Un-civil war

Eron Ben-Yehuda and Andrew Wainer

HUNTINGTON BEACH -- The drawn-out, divisive debate over building a

Wal-Mart on an old school campus -- a matter that will be settled in

Tuesday’s election -- has become the city’s own civil war, not only

pitting residents against one another, but also family members.

Measure I proposes to rezone the closed Crest View site from commercial

to residential -- a switch designed to scuttle a Wal-Mart lease.

Harry Morris and his sister, Dale Colbert, own The Furniture Place, a

small store near the site where the Arkansas-based retailer plans to open

the 150,000-square-foot complex.

Like so many around town, they disagree about what a future Wal-Mart

might mean.

“It seems like the closer Wal-Mart is, the better off you are,” Colbert

said.

But Morris sees a darker future if the world’s largest retailer sets up

shop in the city.

“They just start squeezing out the competition,” he said.

More than just neighboring businesses, the potential winners and losers

cut across the community. From the 10,000 students who are promised

better facilities because of increased sales tax dollars to nearby

residents who worry about their quality of life. From city officials

desperate to capture more sales tax to slow-growth advocates railing

against what they see as the latest example of overdevelopment.

THE SPIN

Emotions have run high for half a decade, real or imagined conspiracies

have been hatched, and allegations of dirty tricks have been hurled by

opposing camps over the 14-acre former school site on Talbert Avenue by

Beach Boulevard. The swirling controversy has engulfed the project’s

developer, a fledgling local bank and even a neighboring city, Fountain

Valley. During a heated disagreement about the merits of the project, an

associate city planner was reduced to tears.

Wal-Mart officials have not stood idly by, pumping in more than $380,000

to promote its cause -- more than eight times the total amount the

retailer’s opposition, Save Crest View, has raised. It has become the

most expensive campaign in city history, with the Wal-Mart friendly

campaign raising a total of $400,000 and the Measure I campaign raising

$42,700.

The rancor will subside for a moment Tuesday as voters cast their ballots

on the resident-sponsored initiative that threatens to kill the proposed

Wal-Mart.

Plans call for the former Crest View school campus to be leased to the

retailer by the Ocean View School District, which owns the property.

Residents living nearby are, not surprisingly, the project’s most vocal

opponents, leading some to dismiss them as suffering from a

not-in-my-backyard attitude. These Wal-Mart detractors plead guilty, but

they say they’re just sticking up for residential rights.

They formed a group, Crest View United, that gathered more than 15,000

signatures from residents, enough to qualify for the ballot measure.

The message is simple: A big-box retailer doesn’t belong in a

neighborhood where there is already too much noise, traffic and air

pollution.

At one point, school officials agreed.

At a December 1995 Planning Commission meeting, Ocean View Supt. James

Tarwater told the commission that commercial projects planned for the

site, which was zoned for residential use at the time, would “not be a

big box.” Instead, he said the district would try to develop a “mini-mall

sort of thing, with four or five vendors.”

That, however, changed when Wal-Mart came to town.

“They are giving this area the shaft,” said Marvin Josephson, Crest View

United’s chairman.

THE BACKGROUND

The city’s Planning Commission agreed with Josephson in August 1998,

voting against the project and saying the site would better serve the

community as open space. That decision was overturned by a split City

Council a few months later, in December, after a six-hour public hearing

that included 75 speakers, most of them opposed to the proposal.

Mayor Dave Garofalo and City Council members Shirley Dettloff, Pam Julien

and Ralph Bauer have consistently supported the project. Garofalo has

said Wal-Mart’s decision to open a store here shows “confidence” in

Huntington Beach.

On the other hand, Councilmen Tom Harman, Peter Green and Dave Sullivan

opposed what Harman called “bad planning” that harms the surrounding

neighborhood.

In the end, to minimize the impact on the neighborhood, the council

placed more conditions on the project than on any other in recent

history.

