Ever Wonder How One Of These Super-Sized Construction Projects Downtown Gets Built? — Here Is An Unprecedented Look Into How City Councilmembers And Developers Work As Partners To Subvert And Sideline Civil Service Staff And Basically Give Away Piece After Irreplaceable Piece Of Our City To Further Their Own Interests — Laid Out Step By Covert And Appalling Step — In The Case — Still Ongoing — Of 1330 W. Pico In CD1 — From Gil Cedillo’s First Meeting In August 2017 With Zillionaire Eri Kroh Of Sandstone Properties — Through Three Distinct Motions — Every Last One Of Which Signed By Cedillo But Written By A Lobbyist — And Sheparded Through City Staff — And Council Committees — And Council — By Cedillo’s Planning Director Gerald Gubatan — Who Insulted And Belittled Any Civil Service Staff Who Dared To Question Any Aspect Of The Project — Through CD1 Assistant Chief Of Staff Tony Ricasa’s Apparent Derailment Of Matt Szabo’s Plan To Use The Building For Homeless Housing — And Much Much More — Including Links To Hundreds Of Emails — And Draft Motions — And So On

Here in Los Angeles we read a lot of news about real estate development, real estate being the sun about which every local planet orbits. And this reporting mostly tells the truth, and probably nothing but the truth, but for the most part never the whole truth. Just for instance, consider the property at 1330 W. Pico Blvd. This parcel has been in the news since October 2017, when real estate developer Sandstone Properties bought it for $42 million, planning to build yet another hotel. Here’s The Real Deal’s story on the purchase.

The next reported-on milestone was in June 2018 when Gil Cedillo, in whose Council District the property is, introduced a rezoning motion allowing a hotel to be built at the address. Here’s The Real Deal’s story on that, and at this point Urbanize.LA1 initiated coverage with this equally superficial story. A few months later Cedillo moved to give the hotel hefty tax incentives,2 which was covered in the Downtown News as well as the two previous rags. And that’s the whole story, according to the local media.

The reporting rightly focuses on the motions themselves, although, interestingly, not all the motions.3 After all, without the motions, the rezonings, the tax incentives, and so on, the projects couldn’t get built. What all of these stories about this Sandstone project lack, though, what most such stories about all such projects are missing, is any sense of where the motions come from, how Council offices and developers collaborate to obtain the myriad permissions required for something like this proposed hotel to get built.4

And that story is amazing, really unexpectedly appalling.5 It’s revealed in astonishing detail by a massive set of emails I recently received from CD1, spanning more than two and a half years of discussions between lobbyists from at least three distinct firms6 repping Eri Kroh and Sandstone, CD1 planning director Gerald Gubatan, and various City of LA staffers in City Planning and elsewhere beginning in August 2017 and continuing to this day.

The lobbyists actually write and revise the motions that Cedillo introduces to further their cause.7 Gubatan works closely with the lobbyists basically in opposition to City civil service staff’s attempts to enforce the City’s laws and rules, and is outright contemptuous of their abilities.8 Cedillo himself stays distant from the process, but in no way detached. He met with the project’s zillionaire developer Eri Kroh and lobbyist Lali DeAztlan in August 2017, two months before the purchase was final. Presumably this is when Cedillo greenlighted the project.

In a post-meeting email to Gerald Gubatan DeAztlan shared her pleasure with the result: ” I think it went well, the Councilmember and the Owner Eri seem to speak the same language, and that gets us off to a great start.” After that Cedillo seems to have been briefed only once9 and otherwise didn’t have to do anything else once he’d set things moving except, of course, to sign the motions.10 The story is complicated and best understood by reading through the records themselves,11 but read on for a moderately detailed outline with link after link after link to the primary sources.

