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DISNEY'S SAN FRANCISCO-TO- NAPA CONNECTIONS

From the Waterfront -- Disney’s San Francisco-to- Napa Connections 

The months of June - October were “let’s expose Montalcino Resort” months in Napa. That resort scheme, in part on the docket before Napa County Supervisors January 15, was largely financed by Hong Kong Tycoon (with a capital T) Geoffrey Yeh. Earliest articles revealed Yeh is a paired partner with Walt Disney Corp. and Hyatt Hotels. Yeh helped clear the way for Disney in Hong Kong. His Hsin Chong Construction (Hsin Chong Group) features itself as a builder of theme parks, among other fetes, but that comes later for Disney. The Yeh family’s first endeavor for Disney was to help push through construction of the new international airport in Hong Kong so that Disney can bring throngs to its planned Disneyland Hong Kong at Pearl Bay in Lantau. The airport is finished, all set, and Disneyland is scheduled to open in 2006.

Yeh, not surprisingly, won the award to build the airport’s passenger terminal .... and has served Disney’s other paired partner, Hyatt Hotels. While HCV Napa Associates’ Randall Verrue asserts there is no relationship between their Hyatt Regency Sacramento or Hyatt in the Montalcino project, other sources say there is. In fact, records from the Secretary of State filed in 1998 show that Verrue had to get the consent of the LLC that controls the Hyatt Regency in order to establish HCV Napa Associates LLC (the Use Permit applicant for the Montalcino project). There’s a tie-in of some sort.

As we prowled through records to learn more about what underlies the Carneros scheme, on November 7 we revealed meetings of San Francisco Mayor Willie Brown with Walt Disney Corp. executives as Judge William Newsom’s son, Gavin, whisked the would-be mayor off to a fund-raiser he sponsored for Willie. Furthermore, we learned that Judge Newsom is an investor in the Carneros Inn project -- one in which the actual intent of investors has remained secreted from the public. That intent is to remove local residents and their affordable housing in favor of tourist cottages, a lodge, retail space, high-end homes , and a new town. What is more surprising is that Judge Newsom has been a member of the Sierra Club for years which is supporting legislation to “end urban sprawl” (AB680). He was a lightning rod in forming an interest group to stop development at Lake Tahoe. But somehow in Napa he’s gotten himself mixed up in a gentrification program to serve tourists, displace locals and affordable housing, and create urban sprawl.

For those not familiar with the project histories, please go to past articles on Montalcino Resort at Click. and Click. The first article on Carneros Inn is available at Click..

We want to make it very clear that members of the Planning Commission were told by developer Keith Rogal that the first project included 24 mobile home sites, 96 RV/portable cottage sites and a 45-seat restaurant. This is the use permit that was approved October, 2000, while his ownership of adjoining parcels was kept secret. Go to the architect’s website and what one finds instead is a "24 homes for sale" deal slated for part of this site, resort cottages for the balance and of course more restaurants, retail space, spa, hotel, other buildings for the other parcels (Click.).  Tossed into the Use Permit application is a post office and town center.

The most shocking of the November 7 revelations: The Use Permit applicant in both phases of Carneros Inn is Carneros Partners, Inc., a corporation that doesn’t exist.  Such are the representations of the Secretary of State.  So here we are, two approvals for an entity that exists only in fantasyland. Surely this would cause rejection of the applications in their current form on their face.

Surely Judge Newsom would realize his investment was in Carneros Inn LLC, so why didn’t he question the name Carneros Partners, Inc. on the applications and staff reports when he attended the August 1 hearing? Judge Newsom, retired from the Court of Appeals in 1995, is a private judge and was recently appointed by Gov. Davis to the state Parks & Recreation Commission, while he wants to turn our natural agricultural parks into urban sprawl for personal gain?

On November 7 we also addressed the bravado if not audacity, of developer Rogal to continue his practice of procuring financing and creating more LLCs while knowing the project has been appealed.  On September 9, he formed the new Carneros Inn LLC (after changing the old to Carneros Partners LLC) and Carneros Courtyard Homes LLC to facilitate his home sales evidently. 
 
