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THE BAYCITIES OBSERVER
Virginia McCullough


"Have I missed the  mark, or, like a true archer,  do I strike my mark?
Or am I a prophet of lies, a babbler from door to door?"
                                                     
Cassandra, as reported by Agamemnon

© 2000 Virginia McCullough. All Rights Reserved. Use only with written  permission. 


WHERE  IS  EMERYVILLE,  CALIFORNIA?

WHY  SHOULD  WE  CARE?

San Francisco, California - just the words bring to mind the beautiful city by the bay linked to the rest of the world by the Golden Gate and Bay bridges.  The Bay Bridge is most recently remembered because it collapsed during the last great earthquake severing its lifeline to the East Bay.  Oakland is the East Bay city that is San Francisco's alter ego, home of the infamous Oakland Raiders.

But there is another city that deserves close scrutiny by those who love intrigue and conspiracies.  The City of Emeryville, California has long been a hot bed of  politics,  prostitution, gambling and  money laundering.  From the very wealthy using HUD funds to build low income housing to purchase homes for their children to running sex slave rings for rich politicians -- Emeryville has it all!  Even the Emeryville school children are victims of the powers that be in this strange little town.  Lawsuits filed in state and federal courts document the physical and sexual abuse youngsters endure every day they go to school in Emeryville.  From medical experimentation on students to money laundering by school officials, nothing is beneath the administrators in  the Emery School District.

How do these people get away with operating like the mob?  Who protects them?  To answer these questions we turn to the script entitled "Million Dollar Mud Flats"  This thirty minute program aired on KQED, Channel 9 in the Bay Area in 1983. (This is a transcript verbatim from a television show.)

NARRATOR:        Emeryville - best known to most people in the Bay Area as the little industrial town, the big mud flats.  Wedged between Oakland and Berkeley at the eastern foot of the Bay Bridge, it is within minutes commute of San Francisco.  And now from behind this low key facade, the biggest building boom in the Bay Area has erupted.

STEVE SHADIX:   When you're talking a development program that the lowest figure is $500,000,000.00 and the highest figure is $1,000,000,000.00, it's a lot of money to change hands and that's exactly where the problem is.

NARRATOR:        The little town of Emeryville is growing up as it becomes a utopia for developers.  But for some this building boom means trouble.

LEO MACIAS:       I was threatened the other day, that my place would burn up, if I didn't get smart.

NARRATOR:        Yet for others the mud is turning into millions.

Emeryville has always had a sinister reputation.  In 1896 it incorporated in order to operate the Shellmound's race track.  During Prohibition it was known for its Speak Easys, dog racing, gambling houses and bordellos.  It was in 1928 that Earl Warren, then district attorney of Alameda County, called it the rottenest city on the pacific coast.

In the early days it was a town of stockyards and slaughter houses. Trains traveling north and south would roll through Emeryville as the bay came right up to the tracks.  In those days people spent their weekends watching the Oaks baseball team or they took the ferry boat to San Francisco.

Strong leaders kept a firm hand on this wild west town which boasted no churches, no cemeteries, no movie houses.  Family names like Emery, Doyle and Lacoste were and still are familiar to just about everyone in town.

Some things change with time.  Some things have changed very little.  High rollers still gamble thousands in the card clubs that flourish along San Pablo Avenue.

The players today are as colorful as the old timers.  Police Chief John Lacoste is a controversial figure.  According to many people, he runs this little town of fewer than four thousand people.  A staunch democrat,  Lacoste is a leading fund raiser for the Democratic Party in California, and chairman of its Northern California Finance Committee.

Steve Shadix, former undercover agent, and now a businessman in Emeryville.  He was a close friend of Lacoste and is President of the E.I.A., the Emeryville Industries Association.  E.I.A. is now battling against developers and Police Chief Lacoste.

Leo Macias is a small businessman; he has lived and worked in Emeryville for over 15 years and now he is in trouble.  Tom Weenas, the flamboyant former president of Lathrop Construction Company, is a close friend of Chief Lacoste.  Weenas and Lathrop were pioneers in developing Emeryville.  He is now accused of embezzling $3.5 million from Lathrop.  He has lost money, status and property.  Among his properties was the Townhouse.  A popular country western bar which was also known as city hall because the Police Chief used to conduct much of his business from here.

