Category Archives: Business Improvement Districts

Business Improvement Districts

Why It’s Quite Likely That Blair Besten Broke A Number Of Laws By Lobbying The City Of Los Angeles Over Skid Row On Behalf Of The HCBID Board Of Directors In November 2016 And Arguably Even Committed A Misdemeanor

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Blair Besten rocking the Pharcyde.
So a couple weeks ago I wrote about an episode in November 2016 when Blair Besten, executive directrix of the good old Historic Core BID, at the behest of her Board of Directors, lobbied the City of Los Angeles about incentives for Skid Row development which included a seemingly endless list of wet fever dreams like no taxes ever, no height limits, no required affordable housing, and so on. Well, then someone posted my post to the Facebook asking, among other things, if Blair Besten’s lobbying was even legal. The post unleashed a deluge of stranger-danger visits to our cozy and haimish little blog and the usual slew of idiotic comments by the usual slew of unselfaware idiot commentators over on the Facebook itself.

Well, Mom had a favorite saying about wrestling with a pig, and that goes doubletime for arguing with the Facebook commentariat. So we all just ignored the whole mishegoss until, as will sometimes happen, it occurred to me that one of the most ignorant offensive mansplainy clueless wrong-headed imaginary-internet-lawyerly comments of all would provide a perfect foil for a post that I had been meaning to write for a while now anyway, and that’s how we ended up right here and now, friends.

The dimwitted commenter asked1 the OP: “What specific actions of hers do you think are of questionable legality?” This is one of them Internet comments that’s supposed to make the reader say something like “Hmmm…. now that I read that incisive question I can see that I really am a foolish dupe after all and the only reason I even had an opinion is because no very smart fellow ever challenged me… OK, I retract every idea I have ever had!!

However, as it happens, there are a number of ways in which Blair Besten’s specific action of lobbying the City on behalf of her employers with respect to development conditions on Skid Row violated various laws. For better or for worse, the discussion is unavoidably technical, and you gotta turn the page if you wanna read it!
Continue reading Why It’s Quite Likely That Blair Besten Broke A Number Of Laws By Lobbying The City Of Los Angeles Over Skid Row On Behalf Of The HCBID Board Of Directors In November 2016 And Arguably Even Committed A Misdemeanor →

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Business Improvement Districts, Los Angeles City Government

Why In The World Did City Employees Avak Sarafian And Huizar Staffer Kevin Ocubillo Attempt To Get The Historic Core BID An Illegitimate Waiver From Its Statutory And Contractual Obligation To Disclose The Profits It Made From Slavery?!

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In 2003 the City of Los Angeles passed a Slavery Disclosure Ordinance,1 which, in short, requires most firms that contract with the City to disclose any profits they2 made from American slavery prior to 1865. The L.A. Times published a good contemporaneous summary of the issues, which is worth a read.

This measure was promoted by pro-reparations advocates as a (mostly) symbolic expression of the City’s opposition to slavery. It’s mostly symbolic in, first, that it only requires disclosure. In fact, the only actual tangible requirement of the law is that contractors complete a disclosure affadavit. No firms that profited from slavery are prevented from doing business with the City. Also, any number of types of firms are exempt from the law. An exhaustive list of exceptions can be found at §10.41.3.

Among these are, most crucially, financial institutions. Since banks, stockbrokers, and other such firms doing business in finance are likely either to have existed prior to the ratification of the Thirteenth Amendment or else to have acquired financial firms that were, and since every major business in the U.S. during slavery times made money from the stolen labor of slaves,3 this is no minor exception.

Another huge exception is that the law only applies to slavery in the United States before 1865.4 Of course, slavery in present-day Los Angeles is not only rampant, it’s not only tolerated, but is probably pretty acceptable, at least to elected City officials given the likely level of campaign contributions made by slavers. After all, it’s not poor people buying those slaves, and probably not politically uninvolved people, either. Just for instance, between them, modern-day slaveholders Ray and Ghada Irani have given more than $22,000 to various candidates.5 Given the obsessive contribution-seeking behavior of our Councilmembers, this is more than enough explanation for the narrow scope of the law.6