Removing the Property from a Historic Zone

In 2017 the property was in a Historic Preservation Overlay Zone.12 This severely limits the uses to which a property can be put and so had to be changed. Gubatan worked closely with lobbyists Lali DeAztlan of The DeAztlan Group and Joel Miller of Psomas, who provided him with talking points, which Gubatan embarrassingly later passed off as his own work. More importantly, Miller also wrote and subsequently repeatedly revised Cedillo’s successful motion removing the property from the HPOZ.

The HPOZ conversation started in August 2017, two months before the purchase was final. This in itself is important given that removing it from the HPOZ increased its value quite a bit, so Kroh’s advance knowledge that Cedillo’s office would back the removal was essential inside information, arguably creating a covert negotiating advantage for Kroh over the property’s owners. Given that both buyer and seller were represented by the same agent, Mark Tarczynski of Colliers International, there was ample room for various levels of fraud.

August 7, 2017 DeAztlan to Gubatan — The first email about the HPOZ change, confirming a meeting with Cedillo.

August 17, 2017 Miller to Gubatan — Joel Miller of Psomas enters the chat, attaching a list of talking points about why the property should be removed from the HPOZ to his email.

September 7, 2017 Gubatan to City Planner Ken Bernstein — Gubatan sends Bernstein Miller’s talking points and some other documentation without mentioning that he didn’t write the talking points. He also BCCs Miller and DeAztlan, which is really gross and also indicative of the whole tenor of this years-long saga. City Planners ought to be focused on the good of the City and Council staff oughtn’t to be undermining them, exposing them, siding against them with developers who, whatever they’re doing are not focusing on the good of the City.

October 20, 2018 Miller to Gubatan — After weeks of back and forth between Gubatan and Bernstein on one side and Gubatan and the lobbyists on the other regarding a meeting, a date is finally arranged.13 Miller asks Gubatan’s advice on whether it’d be fruitful for him to attend, worried that “Ken will see me as the project advocate (which I am) and not someone who can add much to the conversation about the appropriateness of amending the HOPZ.”

October 20, 2017 Gubatan to Miller — Here Gubatan, pretending to be joking, throws City Planner Bernstein totally under the bus with respect to Miller: ” I also agree that your presence might make Ken (the zealot….joke) less than candid so I agree with your judgement here.”

November 20, 2017 Miller to Gubatan — Here Miller updates Gubatan on his meeting with Bernstein about removing 1330 W Pico from the HPOZ. Miller’s concerned that Bernstein insists that the process requires Council to pass an ordinance and that this would cause a delay which would interfere with the developer’s plans for the property. Miller mentions that he suggested a “short cut” process to Bernstein.

January 22, 2018 Miller to Gubatan — City Planning eventually told Miller that his proposed short cut was infeasible in this instance and that a motion leading to an ordinance would be necessary to remove the property from the HPOZ. Here’s Miller informing Gubatan of this and soliciting Cedillo for a motion.

More than soliciting, actually. Offering to write it: “Gerald, I assume that having CM Cedillo introduce a motion to amend the HPOZ will not be an issue. I thought I would check with you to see if your office has an example of such a motion. If you do not, I will ask Christina and Ken Bernstein if they have an example for another HPOZ. If they don’t, it won’t be a problem for our office to create one.”

January 22, 2018 Gubatan to Miller — Yes, says Gubatan,14 please do the CM’s job for him! “For starters, a draft Motion would help – is City planning staff going to provide examples of previous Council Motions? Otherwise a draft Motion out of your office can only help. “

February 1, 2018 Miller to Gubatan — Now Joel Miller sends Gerald Gubatan a motion that he wrote for Gil Cedillo to introduce to remove the property from the HPOZ. Here’s the first draft of Miller’s motion.15 To me this is one of the most shocking facts revealed by this set of documents. Somehow I’d assumed that Councilmembers made their own decisions, had their staff write their motions based on the results of their deliberations, and so on. Not sure why I thought this, and the fact that lobbyists write the motions makes perfect sense, but seeing it happening step by step like this is still an unpleasant surprise.