Chief John LaCoste has lived in Emeryville all of his life.  Although he is often accused of controlling city politics, he contends that everything he does is for the good of Emeryville.  On the day we went to visit Chief Lacoste, he took us for a tour of his city.

JOHN LACOSTE:    This is where we used to have the vast majority of problems.  All through San Pablo here and 36th Street.  One of the major prostitution places, like all through here and narcotics and so forth.  This entire area is the original old section of Emeryville, the fact is that the southern triangle that we're coming up to  on the left hand side which used to be almost exclusively French-Italian families.  Straight ahead is Shell Development and,  as you're probably aware, Shell is now down in Texas and, taking over that building is Cetus Corporation, a genetic engineering firm.  Of course, in genetic engineering, I'd love to clone some more Democrats.

NARRATOR:        Across the tracks are hotels, condominiums and offices.  Emeryville's development started out on this peninsula.  An area which is completely land fill.  Tom Weenas was a pioneer in bringing development to Emeryville.

TOM WEENAS:    When Lathrop Construction came to Emeryville over 15 years ago and started with a small office building, Denny's restaurant, a couple of sights like that.  They turned out rather successfully, so we felt, hey, this is a good base of operations for the company.

NARRATOR:       From Denny's and a small office complex, Weenas and Lathrop went on to develop and build Watergate.  This huge luxurious condominium was originally built as apartments.  When it was converted to condominiums, it became the largest condominium conversion in the state.  It went through the approval process in record time.  Thanks to a sympathetic City Council and a huge lobbying effort in Sacramento.

Here the affluent and the trendy live the good life, surrounded by a yacht harbor, restaurants and their very own shopping center.  Across I-80 and the railroad tracks is old Emeryville.  The strange blend of housing and industry.  It is in this area that the old timers live and it has long been the home of several trucking companies.

DUTCH HEINTZ:   The people down there more or less still call this the old Emeryville.

NARRATOR:         Dutch and Dottie Heintz have lived in East Emeryville for most of their lives.

DOTTIE HEINTZ:  Very few of the people at Watergate, very rarely come over here unless they have to, like to the Post Office or driving on through. They have a fear of over here, dogs, crime and such as that.  We don't have any stores here, we have no shopping center, we have to drive a distance or take a bus or a cab to do any decent grocery shopping.  People on this side are on, most of them are on limited incomes, and it makes it a little rough for them.

NARRATOR:        The people of East Emeryville, are for the most part, low income families, minorities and seniors.  Many of them on fixed incomes.  They are leery of  newcomers and changes, they stick together.  Dottie Heintz is active in her community, she regularly volunteers at the Senior Citizens center in their weekly bash.

But things are changing in Emeryville and the pace has began to pick up in the last few years.  Because of its proximity to San Francisco it has become a prime area for development.  Seventy-five percent of the city has been declared to be within the Redevelopment Area and now the focus of redevelopment is Area 5, located strategically along I-80, between the freeway and the railroad tracks.

This location is a prime area for developers hoping to build high rise offices, apartments and condos.  But some of the residents have serious questions about the way redevelopment is being done and the effects it is having on them.  Laura Davenport is a resident of Watergate and a City Council Member.

LAURA DAVENPORT:    The Redevelopment Area in Emeryville is probably about seventy-five percent of the city.  The only thing that's not included is the peninsula and only part of the peninsula.  I've never quite understood why the east end of the peninsula,  which has all these nice high rise office towers, behind us, is included in the Redevelopment Area?  Because a Redevelopment Area is supposed to be a blighted area.

NARRATOR:    Leo Macias owns a vending machine distributorship.  As founder of the Emeryville Neighborhood Improvement Association he was instrumental in forming the Redevelopment Agency.

LEO MACIAS:  At that time the proposed purpose was to have the Redevelopment Agency loan some money to the residents, low interest loans, to improve the homes in Emeryville.  Now, what you have is, of course, you have all this high rise development going on around here and the Redevelopment Agency has sort of drifted from its original intention, to help the residents, to helping big business now.