And finally, for whatever reason, §10.41.3(E) exempts 501(c)(3) corporations, and that brings us to this morning’s actual subject, which, believe it or not, is the Historic Core Business Improvement District.
Continue reading Why In The World Did City Employees Avak Sarafian And Huizar Staffer Kevin Ocubillo Attempt To Get The Historic Core BID An Illegitimate Waiver From Its Statutory And Contractual Obligation To Disclose The Profits It Made From Slavery?! →

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Announcements, Fashion District BID, Municipal Ethics

New MK.Org Coffee Mug Honoring Leron Gubler And The Hollywood Chamber Of Commerce For Being Extra Super Duper Law Abiding, Also Tons Of New Fashion District BID Emails

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My recent post about the Hollywood Chamber of Commerce and its lobbying disclosure activity was so popular, or at least the picture that accompanied the post was so popular, that, effectively although not actually by popular demand, we here at MK.Org created yet another souvenir gift mug, an accessory with which you too can tell the world that you’re opposed to bad BIDness in Los Angeles and also is very handy for the drinking of coffee and other hot beverages! We here at MK.Org feel that this item has the potential to outsell our current bestselling item, the Blair Besten anti-CPRA award mug. Help us make that dream come true, friends!

Turn the page for link to newly obtained emails from the Fashion District.
Continue reading New MK.Org Coffee Mug Honoring Leron Gubler And The Hollywood Chamber Of Commerce For Being Extra Super Duper Law Abiding, Also Tons Of New Fashion District BID Emails →

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Business Improvement Districts, Historical and Theoretical Perspectives

Why Are BIDs In Los Angeles Allowed To Pay For Their Renewal Out Of Current Assessments? It Seems To Be Some Kind Of Pernicious Circular Reasoning And May Well Violate The Law

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I’m presently working on a number of fairly involved projects which relate to the establishment and renewal processes for BIDs. There’ll be more news on that later, but, tangentially, in the course of my research I’ve noticed that BIDs that are up for renewal tend to state the fact in their Annual Planning Reports (“APRs”). Just for instance, here’s the Fashion District’s 2017 APR. In there, on page 3, you can see BID renewal under the heading “Management/City Fees (Zones 1-9): $487,795.00 (10.67%).”

It’s only recently that I’ve come to understand the importance of these APRs. First of all, BIDs in California are required by State law to produce them. According to the Streets and Highways Code at §36650(a):

The owners’ association shall cause to be prepared a report for each fiscal year, except the first year, for which assessments are to be levied and collected to pay the costs of the improvements, maintenance, and activities described in the report.

In the laconic dialect of the law, this seems to say that assessments are to be spent on “improvements, maintenance, and activities” if and only if they are listed in the APR. This is one reason these APRs are essential to understanding the operations of BIDs. They’re explicitly forbidden from spending money on matters not listed in the APR and they’re explicitly required to carry out matters that are listed. This is possibly part of the reason why the City exercises hyperspecific control over the content of APRs even as they categorically refuse to exercise any control whatsoever even over overt malfeasance by BIDs.

And elsewhere in the law, specifically at §36622(k)(2), we find a statement of the infamous “special benefits” requirement for property-based BIDs:

In a property-based district, the proportionate special benefit derived by each identified parcel shall be determined exclusively in relationship to the entirety of the capital cost of a public improvement, the maintenance and operation expenses of a public improvement, or the cost of the activities. An assessment shall not be imposed on any parcel that exceeds the reasonable cost of the proportional special benefit conferred on that parcel. Only special benefits are assessable …

So BIDs are required to spend money on activities listed in the APR and all money they spend must be spent on special benefits to the property owners. Therefore the presence of BID renewal as a fundable activity in the APR implies that BID renewal in itself must be a special benefit to the property owners.
Continue reading Why Are BIDs In Los Angeles Allowed To Pay For Their Renewal Out Of Current Assessments? It Seems To Be Some Kind Of Pernicious Circular Reasoning And May Well Violate The Law →

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Business Improvement Districts, Municipal Ethics

The Hollywood Chamber Of Commerce Amended Its Lobbying Registration Form in April 2017 And The Only Change Was The Date They Qualified — More Interesting, Though, Is The Fact That They Consider Their Pro-Establishment Advocacy For Jeff Zarrinnam’s Inchoate Hollywood-Western And Route 66 BIDs To Be Lobbying Activity

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It’s well-known that the Municipal Lobbying Ordinance requires lobbyists of all stripes to register with the City Ethics Commission. The Hollywood Chamber of Commerce is no exception to the rule.1 They are also required to amend their registration forms if there are any material changes in the information provided.2

And as you know if you follow this blog, I find everything to do with lobbyists in Los Angeles fascinating, and thus I haunt the Ethics Commission’s lobbying pages, poring over the alphabetical lists of individual lobbyists and of lobbyist firms and employers to see if anything’s changed or if something is newly interesting.