Although Wal-Mart wanted the freedom to remain open 24 hours a day, the

council reduced the hours of operation to between 7 a.m. and 10 p.m. The

council also ordered a 90-foot buffer to separate the store from the

nearest home. And the council wanted delivery trucks to unload in a fully

enclosed dock area farther away from homes than originally planned.

To address concerns from Fountain Valley officials about traffic

congestion, a route was established that will have the delivery trucks

avoid their city. The nearest eight homes will receive dual-pane windows,

paid for and installed by the project’s developer, Arnel Retail Group.

With so much money at stake, Arnel has fought back. The Costa Mesa

company -- headed by real estate magnate George Argyros -- filed a

lawsuit in August challenging the validity of the petition drive that led

to Measure I.

But in October, Arnel decided to hold off on the lawsuit until the

election, but threatened to pursue it if the measure passes.

Wal-Mart hasn’t threatened any legal action, however it has spent big

money on the campaign to defeat Measure I.

BANKING ON CONTROVERSY

The plot thickened when investigations uncovered that Argyros had

invested heavily in the same local bank as did three council members who

support the project.

Garofalo, Dettloff and Julien invested $50,000, $3,000 and $10,000,

respectively, in the new bank, Pacific Liberty. Garofalo also serves on

the bank’s board of directors.

Amid charges of conflict of interest, the council trio denied knowledge

of Argyros’ reported $100,000 investment when the council voted in April

to approve Wal-Mart’s plans for a megastore.

Opponents lobbied unsuccessfully to reverse the council’s decision.

Neither the district attorney’s office nor the Orange County Grand Jury

found any wrongdoing. A report was filed with the Fair Political

Practices Commission, but the agency hasn’t released any information on

the matter.

WHAT THE SCHOOLS WILL GAIN

Ocean View officials are thrilled at the prospect of Wal-Mart leasing

their property for $400,000 a year. The district could pull in $40

million over 65 years.

They said they plan to use the money to generate matching funds for the

$27 million in state revenue the district has qualified for through

Proposition 1A, which earmarks funds for school repairs.Building a

Wal-Mart on the Crest View site is the best way to go -- plain and

simple, they said.

“We want a long-term lease because we want to retain the property,”

Tarwater said.

The Save Our Schools campaign, headed by Ocean View School District board

trustee Tracy Pellman, is spearheading the district’s push to defeat

Measure I. The passage of Measure I would be devastating to the

district’s long-term financial plans, she said.

“Land value is issue No. 1,” Tarwater said. “By leasing the Crest View

site to Wal-Mart, we don’t have to sell any of our other sites.

And added to the district’s other commercial lease -- the former Rancho

View school site at 16940 B St., where Eagle Hardware now operates -- it

would be pulling in almost $1 million a year in extra income. Tarwater

said this revenue stream would give the district steady income that could

help fund future facility repairs.

Despite the district’s arguments, Crest View United sees the city and

school district sacrificing their neighborhood.

While Pellman said she understands those concerns, the neighborhood’s

worry doesn’t outweigh the needs of the district’s 10,000 students.

Tarwater said he also puts the children first.

“While the district is always determined to be a good neighbor with the

citizens of Huntington Beach, it would not jeopardize the best interest

of its students,” he wrote in a prepared statement.

WHERE THE MONEY WOULD GO

The district’s most pressing need is at Harbour View Elementary School.

Tarwater said the district will need to put up about $460,000 to get

enough state funds to complete a $3-million project to repair and

modernize the campus.

Work includes tearing down 10 temporary classrooms plagued by dry rot,

drainage problems and leaky roofs, said Ocean View School District

Assistant Supt. Patricia Young. The portable classrooms, which are about

30 years old, will be replaced with a new wing with 10 classrooms and a

library added to the main building.

Young said College View Elementary School also needs repairs -- new

carpet, wiring and restructuring classrooms are among the priorities

there.

All of the district’s middle schools need repairs as well. Due to a

reconfiguration years ago that turned elementary schools into middle

schools, many of the middle school facilities are not adequate.

“Some of the middle schools are using gyms that were never set up to be

gyms,” Young said. “The locker rooms are also substandard.”