Rogal continued the practice of tipping his hand that he sees this as a done deal, because of the political connections and a secreted agreement involving certain members of the Board of Supervisors -- on October 25 he created the following:
 
LP/LLC
CARNEROS HOLDINGS, LLC
Number: 200130010093 Date Filed: 10/25/2001 Status: active
Jurisdiction: CALIFORNIA
Principal Address
5 THIRD STREET, STE 700
SAN FRANCISCO, CA 94103
Agent for Service of Process
KEITH ROGAL
5 THIRD STREET, STE 700
SAN FRANCISCO, CA 94103
 
and:
 
LP/LLC
CARNEROS LODGE, LLC
Number: 200130010090 Date Filed: 10/25/2001 Status: active
Jurisdiction: CALIFORNIA
Principal Address
5 THIRD ST, STE 700
SAN FRANCISCO, CA 94103
Agent for Service of Process
KEITH ROGAL
5 THIRD ST, STE 700
SAN FRANCISCO, CA 94103
 
If any of the investors are from out-of-state, or solicitations have been made out of state for a project that hasn't been approved at the local level, there may be serious questions posed by the Securities & Exchange Commission.

All of the political connections in this deal make it a powerful project to buck. First, the Newsom duo is close to Mayor Willie Brown. By early 1997, Mayor Brown appointed Judge Newsom’s son, Gavin, to the San Francisco Board of Supervisors, while since at least 1995 Gavin had been engaged in fund-raising for Willie. This is fairly routine, not the real mess. That comes later.

Gavin Newsom filled a seat vacated by Kevin Shelley who trotted off to the state assembly. Kevin in turn sponsored AB1389, a bill that gives a green light for the development of offices, retail shops and restaurants at Piers 30-32 in the City. Two commissions that regulate bay front development projects questioned the legality of devoting 400,000 square feet to these uses, so an end-run was made with Shelley’s legislation. Governor Davis signed the bill October 4, approving development, noting funds generated from private operations would be essential to contribute to the $300 million price-tag for the cruise ship piers and terminals (Click.).

Of course we come full circle with Disney and Mayor Willie, for Walt Disney Corp. plans to run cruise ships to piers 30-32 and the Mayor first announced his “vision” of a cruise ship terminal following his support from Disney executives. As lame duck Senate Pro Tem, Willie Brown promised the sky to Walt Disney Corp. in their hour of need -- about $30 million for a freeway exchange in Anaheim. The current Mayor Willie deal for the cruise ship terminal would represent a mere 10-fold increase in tax-payer dollars, $300 million before over-runs and change orders. San Franciscans are already grateful not to be paying $100 million for a ballpark touted by Mayor Willie fbo Eddie DeBartolo when he controlled the San Francisco ‘49ers.

Of the cruise ship terminal and attendant low-wage commercial and retail ventures, Matt Needham of Portside Neighborhood Committee lamented “There’s so much power behind (the project), they’re forgetting to look at the impact to people who actually live in the city.” (Click.).

While Napa has had land use codes that are protective of agriculture, watershed, and open space, San Franciscans have been attempting to pass their own slow-growth initiatives to relieve the city of many stresses and expenses geared to serving non-residents. Proposition L on last November’s ballot was a slow-growth measure that lost only when the final count on absentee ballots was made. Mayor Willie vehemently opposed the Proposition, and introduced one of his own to confuse the issues (Click.,). So many questions have arisen about how ballots and elections are handled that the City Attorney and others have consistently called for reviews.

Proposition L’s Calvin Welch commented “It now moves to the Board of Supervisors races, where from my count there are six Prop. L candidates in runoffs against (Willie Brown’s) six anti-Prop L candidates.” (Click.). It’s a bit obvious that Judge Newsom’s son is one of those six “anti-slow growth” supervisors who barely retained his seat. Yet here we are in Napa, with successfully passed slow-growth initiatives and protective codes. The emphasis: projects have to serve resident needs and cannot be growth inducing; development cannot interfere with agriculture. So why have our resources been absorbed challenging four huge resort projects in 2001 alone?