And lo! Last night I noticed that our old friends, the Hollywood Chamber of Commerce, had amended their registration form on April 28. Here are the two forms:

Well, I stared and stared and stared at those two forms just trying to figure out what had changed. Eventually I noticed that the original form had January 31, 2017 as the date they’d qualified as a lobbying entity3 whereas the amended version had January 1, 2017 as the day of qualifying.

One of the Hollywood Chamber’s registration forms superimposed on the other with 38% opacity so that it’s clear that the only difference is in the qualifying date. Click to enlarge, of course.
There’s a lot of information on the forms, though, and I didn’t feel confident that the difference I’d noticed was in fact the only difference. I wasn’t sure what do to until this morning, when it occurred to me that if I put both pages into the GIMP, superimposed one on top of the other, and then faded the opacity up and down I’d be able to notice what changed.4 And it turns out that in fact, it’s correct that the only change was the date of the Hollywood Chamber’s qualifying as a lobbyist.

Which leads irresistibly to the question of why Leron Gubler and/or Nicole Shahenian, who are the Hollywood Chamber’s two registered lobbyists, felt the need to make this tiny change. Read on for speculations and some other chit-chat about the fact that Leron Gubler lists the establishment of the Hollywood Western and the Route 66 BIDs as issues the Chamber is lobbying for this year.
Continue reading The Hollywood Chamber Of Commerce Amended Its Lobbying Registration Form in April 2017 And The Only Change Was The Date They Qualified — More Interesting, Though, Is The Fact That They Consider Their Pro-Establishment Advocacy For Jeff Zarrinnam’s Inchoate Hollywood-Western And Route 66 BIDs To Be Lobbying Activity →

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Venice Beach BID

News Flash! Venice Beach Property Owners Association Contract With The City Of Los Angeles To Administer The Venice Beach BID Was Attested Yesterday (But As Of Right Now Is Not Available Online)

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Game on in Venice!
UPDATE: The signed contract is now available online.

There’s not much to say here. It’s Contract number C-129375, and I assume a PDF of it will show up at that link at some point in the future. I also assume that this means that the Venice Beach BID is finally going to commence operations, so let’s get ready for action, friends!
Continue reading News Flash! Venice Beach Property Owners Association Contract With The City Of Los Angeles To Administer The Venice Beach BID Was Attested Yesterday (But As Of Right Now Is Not Available Online) →

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Central City East Association, Lawsuits, Public Records Act Pragmatics

The LA CAN & Catholic Worker Lawsuit Has Cost The Central City East Association At Least $115,000 In Legal Fees And Costs (And How It Took Me Two Months Of Hardcore CPRAfaction To Discover This Fact)

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Around these parts we refer to the California Public Records Act as CPRA, pronounced SIP-rah. The methodologies and practicalities of using CPRA are known as CPRAfaction, pronounced SIP-rah-faction.

You may recall that in March, the Central City East Association settled the momentous lawsuit brought against it by the Los Angeles Community Action Network and LA Catholic Worker.1 This was mere months after beloved Los Angeles gadfly Eric Preven and the incomparable ACLU of Southern California won a momentous decision in the California Supreme Court, which ruled essentially that once a legal case was finished the legal privilege exemption to CPRA2 no longer applied. No coincidences around here! So I fired off an email to Estela Lopez as follows:

Good afternoon, Estela, and happy Palm Sunday.

And congratulations on settling that 2014 lawsuit, namely LACW et al. v. Downtown Industrial District BID et al. (2:14-cv-07344-PSG-AJW). I would like to look at copies of all bills from all lawyers who worked for the CCEA on this case.