Young said modernizing and repairing the district’s schools could take as

long as 10 years because of resource and manpower constraints.

WHAT THE CITY WILL GAIN

Even though they ran on a slow-growth ticket, Bauer and Dettloff said

they’ve come to see the wisdom of the Wal-Mart project.

They defend their decision because of the benefits to the city from

sales tax revenue and to the school district from lease payments.

Bauer is so convinced the retailer offers the best chance to repair

school facilities that he suggested anyone who opposed the project “hates

children.” He later apologized for the comment.

It took a lot of soul searching before Dettloff made her decision, she

said. She came to the conclusion that the benefits to the entire city

outweigh the cost to the surrounding residents.

“Everything that we want and that we deserve has a price tag,” she said.

The city is revenue poor, but Wal-Mart should fix that, she said.

An analysis by Los Angeles-based Keyser Marston Associates Inc. shows the

store should generate about $400,000 annually in sales tax revenue. City

officials said Huntington Beach could use the money to help pay for

everything from police salaries to a new senior center.

Bringing Wal-Mart into town will help stem the tax dollars that are

leaking out because many residents go to other cities to spend their

money, officials said. Even though the city already has a Target and a

Kmart, officials said the Costco in Fountain Valley and the Wal-Mart in

Westminster are costing the city. And there’s the added benefit of 300

jobs the store will create.

WHAT THE OPPOSITION SAYS

Wal-Mart detractors dismiss the lease as a sweetheart deal and offer

their own financial analysis, prepared by an accountant who lives three

doors from the project site.

“I have a vested interest, obviously,” Dale Hoover said. “But the numbers

don’t add up.”

Instead of leasing, the school district could sell the property for $8

million to $12 million, he said. By investing the money now, the district

could realize a much greater profit while still capturing the state

funds, he said.

“They are crying that they need repairs, then why don’t they sell the

site and do the repairs now?” Josephson asked

Josephson, who has been locked in battle with the city and the school

district for years over the issue, said the $400,000 per year the

district will reap from the lease will not be enough for the $5.4 million

it needs to make the state match.

“If you sold the site, you would have the money needed for the match

immediately,” Josephson said. “The lease is a wish and a prayer.”

Josephson also cautioned that the deal with Wal-Mart could leave the

district high and dry if the megastore decides to pull out of the lease,

which is only guaranteed for 25 years.

“Wal-Mart could pull out of the lease in the future, and where does that

leave the district?” Josephson asked.

But Tarwater said the district doesn’t need all of the state money at one

time because it could not do all of its facility projects at one time.

The superintendent said it would be foolish for the district to seek all

of the funds at once because the district cannot bank the total for

future use.

“Once we get the state money to do a project, we only have 18 months to

complete it or the state takes it back,” Tarwater said.

In addition, Tarwater said holding onto the property could prove to be a

wise move for the district.

“This property is a gold mine,” he said. “Do you think in another 25

years there will be a piece of property this large in the area?”

WHAT OTHERS SAY

Throughout the struggle, Wal-Mart has been accused of everything from

trying to destroy a neighborhood to trying to buy an election through its

campaign contributions.

But the retailer takes the jabs in stride.

“When you are the biggest, you are an easy target,” said Wal-Mart

representative Cynthia Lin.

She added that a “very vocal minority” has stolen the limelight, while a

silent majority supports the store opening.

“I think to have a Wal-Mart in Huntington Beach is a plus,” said Kathy

Shakas, president of the upscale Estates at Seacliff Homeowners Assn.

Her family moved to the community eight years ago from South Carolina and

Texas, where the retailer’s stores “were everywhere,” she said.

“It was odd to us when we got here that there wasn’t a Wal-Mart,” she

said.

Others feel a kinship with the Crest View residents.

“Most people want their neighborhood as quiet and restful places,” said

John Scott, president of the Southeast Huntington Beach Neighborhood

Assn.

As for the local business community, Downtown merchants, while opposed to

the project, don’t feel threatened by Wal-Mart’s bargain-basement prices.

“They have cheap stuff down here already,” said Melissa Large, manager of

Clothes Minded on Main Street.