Napa’s own Mike Thompson, who reputedly tipped Judge Newsom off to some land in Napa, cut his teeth on a staff position with Willie Brown before moving to the state assembly, senate, and now the U.S. House of Representatives. He knows all of the players, where to focus his time, and how to get things done.  But did Thompson tip off Newsom?  Hard to say.  By October 6, 1997 developer Rogal had obtained an order from the bankruptcy court signed by Judge Alan Jaroslovsky directing the sale of the Zopfi property to Keith Rogal and Associates or  assignees (Case No. 96-10149).  By January, 1998, numerous complaints were filed about inadequate and mal-colored water and other issues, including electrical problems. A lawsuit was filed against the owners a month later, who then closed the sale to Rogal's Carneros Inn LLC  April 2, 1998.  The lawsuit was settled and dismissed in May 1999.  Tenants cleared out as Rogal made no improvements or otherwise gave those who wanted to stay the boot.  After all, he went forward in his Use Permit with the County for approval of 24 mobile homes.

Napa County is in the midst of a large flood-control project.  In the process, a number of affordable homes or mobile home spaces have been condemned, residents fully displaced, while Rogal has been sitting on an approved use permit for mobile home spaces since October 2000.  The above is little more than a private preference, a process that happens to coincide with a necessary government displacement that Rogal chose not to accommodate.

NSD (Napa Sanitation District) manager Mike Alexander and a compliant NSD board slipped into the glove with developer Randall Verrue in the Montalcino deal. They colluded in a rigged minimum-bid-price-lease deal to give a farmer the boot from 306 acres of land eyed for a golf course. And Supervisor Mark Luce was a facilitator. But this was exposed, and their efforts backfired, costing them the golf course aspect of the project and likely costing Luce his career in politics.

Do things look better for Judge Newsom’s Carneros Inn project? Indeed, they look worse. There was  egregious conduct by Rogal, of which Congressman Thompson is likely unaware, some tenants allegedly induced to leave or complain, creating such a nightmare for others they had to move from the 16-acre parcel.  Fourteen of twenty-six mobile home owners complained, the others apparently wanted to stay. With the litigation, the properties slipped into the hands of Rogal’s investors who are set to permanently displace affordable housing in favor of what appears to be a gentrification scheme of “streets for only the right people” (Click.).

On November 8, we learned from “The St. Helena Star” coverage of Carneros Inn by John Speck that it was Rogal who hired and paid for a water geologist’s report by John Slade. The report was found to be deficient in important areas by the Public Works Department. Yet the September 3, 1999 Public Works memo critical of the Slade report wasn’t included in materials provided to members of the Planning Commission. Instead, Rogal and Slade both reported more than adequate water for the projects. And Planning Commissioner David Graves asserts he saw the September 3 memo, yet he fully believes there is adequate water despite the facts. Rogal continued to assert there would be 24 mobile homes and 96 RV sites, with a connotation of seasonal use built into the scheme which surely would have resulted in under-stated water usage. What did Slade know about the new housing and cottage plan and was this built into his plan assuming more year-around than seasonal residence?

Seems pretty clear that Rogal believes there is a done deal to carve up the Carneros and let the town proceed (despite the General Plan and land use laws that bar same), a scheme further devised to obfuscate facts from the Planning Commission so they would approve the project substantially unwittingly. Then, it would be off to the Board of Supervisors for an anticipated rubber stamp.  Essentially, a mockery has been made of the approval process and as in the Montalcino project, information critical of the project had been purposely withheld. And such a vision also conforms to that of Attorney General Bill Lockyer and Wine Institute President John DeLuca who December 8, 2000 advocated moving the grape-growing up to Washington state so homes can be built throughout the Bay Area. Looks like a sweep for some politicians and the homebuilders lobby.

Indeed, just how are these tricks being managed? As Supervisor Rippey commented June 26 at the scheduled appeal of the Montalcino project, “why are only 15 minutes allowed on the agenda for this appeal? In the past we have provided days to hear appeals.” Why didn’t the September 3, 1999 memo from Public Works find its way to decision-makers in the Carneros matter? Why were significant memos in the Montalcino case omitted from records?  Indeed, there have been personnel changes along the way and now the many flaws and omissions noted in Environmental Impact Reports likely won't be glossed over.