NARRATOR:    As redevelopment has taken off, so have property values.  Heavy industries, such as trucking and steel, are being squeezed out.  And new high tech industries are moving in.  Leo Macias is worried, his lease will expire next year and he's having trouble finding a warehouse.

LEO MACIAS:    I want a warehouse.  I want to buy a place here in Emeryville.  Well, I get real estate brokers, real estate agents from all over coming to me, showing me places in Hayward, in Oakland, in Richmond, and why?  I ask, " why".  Don't they have any place here in Emeryville that I can buy.  They said, "No, Leo, I was told that you're supposed to be out of Emeryville."

NARRATOR:    Just why is Leo Macias being pressured to leave Emeryville?

He contends that because he has openly complained, the Redevelopment Agency no longer sees him as an ally.  But Emeryville has always had a long history of battles and controversies related to development.

When Watergate was converted to condominiums by Lathrop, a battle between the residents and the developers followed.  Two City Council Members were recalled and a $93 million lawsuit was filed against Lathrop.  In the suit residents claimed faulty construction, water leaks in their apartments and that their garages are sinking.  The suit is still pending.  While president of Lathrop, Weenas went on to develop and construct other projects, including Cutter Tower and Komatsu building, which are on the peninsula right next to Watergate.  And he got into politics.  In the 1980 City Council election, Weenas,  his wife, Lathrop Construction Co., and their attorney, John Correnato, contributed over $26,000 for the election of Council Members Jim Golden and Wally Fox.  Businessman Steve Shadix also contributed to the campaign.

STEVE SHADIX:    Well, the bulk of the last campaign, and there were many contributors, including myself, but the bulk of the last campaign was done by Tom Weenas, who gave about $25,000 to the campaign, the Fox-Golden campaign.  Now that's a lot of money in a town this size.  That's the money that was perhaps, not accounted for, that slips through the cracks, as it were.

NARRATOR:      The amount of money spent to elect Council Members Fox and Golden came to nearly $40 per vote.  The most spent, per capita, on any election in the state.

TOM WEENAS:   I did contribute, I'd say by standard a considerable amount of money.  I don't see anything wrong with it.  I like the people that I was contributing to.  I liked their philosophy, I like their feelings about Emeryville as a whole.

NARRATOR:      Although Police Chief Lacoste does not contribute to City Council campaigns,  he actively supports the candidates he believes in.

JOHN LACOSTE:    I think it's important for every citizen to exercise their constitutional rights.  I think because I'm a Police Chief or a policeman that I do not have a right to voice an opinion on the political realities of my community.  I have never  campaigned as Police Chief.  I'm totally committed to this community and therefore pay attention to the facts and the issues and so, fortunately, I'm able to have the ear of some of the Council Members.  And they believe, in my overall outlook towards the city.

NARRATOR:      But controversy has followed both Lacoste and Weenas.  Until this year they were business partners in HUB Enterprises.  A small company started up to help minority owned businesses get started.  Now both Lacoste and Weenas are under Federal Grand Jury investigation for false arrest and conspiracy.  But, as controversy surrounds the Police Chief and one of its major developers, it also surrounds the city itself and several of its Council Members.

In order to improve the appearance of East Emeryville, the city established a paint program, whereby qualified residents would be able to have their homes painted, free of charge.  The Heintz's tried to get their house painted.

DUTCH HEINTZ:    They've painted a lot of the houses on this side.  I tried to get mine painted and I couldn't.  It's a conflict of interest because my wife is on the City Council, yet at the same token, Esther Spriggs is on the City Council and her mother got three of her houses painted plus $180,000 loan at three percent interest plus another $37,000 at six and three-quarter percent interest.  That's not a conflict, mother and daughter, yet man and wife, it's a conflict.  That is something I'll never understand.  I just don't understand.

