transportation issues. To do this they needed some reports prepared by professionals who were going to charge them around $80,000. For whatever reason they didn’t want to pay out of the BID budget, so they hit up local developers for $5,000 contributions. In exchange the BID supported the developers’ various projects before City Council committees and commissions using talking points prepped by the developers to inform their public comments.
First, let’s talk about the two issues the BID was, and is, lobbying for. One is to establish an enhanced infrastructure financing district (EIFD)1 to fund transit improvements in the BID, in particular moving Pico Station underground.2 The BID’s “one pager”3 on the benefits to be gained from the EIFD can be read by clicking here and their presentation on “undergrounding” Pico Station is available here. The other issue has to do with improving connections between various presently disconnected-by-public-transit points Downtown. The BID’s presentation on that can be read here.
And of course before one goes a-lobbying one needs reports! Written by experts! And experts don’t come cheap, but they will provide proposals with estimates of the costs, and here are the two the BID obtained:
- Kosmont Companies proposal on EIFD — Estimated budget is between $35,000 and $42,000. By the way, this is the same Larry Kosmont who just might be the only honest BID consultant working in Los Angeles.
- Nelson Nygaard proposal on transit feasibility — This firm, Nelson Nygaard, is one of those companies where, after you read what they do on their website, you understand it less than you did before reading. Make your own choices. Estimated budget is $36,200
And based on these estimates, the South Park BID determined that it needed $80,000 to begin the report-making process. And for whatever reason, they also determined that they were only going to pay $5,000 themselves. The rest, saith the BID, they were going to raise from developers and maybe some other BIDs Downtown. And the story of this whole mess, told, as usual, in excruciating detail via transcriptions of emails, can be found after the break!
As much of the story as I have so far begins with this October 9, 2017 email from BID executive director Ellen Riotto to Scott Rynders, vice president for West Coast development at Lightstone Group, which was then and is now in the process of developing the Fig + Pico project in the South Park BID.
Skipping ahead to the end of the story, by the way, the project was not only approved, but City Council granted it more than $100 million in various kinds of public subsidies. And not only that, but one of the lobbyists being investigated by the FBI in relation to that José Huizar thing, Art Gastelum, also worked on the Fig + Pico thing for Lightstone. Anyway, here’s what Riotto had to say to Rynders:
From: Ellen Riotto <email@example.com>
Date: Monday, October 9, 2017 at 1:55 PM
To: “Scott P. Rynders” <firstname.lastname@example.org>
Cc: Josh Kreger <email@example.com>, Robin Bieker <firstname.lastname@example.org>, Daniel Taban <email@example.com>
Subject: SPBID transit studies follow up
Thanks so much for attending the stakeholder meeting we held last week. It was great to finally get folks around the table and present these projects. As promised, here is a link to the materials we presented on Thursday, as well as the two presentations that dive into each of the individual projects in more detail.
As we discussed in the meeting, the more contributors we can sign on as funders of the studies, the stronger the coalition is. SPBID is prepared to contribute $5000, and we’re hoping individual developers (and hopefully neighboring BIDs) can match. Let us know how you’d like to proceed.
Thank you again, and please don’t hesitate to reach out with any questions.
Note that as of this writing that link to documents was live, but in case it goes away I scraped it and uploaded the contents to Archive.Org. And also note that Lightstone wasn’t the only developer that South Park was hitting up for these $5,000 donations. The next piece of the puzzle is this December 7, 2017 email from Josh Kreger to Mark Spector of Onni Group, another Downtown developer, whose Olympic and Hill project is also in the South Park BID:
From: Josh Kreger
Sent: Thursday, December 07, 2017 12:34 PM
To: ‘Mark Spector’ <firstname.lastname@example.org>
Cc: Ellen Riotto <email@example.com>
Subject: Transit Study Docs
It was great meeting with you yesterday! I have attached electronic copies of documents we shared yesterday along with copies of the actual study proposals form [sic] Kosmont and Nelson/Nygaard and a summary sheet. Let us know if you have any questions and we look forward to hearing back from you soon. Thanks so much!!