For the sake of efficiency, and in case you’re not already aware aware of this, here’s a link to an LA Times story on the recent Supreme Court decision declaring that once a case is resolved the bills become public records:

http://www.latimes.com/local/lanow/la-me-ln-court-legal-bills-20161229-story.html

As you can imagine, there was a lot of back-and-forth, with her mostly refusing to hand over the legal bills, until this afternoon, when she did hand them over. The full story of that, with bunches of emails and also a reasonable amount of CPRA nerdview, can be found after the break if you’re interested.

But here are the actual bills to CCEA from their lawyers, Hill, Farrer, & Burrill. I spent a little time adding up the totals and their total legal bills, costs and fees, seem to have come to $89,782.54 over the last three years. Add this to the $25,000 they agreed to pay the plaintiffs in the settlement agreement and their whole bill comes to $114,782.54. This is over slightly less than three years, and the BID’s annual budget is roughly $2,000,000, so it’s relatively not that much.

According to Estela Lopez in 2015 there are more than 2000 homeless human beings living in the CCEA’s territory. Thus this lawsuit cost them a little more than $57 per potential harassment victim. I’m sure this seems cheap at the price. Anyway, that’s the substantive information. Turn the page for the story of how I got my hands on it!
Continue reading The LA CAN & Catholic Worker Lawsuit Has Cost The Central City East Association At Least $115,000 In Legal Fees And Costs (And How It Took Me Two Months Of Hardcore CPRAfaction To Discover This Fact) →

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Business Improvement Districts, Skid Row Neighborhood Council

On November 21, 2016 Blair Besten Told The City Of Los Angeles That Her Zillionaire Developer Bosses Were Ready To Gentrify And Build Out Skid Row And Listed The Kinds Of Zillion Dollar Handouts, Tax Breaks, And Zoning Giveaways They Wanted. Seven Weeks Later She Was Lobbying José Huizar In Opposition To Skid Row Neighborhood Council Formation. This Is Not A Coincidence

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Background: You can read my previous stories on the Skid Row Neighborhood Council formation effort and also see Gale Holland’s article in the Times for a more mainstream perspective.

Scott Gray of major Skid Row property owner Capital Foresight, likely behind-the-curtain string-puller for the covert anti-SRNC lobbying campaign, was famously quoted in the Downtown News in March 2017 with respect to the Skid Row Neighborhood Council formation effort to the effect that:

…the pending proposal to divide Downtown Los Angeles into separate geographic districts will have significant fiscal and far-reaching economic impact on the entire city

Anyone who attends to the shady world of Los Angeles real estate development can easily imagine in the abstract the kinds of things Scott Gray means, but there has hitherto been very little specific information about what he was talking about.

It turns out that in November 2016 Blair Besten’s megadeveloper bosses at the Historic Core BID had their heavy artillery aimed at Skid Row and had begun soliciting the usual array of sleazy under-table giveaways, such as tax abatements, relaxed zoning, and so on. It’s no surprise at all, then, that when the Skid Row Neighborhood Council Formation Committee’s proposal was approved by the Department of Neighborhood Empowerment in January 2017 they flipped out to the astonishing degree that they did. As always, documentation and highly detailed description after the break.
Continue reading On November 21, 2016 Blair Besten Told The City Of Los Angeles That Her Zillionaire Developer Bosses Were Ready To Gentrify And Build Out Skid Row And Listed The Kinds Of Zillion Dollar Handouts, Tax Breaks, And Zoning Giveaways They Wanted. Seven Weeks Later She Was Lobbying José Huizar In Opposition To Skid Row Neighborhood Council Formation. This Is Not A Coincidence →

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Fashion District BID, Public Records Act Pragmatics

The Fascinating Story Of How It Took Three Months And A Demand Letter From An Attorney To Get Rena Leddy To Disclose That The Fashion District BID Is Paying Steve Gibson Of Urban Place Consulting $215 Per Hour For BID Renewal Consulting, Which Is Less Than Larry Kosmont Gets But More Than Ed Henning

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Late last year it occurred to me that BID consultants, who help BIDs with the City processes necessary to establish or renew a BID, are essentially engaging in lobbying activity as defined in the Municipal Lobbying Ordinance at LAMC §48.02 and yet none of them1 seemed to be registered with the Ethics Commission as required by LAMC §48.07(A).