NARRATOR:    Dutch Heintz is openly critical of the Redevelopment Agency and of Council Member Esther Spriggs.  Pearl Lee, Esther's mother, received over $200,000 in public low-interest loans, to rehab four homes which she and her daughter co-owned.  Because of possible violation of state laws governing conflict of interest, Spriggs transferred her interest in the homes just prior to the approval of the loans.

ESTHER SPRIGGS:   These properties did need rehabilitating `cause this particular property was terrible, even the neighbors were complaining and therefore, they said in order for it to be rehabilitated, I would have to quitclaim, and have no interest in the property. and that's what I did.

NARRATOR:    A few blocks away is one of Emeryville's newest housing projects.  Completed in 1980, Emery Bay Village is a 112 unit condominium complex, the project was designed to provide housing for low and moderate income residents of East Emeryville.  30 year mortgage loans, carried at eight and three-quarter annual interest rate, several points below market rate at the time of the sale.  The Redevelopment Agency entered into an agreement with the developer, Community Development Associates, to allow people who lived or worked in the city to purchase the condominiums at less than the market price.  The condominiums were quickly sold.  One of the buyers was Stuart Flashman.  When he bought his condominium, he was required to sign an agreement which stated that the condominium  he purchased would have to be owner occupied.  But soon after that things changed.

STUART FLASHMAN:    I bought in November, at least I signed the agreement to buy in November and, by the time I moved in, in January,  they had apparently changed things, and that agreement was no longer required.  I later asked someone about it from the Redevelopment Agency.  They said it was that they had trouble selling off the units.

NARRATOR:    We asked the Director of development, Mark Buell, if the units were difficult to sell.

MARK BUELL:  No, not at all.

NARRATOR:     How quickly did they sell?

MARK BUELL:  They were sold out by the time the project was finished.

STUART FLASHMAN:   One person who bought two condo units was John Lacoste, who's the Police Chief in Emeryville.  Other people who bought them were people who were either involved with the developers or people who were involved with the real estate company that sold the units.  Two of the wives of City Council Members bought units here.

NARRATOR:    Because of state law, Council Members were ineligible for the loan program.  Although Mayor Fox did not buy a condominium in Emery Bay Village, in 1979 he did vote to approve the loan program from which his wife and several of her relatives received $165,000, used to purchase two condominiums, and the wife and brother of Council Member Jim Golden received an $85,000 low interest loan.  In order to qualify, Golden gave up his interest in the property and he now states that his wife now makes all of the payments on the property with her own money.

STEVE SHADIX:    Well, what happened, and this is again where you run into this very sticky question.  You have members of the Council that have their relatives buy instead of them. What do you do?  The Mayor's name isn't there; Jim Golden's name isn't there on the ownership papers because their wives and relatives bought in.  But it does raise the question.  And that's the problem we have is our public officials get involved in some of the benefits.

Part of our Democratic system, and I really feel this way most sincerely, when you are elected to public office you keep your hand out of the public cookie jar.  In this city you generally find two hands dipped in, right to the hilt.

NARRATOR:    But what has happened that has turned Steve Shadix and a large segment of the community into an anti-development coalition?  This towering building, Pacific Park Plaza, has become the focal point in a war between industry and development, as has the City Council, which serves as the Board of the Redevelopment Agency.  The City Council has the power to approve or deny all proposals made by the Redevelopment Agency.  In nearly every issue involving development, the Council has split three to two.  Council Members Fox, Spriggs and Golden have voted pro development and Council Members Davenport and Heintz have voted against most development measures.

LAURA DAVENPORT:   I would like to make this very clear, I'm not against development but, we have to do it in a rational, logical way, and we have to solve the problems that are going to be created by that development, before it's developed.

NARRATOR:    In question is the relationship of Pacific Union and the Redevelopment Agency.   In a highly unusual arrangement the Emeryville Development Company Ltd. was given the authority to write the master plan for the entire Bayfront area.

MARK BUELL:  (Director of the Redevelopment Agency)  E.D.C.L. is,  for practical purposes,  Pacific Union and they have acquired seventy percent of the developable sites in the area.  They came to us for a permit to build a high-rise commercial development on a piece of property.