Director of Real Estate and Planning
And at first it seems that maybe these developers didn’t understand the proposition, which might have been something along the lines of “nice skyscraper project you have there, it’d be a shame if you couldn’t get community buy-in.” Thus did Josh Kreger continue to wheedle without getting a response:
- December 12, 2017 — Kreger to Rynders following up
- December 14, 2017 — Kreger to Spector following up
- December 28, 2017 — Kreger to Spector following up again
And in January Kreger’s persistence finally paid off, at least with Spector, who sent him this January 5, 2018 email announcing his intention to cough up the dough:
From: Mark Spector [mailto:firstname.lastname@example.org] Sent: Friday, January 05, 2018 10:24 AM
To: Josh Kreger <email@example.com>
Cc: Ellen Riotto <firstname.lastname@example.org>
Subject: RE: Transit Study Docs
Hi Josh- Happy new year.
Attached is our ground floor landscape plan for your reference.
We would be happy to support the transit study for $5k. Can you send me information on who to make the check out to?
Vice President of Development, California
And yay, right?! Kreger told Spector that Riotto would be in touch and she told Spector she’d invoice him. But meanwhile, Scott Rynders of Lighthouse Group was evidently not being so agreeable. Thus we have another series of friendly little follow-ups from Josh Kreger:
- January 8, 2018 — Kreger to Rynders following up again
- January 22, 2018 — And yet again
- January 26, 2018 — Rynders to Kreger. He finally cracked, or did he?
The record is incomplete at this point, but Rynders didn’t say no, instead he told Josh Kreger that he’d left him a voicemail. We’re probably never going to know what he said, but we might, you never know. It’s not hard to imagine that some kind of deal was sealed, tacitly or explicitly, because the next little bit I have4 comes from February 2018. It’s a series of emails between Ellen Riotto and Jim Pugh, a lobbyist with Sheppard Mullin, who’s repping Lightstone with respect to Fig + Pico, arranging for the BID to speak before the City Planning Commission in favor of the project.
First Jim Pugh sent this February 27, 2018 email to Ellen Riotto stating, with no preliminaries, no expectation that it’s less than a done deal, that Riotto might refuse, that he wants her to speak to the CPC in favor: “Ellen – we would like you to speak in support of the Lightstone project at this CPC hearing. Please confirm.” And less than 40 minutes later she replied, agreeing: “I’ll be there. Let me know if there are specific talking points you want me to hit. Thanks Jim.”
Note that she didn’t just agree to show up and support, she agreed to follow Lightstone’s talking points. That is, she agreed to give public comment in the guise of someone speaking independently of Lightstone even though the substance of her comments was to be written by Lightstone. And there’s certainly no way to have learned that this was happening at the time.
These emails are doubtless the only source for that information. There’s no space for this kind of affiliation, e.g., on the speaker cards since Riotto’s not being paid, at least not directly, by Lightstone, by Sheppard Mullin. She’s bought, that is, even if not paid for. Pugh replied immediately, stating that he would supply talking points for Riotto to parrot.
By March 2018, though, it seems that the BID was putting the two reports on hold, while reserving the right to go back and get the bucks from everyone who committed to contributing. Of course, this arrangement leaves the whole network of mutual obligations intact. This development is explained in the following emails:
- March 28, 2018 — Riotto to Rynders noting that they’re not doing the reports right now and can Lightstone write a letter in support of their current transpo project?
- March 30, 2018 — Rynders to Riotto. What? So now you don’t want the money, just a letter?
- March 30, 2018 — Riotto to Rynders. We might want the money later but right now we just want a letter, OK?
And by April Lightstone was back to soliciting support from the BID, this time in front of the Economic Development Committee. First comes this April 23, 2018 email from Rynders to Riotto and Kreger:
From: “Scott P. Rynders” <email@example.com>
Date: Monday, April 23, 2018 at 3:16 PM
To: Ellen Riotto <firstname.lastname@example.org>, Josh Kreger <email@example.com>
Subject: EDC Hearing Tomorrow – Fig + Pico Hotels
Hi Ellen and Josh,
Can one of you please give me a quick call this afternoon?
We wanted to see if you can send someone to speak in support of our project at the EDC committee hearing tomorrow afternoon. They are considering our hotel development incentive agreement and city parcel land sale to Lightstone.
A copy of the EDC agenda is attached. Thank you in advance.
Scott P. Rynders
Three minutes later Riotto replies that she would love to be there and please send talking points and one minute after that Rynders replies that yes of course he will! And three days later, after what one supposes was a really successful meeting for Lightstone, it’s big freaking group hug time in South Park!