Tourists who visit the beach and end up shopping here won’t venture to

the retailer’s inland location, said Carrie Benoit, owner of Surf City

Casuals in Downtown.

“Most of them won’t even know it’s there,” she said.

THE BOND OPTION

Replacing portable classrooms with more permanent structures is one of

the district’s most pressing facilities needs -- one they hope to remedy

with state funds. But the district won’t get that state funding if it

can’t come up with $5.4 million. And Tarwater said Wal-Mart is the

district’s ticket.He said Wal-Mart would be locked into a lease with the

district that guarantees it $10 million over 25 years, whether or not

Wal-Mart turns a profit.

“For 25 years, they have to pay me no matter what happens with the

store,” Tarwater said, adding that the lease would bring the district

tens of millions of dollars in the long run versus an estimated $7.5

million if the property was sold for residential use, as Crest View

United has proposed.

And he said the property is only going to increase in value; to sell it

now would be financial foolishness.

Fresh in Tarwater’s mind is the defeat of Measure A, a bond that appeared

on the November ballot to fund facility repairs in the Huntington Beach

Union High School District.

In spite of a vigorous campaign and wide community support, the bond

failed to earn the two-thirds support it needed to win.

The loss of the $132-million bond election left the high school district

with crumbling campuses and insufficient funds to repair them.

Tarwater said the high school district’s experience and the fact that

Ocean View has a collection of closed school sites takes a bond measure

out of the running.

“It would be irresponsible for us to ask the taxpayers to finance the

district’s repairs when we have eight properties we can use to generate

funds,” Tarwater said. “We can finance our needs with commercial leases.”

IF VOTERS SAY YES ON MEASURE I

The district is banking on defeating Measure I and securing the Wal-Mart

lease. In fact, at this point, they don’t have any other options planned.

“We haven’t even discussed the possibility of losing the lease,” Tracy

Pellman said.

Pellman stressed that the district will not ask the community to support

a bond when it has so many closed school sites.

“It would have to be another board,” she said.

If the measure passes, Pellman said the board will have to get together

with parent leaders and plot the next step. She has ruled out asking for

a loan, claiming the interest rates are too high and that it would take

too long to pay back.

“I don’t have the answer, and I don’t think the board does,” Pellman

said. “It will be a very complicated process that could take years. ...

Whatever the alternative plan is, it will not be a simple fix.”

If Wal-Mart goes away, discussions about alternatives to the Wal-Mart

lease would begin immediately after the election, she said. In the

meantime, the district would use stopgap measures to repair the

facilities as it is financially able.

THE FINAL STRETCH

Leading up to Tuesday, both sides are kicking their campaigns into high

gear.

To get its message across, the Wal-Mart-friendly group, known as Save Our

Schools, will make telephone calls, walk door to door and give lectures,

Pellman said.

“We will be increasing the intensity of our phone banks in the run up to

the vote,” she said. “We also have at least 180 volunteers walking

precincts to get the vote out.”

Pellman herself is also giving a series of Measure I lectures in private

homes.

Crest View United -- which also calls itself Save Crest View -- is

sending out mailers, stuffing fliers in newspapers and posting signs

around Fountain Valley and Huntington Beach urging support for the

measure.

With the stakes high, both sides have accused the other of dirty tricks.

A majority of the council managed to tack onto the ballot an advisory

vote, known as Measure J, that asks residents if they want 50% of the

sales tax income from a Wal-Mart to be spent on a host of popular

projects, such as sports fields, bicycle trails and neighborhood parks.

Councilman Green, who opposes the retailer’s plans, dismissed the

nonbinding measure as “garbage,” meant to confuse voters.

Two can play at that game.

Wal-Mart opponents produced campaign posters that ask residents to vote

yes on both Measure I and J, even though a vote for I would eliminate the

point of J.

Incensed, Bauer said the ploy “reveals a high level of cynicism.”

No matter which way voters decide, Dettloff has one bit of advice.

“Just vote based on all the information and all the facts,” she said.