STEVE SHADIX:   These people have entered into an agreement with the Redevelopment Agency to do the Redevelopment Plan for the Bayfront.  This leaves the business community out in left field because we have no input.

NARRATOR:    Industries'  greatest fear is that with this new plan, they will be driven out of the Bayfront completely.  Property owners in Section 5 are concerned too.  Since they were NOT  consulted as the plan was being developed.  They fear their property may not receive the same consideration as that owned by Pacific Union.

The Redevelopment plan submitted by E.D.C.L. was approved August 2, 1983.  On the boards are plans for two 24-story towers, adjacent to Pacific Park Plaza  (Marketplace property).  A shopping and commercial area and several other high-rises.  This will create over three million square feet of new office space, double the amount of daytime traffic and more than double the population of  Emeryville which is now 3,400.

Shadix and the E.I.A. blame the city for being too soft on the developers, but developer Bill Tunney, partner and project manager for Pacific Park Plaza, is pleased with the treatment his project has received.

BILL TUNNEY (Pacific Union Co.):   The development process in Emeryville is one that encourages development.  In contrast, many other cities have processes that discourage development and perhaps Emeryville will get to be that way someday, but at this point in time, it's a perfect marriage between a city that wants to develop and a developer that wants to be here.

MARK BUELL:    No question about it, we are working hand and glove.  And it's my job to bring business to Emeryville.  It's my job to get things developed in accordance with the policies the City Council has, and any developer that's been here will tell you they work very closely and in close cooperation with us, and we are proud of it.

NARRATOR:    Just how closely the Redevelopment Agency works with developers is brought to question by Council Member Davenport.

LAURA DAVENPORT:    The attorney that represented the developer, Pacific Union Co., was also the attorney for the Redevelopment Agency, Goldfarb Owens and Tom Owens was their attorney.  Nobody let us know that, nobody knew that.  The only reason we found out is because I was elected.  In going through the  check register which the City Council gets, I saw this name being paid from the Redevelopment Agency, being paid out of city funds.

NARRATOR:    Redevelopment Director Mark Buell, denies any wrong doing by the city, or Tom Owens, also a partner in Pacific Park Plaza.  But the Redevelopment Agency soon changed attorneys.

STEVE SHADIX:    When you're talking a development program that the lowest figure is $500,000,000.00 and the highest figure is $1,000,000,000.00 it's a lot of money to change hands and that's exactly where the problem is.

NARRATOR:    Whatever the outcome, the E.D.C.L. Plan and Pacific Park Plaza will continue to fuel the development controversy.  In recent weeks political activity has accelerated drastically all over Emeryville.  On November  8 [1983], the city will be voting on the fate of the three council seats now occupied by members Davenport, Heintz and Spriggs.  Two new newspapers have recently appeared, The Guardian and The Eagle, each backing issues and candidates which they favor.  The Guardian favors the Emeryville Industries Association while The Eagle seems to favor the philosophy and views of Police Chief Lacoste and the developers.  In our first interview with Leo Macias, he alleged that he had been approached by the publisher of The Eagle to take out an ad in the paper.  It was suggested that if he did not take out the ad, he would have to pull his vending machine out of the Silks. a nightclub owned by Chuck Ramos, publisher of The Eagle.  A few days later, he had again been approached about taking out an ad, so our producer interviewed him once again.  Who was the person who told you about taking out an ad in The Eagle, I assume.

LEO MACIAS:    The owner, Chuck Ramos came in and solicited me.  He asked me to put an ad in the paper and I told him I did know enough about the paper at that time to make a rational decision.

NARRATOR:    Did anyone else approach you on this matter?

LEO MACIAS:   Jim Golden asked me to consider, just mainly consider, placing an ad in that paper and I told him, I just didn't think we were gonna get the kind of exposure, the kind of coverage that was going to be conducive for us to bring in more business.

NARRATOR:    Well, what happened after that?

LEO MACIAS:   Well, after that, maybe a couple of days later, days later I get a telephone call on the phone and it was to the effect, "Get smart Leo", and put an ad in the paper or else you might come to work one day and find it all burned up.  I've been here for seven years and that's never happened to me.  I've been in other businesses for nine or ten years, but certainly that's never happened to me.  I've never been threatened in that manner before.