And again in May, this time with the Planning and Land Use Management Committee. On May 8 Rynders emailed the BIDdies, again with a tone that suggested he would brook no refusals:
On May 8, 2018, at 10:52 AM, Scott P. Rynders <firstname.lastname@example.org> wrote:
I wanted to give you a heads up for our tentative Fig + Pico PLUM Committee hearing date which is shaping up for next Tuesday, 5/15/18.
The date will be confirmed later this week, once the agenda is issued.
In the meantime, we’d like for you to put a placeholder on your schedule for this date.
Thank you in advance. Let me know if you have any questions.
Scott P. Rynders
And of course the BIDdies are happy to do it. And of course there are talking points involved. And of course the BIDdies are happy to read the talking points.5 Oh! And have you been wondering what was up with the Onni Group, who actually does seem to have paid the $5,000? Or at least made a firm commitment to pay it? Well, as above, the record is not totally complete, at least the part I have obtained so far, but check out this October 15, 2018 email conversation between Riotto, Kreger, and Ben Spector and a couple other Onnites, making it quite clear that the BIDdies had been giving public comment in support of Olympic and Hill all along.
And that’s the story, or at least the part of the story I’ve uncovered so far. As with all of these things, it’s an episode out of the middle, no beginning here, and no end. Money changes hands, public comments are given, talking points are adhered to. Each event ostensibly independent of the others but, when listed chronologically in some detail, the illusion of independence is harder to maintain.
This kind of activity is not trackable under current Los Angeles laws regulating lobbying and mandating transparency since the money that’s exchanged is not given in exchange for the lobbying. But really, I would like to know, I would like to know that Councilmembers know, when a speaker is parroting someone’s talking points instead of representing their own point of view, the actual point of view of their organization.6
I would like to know when the beneficiaries of these performances have paid, or donated, or left out on the counter to be picked up without any explicit agreement, large sums of money to the commenters. Since there is some kind of money being exchanged, since there’s obviously some kind of understanding, it should be possible to capture this kind of thing in a statute and to at least require reporting. I have no idea what can be done about that, since there’s no political will, at least not right now, for ethics reform.
Oh, one last thing. There is probably a good reason why the BID needed to fund these studies by donations, having to do with legal restrictions on how they spend their money. One of these is found in the Property and Business Improvement District Act of 1994 at §36625(a)(6), which prohibits spending assessment money on projects outside the boundaries of the BID and also forbids spending on any projects not specified in the management district plan.
Many BIDs include lobbying, or “advocacy” as they’re pleased to call it, in their MDPs, but as far as I can see from looking over the SPBID’s MDP, they are not one of those. Perhaps they’re protecting themselves against problems by funding the reports mostly from outside money? Well, again, probably we’re never going to know, but it’s interesting to consider.
Image of Scott Rynders is ©2018 MichaelKohlhaas.Org and is scraped off the shoe of this Scott Rynders right here.
- The short version, in case you don’t want to read the linked-to article, and who can freaking blame you for that, is that such a district issues bonds to fund infrastructure improvements and then the bonds are covered by the increase in tax revenues created by the infrastructure improvements rather than by imposing new taxes. I think one major benefit of this is to evade some restrictions on issuing bonds to be repaid from new tax revenue. Not sure of the details, probably not important.
- In the reprehensible new urbanist vernacular this is called “undergrounding.” The MK.Org style sheet, which famously says whatever I want it to say at any given moment, as famously forbids the use of that particular verb until such time as all concerned realize the truth of the immortal wisdom of Cassandra Cassidy. Josh Kreger, looking at you here.
- Another term we don’t use on the blog. It’s OK here because of the quotes.
- And I probably don’t have everything, at least not yet. It’s one of the perennial challenges of this kind of journalism, that the story comes in fragments, over time, and often has to be revisited or revised as new evidence turns up.
- I don’t have copies of the talking points, at least not yet, even though they were attached to some of the down-chain emails. I obtained these emails tangentially in response to another request, and some of the down-chain emails weren’t responsive. I have new requests out and might possibly get some of this missing material in the future, or maybe not, given Ellen Riotto’s commitment to keeping her inbox “clean,” which appears to be Carolhumistonese for “you won’t get in trouble if you delete stuff before he asks for it or even after if you can keep your damn trap shut.” We’ll see how well that theory works out in the long term, certainly.
- The cynical point of view here is that it would make no difference to the Councilmembers, or would maybe even encourage them since they like to know that developers will pay money and the fact that they’re paying it to minor players like the BIDs makes it all the more likely that they’ll be happy to pay it to the Councilmembers themselves.