February 14, 2018 Gubatan to Miller — After some back/forth16 Gubatan sent Miller an edited-down version of the motion, leaving out a lot of nonsense but making no substantial changes. Gubatan then emailed this version to Roberto Mejia at the Chief Legislative Analyst’s office.

February 14, 2018 Mejia to Gubatan — Just a few hours later Mejia, working late, sent a mildly revised version back to Gubatan and early the next morning Gubatan forwarded it along to Miller.

February 15, 2018 Miller to Gubatan — Miller was fine with the new version. And he’s ready to get the damn thing scheduled! And Jose Huizar at that time was still the head of the PLUM committee and Miller’s wired in, no surprise there: “Thanks, Gerald, for fast-tracking this. We can, of course, work with both Ken [Bernstein] and CM Huizar’s office to get this scheduled at PLUM, if/when necessary.”

February 15, 2018 Miller to Gubatan — A couple minutes later Miller had had a thought. He sent a new draft to Gubatan with non-substantive changes and a caveat about how time was more important and that Gubatan should ignore this version if changing it would slow things down. Nine minutes later Gubatan sent Miller’s new draft to Bernstein and Terry Kaufmann-Macias of the City Attorney’s office for review.

February 21, 2018 Miller to Dave Garcia at Sandstone — After a bunch more back-forth between Gubatan, Miller, Mejia, and Bernstein about the motion, with Miller writing a few more drafts, it was ready to go.17 Here’s Miller emailing his client Dave Garcia of Sandstone letting him know that Cedillo was now, finally, poised to finalize this particular stage of the process by introducing the motion.

Council File 18-0164 — And Cedillo introduced the motion on February 28, 2018 as planned. But that’s not enough. A motion still has to get on a committee agenda to move forward, and it turns out that the lobbyist takes care of that also.

March 9, 2018 Miller to Shawn Kuk — The motion needed to go to PLUM which, at that time, was run by Jose Huizar, now famously under investigation by the FBI for unnamed sleaze which, however, is almost certainly related to his work on PLUM. And his planning director Shawn Kuk, to whom this email is addressed? Also under investigation.

And here’s Joel Miller asking Kuk to get the damn motion on an agenda: On February 28, 2018, CM Cedillo introduced the enclosed motion to start this process. My understanding is that the next step is to have the item heard at PLUM. This is not urgent, but we are hoping that we can have PLUM consider this motion in about a month. I would imagine that whatever needs to happen to reach PLUM will be coordinated with your office and OHR, but we are more than happy to help in any way needed. Just let me know.

Council File 18-0164 — The motion was approved on March 27, 2018. But they weren’t done yet!

General Plan Amendment

This HPOZ issue was only one of many battles in the ongoing campaign to get a hotel built at this address. For the sake of everyone’s sanity I won’t cover the rest of them in such painstaking detail, but the information to do so is available in the complete set of records. The next obstacle lay in the fact that the property was zoned for commercial manufacturing rather than regional center commercial, which was necessary for building a hotel. Gubatan worked with Miller to have the local general plan amended to change this. City Planning stalled, Gubatan ran interference and provided back-channel advice to the lobbyists. DeAztlan wrote a draft motion. Kira Teshima of international lobbying powerhouse Sheppard Mullin got involved as well.

This part of the saga unfolded much as the HPOZ change, with lobbyists writing motions, Gubatan mediating between them and City staff and taking the side of the lobbyists whenever possible. I’ll skip the details because, although sordid, they’re not that different from what we’ve already looked at. This effort culminated in CF 18-0509, which in June 2018 spot-zoned the parcel to have a FAR of 6:1 and a change in height zoning as well. All of which is like free money for the developer.