NARRATOR:    Are you convinced that this threat was linked somehow to your wanting to take out an ad or not wanting to take out an ad in The Eagle.

LEO MACIAS:  Well, it certainly implied, I mean, get smart Leo and take out an ad.  Certainly that's an implication that I should take out an ad in the paper, a paper anyway, and I think because we were talking about the Eagle, that perhaps maybe that was the paper that they were referring to.

NARRATOR:    We tried to reach Chuck Ramos for a comment on the allegations made by Leo Macias.  As of the day we edited this piece, Ramos had not returned our phone calls.  But we were able to get an interview with Council Member Golden.  What is your connection to The Eagle, the newspaper?

JIM GOLDEN:    I have no connection to it.

NARRATOR:     You have none what-so-ever?

JIM GOLDEN:    None what-so-ever.

NARRATOR:      You're not an advisor of any sort?

JIM GOLDEN:     No.

NARRATOR:       I'm wondering, we recently talked to a person that you know, a guy named Leo Macias.

JIM GOLDEN:     I know Leo.  He's a businessman here in town.

NARRATOR:      Leo advised us that you were in his office and that you actually told him, and pressured him................

JIM GOLDEN:    I'm sorry, that's just not true.  Leo and I have known each other for a long time and we were just kidding around.  That's all we were doing.  There was absolutely no pressure.  Leo indicated that he was just going to stay neutral in the upcoming election and I told him that was just fine with me and if he intimated anything else, it's just not true.

NARRATOR:     You didn't in any way pressure him?

JIM GOLDEN:    No.

NARRATOR:     Maybe you can answer this.  Has anyone else involved with The Eagle, to your knowledge, pressured Leo Macias?

JIM GOLDEN:    I don't think so.  [shaking] Can we stop for a minute?

STEVE SHADIX:    It's a very ugly thing that's going on here and it's very hard.  When the average person, businessman or citizen opens their mouth, they're dealing with an establishment and an organization immediately going after them.  And it's very hard to deal with when you get into this position.

NARRATOR:    On September 6 [1983],  we attended a City Council meeting.  At that meeting Stuart Flashman and a group of citizens presented to the Council petitions calling for a referendum on the Redevelopment Plan.  The Council met on this issue behind closed doors.  The referendum is now on the ballot for a special election to be held December 27, 1983.  At this same meeting,  another group of citizens submitted a petition calling for the recall of Council Members Fox and Golden.

Just what the future of high rise development in Emeryville will be is anybody's guess.  But one thing is certain, up until September [1983], Tom Weenas, although pleading poverty, still held a considerable financial interest in the Pacific Park Plaza.  As the November 8th [1983], Council election nears, the factions have split.  Heintz and Davenport are on different tickets.  John Lacoste is busy campaigning for Esther Spriggs.  The outcome of the city election, the recall and the referendum will have some impact, but it seems that the free wheeling wild west nature of Emeryville will change very little.

                 End of transcript of Million Dollar Mud Flats.

The free wheeling wild west nature invades every facet of life for these citizens of Emeryville.  Constant turmoil and scandal forced out long time Police Chief John Lacoste and sources say he now has a company that sells uniforms to police departments throughout the state.  New allegations of fraud  involving the funding for the Emeryville Redevelopment Agency and its allegiance to Interbank have been made.  Several of the Council Members mentioned in the script have retired from public life.  However, it appears that the those who control the elected puppets in positions of power are still pulling their strings.

Emeryville is never far from the headlines and it always involves a newly breaking scandal.  On Friday, July 13, 2001 the former superintendent of the Emery Unified School District, J.L. Handy, pleaded innocent to charges of embezzlement involving his alleged misuse of over $60,000.  The school district is over $2 million in debt and is facing a state takeover.  Should this happen, it will not be the first time.  Similar problems were experienced in 1991 when a great deal of money disappeared from the district.  Both times the State of California and its taxpayers rushed to rescue.

One has to wonder if we are paying off the same people that ripped off the city itself.

by Virginia McCullough © 2001