I then spent months piecing together over 100 pages of evidence to show that BID consultant Tara Devine had violated this law. Subsequently it occurred to me that the contracts that the consultants sign with BIDs would provide essential evidence that they’d been acting as lobbyists, so I determined to request these from many renewing BIDs. This led me to the discovery, thanks to the incomparable Laurie Hughes of the Gateway to LA BID, that GTLA’s BID consultant, Larry Kosmont, actually was registered as a lobbyist and had disclosed his BID consultancy as lobbying in his required reporting. The San Pedro BID is also up for renewal, and has recently released a fairly complete set of BID renewal records.

This brings us to the Fashion District. On February 21, 2017 I emailed Rena Leddy to request, among other material:

… all records associated with the renewal process, including but not limited to communications between the BID and the consultant and/or the engineer, contracts with and invoices from the consultant or the engineer, materials prepared by the consultant or the engineer for the renewal process, databases and mailing lists prepared or used by the consultant or the engineer, and also any communications between the consultant and the engineer that aren’t already responsive to the first part of this request.

The story of what happened after that stretched out over three months and generated many many megabytes of discussion. Read on for a (far too) detailed and exceedingly well-documented narrative recounting, complete with a happy, happy ending!
Continue reading The Fascinating Story Of How It Took Three Months And A Demand Letter From An Attorney To Get Rena Leddy To Disclose That The Fashion District BID Is Paying Steve Gibson Of Urban Place Consulting $215 Per Hour For BID Renewal Consulting, Which Is Less Than Larry Kosmont Gets But More Than Ed Henning →

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Business Improvement Districts, Municipal Ethics

Relatively Complete Set Of Records Pertaining To Ongoing San Pedro Historic Waterfront BID Renewal Process Reveals Hitherto Unknown Details About Costs, Hours, Contract Terms, Etc. Heralding Plausible Case Against Edward Henning For Failure To Register As A Lobbyist But Not, Unfortunately, Against The BID Because They’re Not Paying Him Enough

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Last month I learned that the San Pedro BID was paying Edward Henning $20,000 to handle their BID renewal process. This discovery was independently interesting, but also important for my ongoing research project of learning everything possible about BID consultancy with the ultimate goal of shopping as many BID consultants to the City Ethics Commission as possible, mostly for violations of LAMC §48.07, which requires that “[a]n individual who qualifies as a lobbyist shall register with the City Ethics Commission within 10 days after the end of the calendar month in which the individual qualifies as a lobbyist.”

In this clause, someone “qualifies as a lobbyist” when they, according to LAMC §48.02 are “compensated to spend 30 or more hours in any consecutive three-month period engaged in lobbying activities.”1 Note that today I’m mostly skipping the argument that BID consultancy qualifies as lobbying activities, but you can read about it in excruciating detail here.

Part of the evidence that I obtained last month were these two invoices from Edward Henning to the SPHWBID. As you can see, they span the time period from March 2016 through December 12, 2016 and bill for a total of 75 hours. That’s roughly 7.5 hours per month if distributed evenly across the billing period. This is not enough evidence to show that Edward Henning was required to register. In fact, if he did work about 7.5 hours a month he would not have been so required.

It’s precisely that issue that today’s document release shines some light on. The other day, San Pedro BID executive directrix Lorena Parker was kind enough to send me over 100 emails to and from Edward Henning.2 At first I thought I’d be able to pick out 3 consecutive months in which Edward Henning was compensated for 30 hours by assuming that the number of emails in a month was proportional to the number of hours worked. This didn’t pan out for a number of reasons, not least because I don’t yet have emails between Edward Henning and the City of LA that weren’t CC-ed to Lorena Parker. I can tell from internal evidence that there are some of these,3 and I have a pending CPRA request for them, but they’re not yet in hand.

Read on for more detail on the unregistered lobbying case as well as a new theory that I thought at first might actually get the BID itself in some trouble rather than just the consultant. I don’t think it’ll work out in this particular case, but it has interesting implications for the future. Bad scene for the BIDdies and lulz4 all round for humanity!
Continue reading Relatively Complete Set Of Records Pertaining To Ongoing San Pedro Historic Waterfront BID Renewal Process Reveals Hitherto Unknown Details About Costs, Hours, Contract Terms, Etc. Heralding Plausible Case Against Edward Henning For Failure To Register As A Lobbyist But Not, Unfortunately, Against The BID Because They’re Not Paying Him Enough →

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