Economic Incentives

But not enough free money for the developer. There’s never enough free money. The next stage in the process involved getting economic incentives for the project. This bit kicked off in October 2018 with Sheppard Mullin lobbyist Kira Teshima emailing Gubatan with yet another lobbyist-written draft motion. After almost a year of email discussions as detailed as the ones I described above regarding the HPOZ problem, this matter finally ended up in Council File 19-1022, initiated in September 2019 with this motion, signed by Gil Cedillo, that’s substantially identical to the October 2018 version by Teshima.

The motion doesn’t actually grant Kroh/Sandstone the incentives, by the way. Instead it authorizes the Chief Legislative Analyst to accept $150K from Sandstone to hire consultants to evaluate the financials and economic benefits associated with the project and based on that analysis to recommend regarding economic incentives. Presumably there will be other motions needed in the future to actually adopt the findings of the consultants, and so on. Presumably those motions will also be written by lobbyists and signed by Cedillo. It was approved by Council and signed by the Mayor in December 2019.

Bicycle Parking at 1330 W Pico

The process of getting this building built is far from over, though. Not only do the consultants have to be hired and write their report but other problems will arise and need to be handled by official Council action or by Gerald Gubatan handling them through various City departments. One such issue already seems to be impending, having to do with bicycle parking requirements.

On January 21, 2020 Sheppard Mullin lobbyist Reuben Duarte emailed Gubatan about this issue, stating that City Planning “has taken the position that LAMC Section 12.32.P does not permit a reduction in bicycle parking. However, our review of this code section indicates that the Code does not distinguish between bicycle and automobile parking, and instead provides the City Council the flexibility to grant relief.”18Those words, “the flexibility to grant relief,” define the space where lobbyists do their work and it’s on this ground that Duarte is asking Gubatan “for Council assistance to reduce the short-term bicycle parking requirement required under the LAMC for a hotel.” I’m sure we’ll hear more about this in the future.19

Homeless Housing at 1330 W Pico

One thing this story illustrates is the damage done to the public sphere by developer influence over Councilmembers. Over and over and over again we see Cedillo staffer Gerald Gubatan championing the needs of developers over the opinions of City staff, presumably hired as experts and expected to implement City policies in line with City priorities. Overriding their judgment repeatedly in the service of development is harmful. But it’s not the only kind of harm done. The resources allocated to developers for projects like these are taken away from other projects that may well be more important to the public, to the people of Los Angeles.

Just for instance, in November 2017 Cedillo’s Assistant Chief of Staff Tony Ricasa apparently learned that the City of LA was considering using 1330 W. Pico for a homeless housing project. He emailed Deputy Mayor Matt Szabo to ask about it. Ricasa specifically mentions the fact that Cedillo’s staff, meaning Gubatan, have been working with developers regarding that site.

The materials I currently have don’t cover conversations between Ricasa and Szabo, but in January 2018 Lali DeAztlan emailed Gubatan to ask about Szabo, since obviously using the site for housing would really interfere with her clients’ plans! Subsequently Gubatan asked Ricasa to talk to Szabo and get it sorted out. It’s not clear what happened exactly other than that the site didn’t end up being used for housing. Ricasa, as cautious as such shady operators must be in order to succeed on the level that Ricasa has, intentionally avoided setting down his response to Gubatan in writing: “I’ll come by and chat with you. Thanks.”

Conclusion

Congratulations if you made it this far! I’ve tried to lighten up the story a little but it’s intrinsically heavy reading. The tedium, the very complexity, the unending banality of the City processes involved in these projects provides cover for the grifty goings-on. No individual step is sexy enough to get exposed by journalists who have to worry about selling papers20 but all together they add up to very corrupt practices indeed.


Image of Gerald “GGG” Gubatan is ©2020 MichaelKohlhaas.Org and here’s the little crowd-pleaser pleasing a crowd!

