Public Power, Private Gain - The Castle Coalition

Public Power, Private GainGarden GroveIn July 2001, the Garden Grove City Council approved two new hotel projectsalong Harbor Boulevard, with at least $4.2 million in public financialassistance, for McWhinney/Stonebridge Corp., a Colorado-based developmentgroup that previously received tens of millions of dollars in assistancefor building other hotels in Garden Grove. For one of these new hoteldevelopments, the City has threatened to condemn 11 homes and 14 businessesunless the targeted owners agree to sell at the City’s prices. TheCity has already bought three other homes standing in the way of the hotel,and now is using heavy-handed tactics to force the other owners out.Assistant City Manager Matt Fertal takes an especially dim view of the rightof property owners along Harbor to use the free market to determine whatprice developers should pay to take their land from them. According toFertal, “[Owners] think that just because they’re on Harbor and hotels arecoming, that it increases the value of their property, but it doesn’t.Commercial [developers] only care about the cost of the dirt on the land.We’re offering to pay for the structure at the appraised value and theland.” 63 In other words, the rightful owners don’t deserve to profit fromtheir investment; instead, any profit will go to the City’s favored corporatedevelopers. And for the people who actually want to keep their homes orbusinesses, at least one city leader couldn’t care less.Garden GroveUntil outraged local residents mobilized in opposition, Garden Grove officialswere pushing hard to implement yet another redevelopment plan. This onewould have turned 264 acres of land in this densely populated city into atheme park. Garden Grove has recently undertaken a number of objectionableredevelopment schemes utilizing eminent domain (see above) thathave made the City one of the most land-grabbing in the nation. During aperiod of less than one year between 2000 and 2001 alone, the City paidout nearly $3 million to property owners who sued the City over its condemnationtactics. The theme park proposal, however, had even the mostardent pro-development locals scratching their heads. More than 470homes, as well as 300 mobile homes and dozens of apartments, were slatedfor condemnation. But following September 11, 2001, the tourist industryhas been in a nationwide slump, making the construction of anothertheme park in theme park-heavy northern Orange County an extremely riskyproposition for potential investors. 64Seven hundred angry residents packed a public hearing on the matter,expressing near-unanimous opposition to the idea of their homes being takenin favor of a third-rate Disneyland. Apparently this outcry resonated with theCity Council, which at its July 2002 meeting voted unanimously in favor of a63 Katherine Nguyen, “Selling—If the Price Is Right; Cities—As Garden Grove SeeksProperty on Harbor for New Hotels, Some Owners Feel Exploited by Offers Basedon Land Value,” The Orange County Register, July 25, 2002.64 “Garden Grove Bulldozers,” The Orange County Register, Apr. 16, 2002.Huntington BeachFinds thatRedevelopment IsBest AchievedWithout EminentDomainThe City of HuntingtonBeach has had a poor historywith regard to eminent domainabuse. In the 1980s, this bluecollarbeach community undertooka series of redevelopmentprojects that dramaticallychanged large parts of a citythat had once been composedmostly of small beach bungalows,oil fields, tract homes andfunky surf shops. Those buildingsthat had once definedHuntington Beach’s characterwere gradually replaced by sterilehigh-rises made of stucco, asCity officials tried to lure bigdevelopers with lavish publicsubsidies and condemnationsthat shut down the local businessesthat once gave the cityits unique character. However,many of these redevelopmentsfailed. Other cities such asNewport Beach that did notestablish redevelopment zonesgrew economically at rates thatfar outpaced HuntingtonBeach. 1When the City proposed anidea in the late 1990s to condemnthe Huntington BeachMall and turn it over to privatedevelopers, discount retailersMontgomery Ward andBurlington Coat Factory, whichowned stores at the mall, promisedto fight any attempt to taketheir property and hand it over30