Perhaps Judge Newsom can figure out what’s going on. If his son Gavin is an investor, likely he wouldn’t have time to help. It seems Supervisor Gavin C. Newsom may be distracted owing to disputes about finances and a state Alcoholic Beverage Control tied house deal (Villa Encinal Partnership; as Gavin C. Newsome in ABC records) and his own voting record. His plate may be full as he defends his pro-development position in San Francisco such that he can’t get involved in his father’s virtual legacy in Napa.

Going back to the partially nixed Montalcino Resort (truncated of its golf course with 306 acres that touches on Napa River), could this have had something to do with a plan to build a marina and dock in the future, say for ferries from San Francisco to transport tourists from Walt Disney’s cruise ships? Disney has had its eye on cruising into ports along the west coast and bringing its own form of private interest regional planning to the San Francisco Bay Area. One wonders if some of the 400,000 square feet of commercial/retail development will re-create San Francisco’s gold rush and Barbary Coast days ala Disney.

HCV Pacific Partners just acquired a resort with marina at Port Ludlow on the scenic Olympic Peninsula as though expecting heightened future tourist activity from cruise ships. There 1,300 forested acres are at risk.

Disney garnered a U.S. Department of Interior contract to train park personnel in how to work with the public. Could it be that Disney also has a state contract through the Parks & Recreation Commission? That wouldn’t look good with Judge Newsom on the Commission. Just a couple of weeks ago, Michael Eisner made facilities at Disneyland available to Gov. Davis for a meeting to discuss the state of the economy, and ways to bail out the travel, tourism and entertainment industries, among other issues. That looks even worse, in view of Federal probes into Walt Disney Corp. and its former controllers, the Bass Brothers.

Perhaps Judge Newsom will be able to negotiate a development rights buy-out with the county of Napa so that atonement may be made and our General Plan, hence our county, can be left less disturbed, with the lowest of low-keyed commercial use in tact and return of affordable housing.   Maybe someone should run up a flag at Morrison & Foerster -- they represent Geoffrey Yeh in his main investment vehicle, PacVenture Developments, Inc., and also Keith Rogal’s bunch, which may or may not be a coincidence. Rogal was rather vocal at the outset that Morrison & Foerster put the deal together and he was hired to get the job done, while every effort was made to secret Geoffrey Yeh’s involvement in several other proposed resorts.  Rogal has been less than forthright about the years he has been involved with the Zopfi property, and acquiring contiguous land.

Online Asia mainstream press offers tidbits on Geoffrey Yeh, the founder of the Hong Kong Futures Exchange, at one time chairman of its board, and significant stockholder; that is until the Asian crisis hit and everything that could go wrong did go wrong. Yeh’s exchange was merged into the Hong Kong Exchange by late 1999, and Yeh now holds no stock in the exchange and doesn't serve on the Board of Directors. Yet he appears to have tremendous personal wealth that flows from banks in Hong Kong, London, Italy and France, via his lead investment vehicle, Hsin Chong International, Ltd., a Bermuda corporation.

There will be more news as discoveries unfold, and fuel hits the fan with the Carneros Inn project. If it takes a scandal to tone down scheming, rogue developers, a scandal they may get. The question is whether it will be before, during or after the Jan. 22 hearing. It will be most interesting to see if pro-development, anti-General Plan/Napa codes Supervisors Mark Luce and Bill Dodd make sales pitches for Carneros Inn. Despite instruction from counsel and planning that Montalcino Resort had to be rejected, they angled a way to keep aspects of the project alive at least until Jan. 15. We can see it now, “Dodd and Luce vote to gentrify Napa, boot out residents, nix affordable housing, create a new town, and interfere with farming in Carneros”. As Napans see it, this is another of those King George III routines that shouldn't fly based on local, state and case law, while campaign finance reform advocates gain more reason to press forward.


 

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