  1. Yet another of this City’s many purveyors of weaponized zombie real estate dezinformatsiya, and neither the smartest nor the most coherent of that disgraceful pack.
  2. I am glossing over a bunch of details here. Cedillo actually moved to accept money from the developer to allow the Chief Legislative Analyst to hire consultants to conduct a study showing that the project would generate revenue for the City sufficient to justify awarding them hefty tax incentives. The study isn’t out and the Council hasn’t yet given the incentives. There’s no motion on the table for that. But there will be. This initial motion, given the way municipal politics in Los Angeles works, is as good as a final approval. Or that’s how it has been for most of the City’s history. It’s possible, just conceivable, that we may be at a turning point, that the times, they are indeed a’ changing. See, for instance, how Nithya Raman forced incumbent David Ryu into a runoff. We’re coming for these grifters and they have to be realizing it by now.
  3. See below for the story of the unreported-on motion to remove the parcel from a historic preservation overlay zone, which was well over a year in preparation and was a crucial prerequisite to building anything. I’m not sure why this wasn’t covered by the local news.
  4. And no discussion at all about the complexities, the endless meetings, the discussions, the hearings, and so on, that any complex project must require. Anyone who’s tried to get even something quite simple out of a Council office knows that nothing at all happens easily, nothing happens by itself. If that’s true for fixing a sidewalk or getting a locked and gated alley opened briefly so the cable guy can climb a pole, how much more so for projects of this magnitude? That complexity is an essential but universally neglected part of the story.
  5. I should say that the fact that it’s appalling is not unexpected. Most work done in Council offices, especially that done on behalf of zillionaires, is appalling. It’s the level of appallingness that’s unexpected. And at this point in my Angelenological career it takes a lot of appallitude to strike me as unexpected, but this mess really did it!
  6. Psomas, Sheppard Mullin, and DeAztlan Group.
  7. The records produced by CD1 include not only the conversations but all the actual draft motions!
  8. As reflected in the under-bus-throwing jokes he makes about them with the lobbyists and the fact that he regularly BCCs his emails with City staffers to the lobbyists whose interests he’s furthering.
  9. by which I mean that I only saw signs of one briefing in the released emails. It’s possible, maybe even likely, that he was briefed regularly in ways that didn’t leave a trace in this set of material.
  10. It’s quite likely that Cedillo is not absent at all from the process, that he’s intimately involved, but that he’s protected from the record by his staff, maybe talking to him rather than emailing, maybe by using secret private email accounts.
  11. The best way to read emails is as MBOX files imported into Mozilla Thunderbird. CD1 has lately started providing MBOX files, which is great. If you need help importing and using in TBird I’m happy to show you how to do it, just drop a line to mike@michaelkohlhaas.org.
  12. HPOZ.
  13. Oh my goodness, in the interest of this not being a damn Russian novel I am skipping so much fascinating material here regarding yet another lobbyist, Jenna Snow, who Gubatan keeps calling Jenna Stone. Really, read the emails!
  14. Gubatan always says yes. Too bad he’s determining the long-term future of our City rather than participating in improv games or being a fuckboi or some other activity where always saying yes is appropriate.
  15. Here’s the original MS Word file. Check the metadata for confirmation that Miller actually did write this.
  16. Worth reading, sorry I have to skip stuff. This post is already long!
  17. I’m skipping these exchanges here because it’s already too long, but it’s likely worth your time to take a look here in the full production if only to see how incredibly freaking cozy Gubatan and Miller are and how it’s really Gubatan defending Miller’s client’s interests against what everyone seems to see as the threat posed by civil servants like Bernstein. It’s really, really topsy turvy.
  18. By the way, this shows that Sheppard Mullin lobbyists were also communicating with City Planning independently of Gubatan, which suggests a separate line of inquiry via CPRA, that I unfortunately don’t have time to look into.
  19. It’s possible that Gubatan is sick of these people. As of February 14, 2020, which is where the emails released in this set end, Gubatan hadn’t answered Duarte, who was reduced to sending a follow-up email asking if Gubatan was planning to answer.
  20. Or at least their editors have to worry about selling papers.
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