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FISHY DEAL OF THE CENTURY TO BUILD OUT NAPA COUNTY....

Here comes the fishy deal of the century, one designed to build out Napa County.  And Last Tuesday's Napa County Board of Supervisors meeting was an excellent forum to both illuminate local deals and flush out some of the poop -- soon to go down the drain and cycle back to NSD (Napa Sanitation District).
 
The Board of Supervisors looked as though it had been struck by lightning at last Tuesday's meeting when confronted with new information -- until three of its members decided to get down and get dirty when caught by surprise.
 
As though unaware the proposed Montalcino Resort could be controversial (beyond the fact that appeals had been filed), the Dodd-Luce-Varrelman trio rushed to vote on the project and close the deal.  They generously allowed 15 minutes for 3 appellants and the public to speak, according to their agenda (9:45 a.m. to 10:00 a.m.) -- on an issue that would slam out farming and change the entire county. It was Chairman Mike Rippey who commented on how unusual it was to provide only 15 minutes for an appeal to be heard.  "Normally we allow a whole day.  I don't understand."
 
Opponents of the Montalcino Resort project received 5 six-inch binders containing more than 2,000 pages of materials -- just four days before the hearing.  Because Napa County had delayed signing a release from conflict of interest, Appellant Napa County Farm Bureau couldn't retain its counsel until the morning of the hearing.  
 
It would seem logical, therefore, that the Board of Supervisors would continue the hearing. After all, there are rights to due process before a quasi-judicial panel, they were advised. 
 
Even the developer requested a continuance. 
 
But the Board of Supervisors was determined to deny the six requests made for continuance, and give a green light to hear the matter.  Rejecting appeals for continuance, the Board opened the meeting consistently advising those present that everyone already knows this issue inside and out.  But did they?  If they had, the Board would have needed to rent an auditorium.
 
Hidden names, hidden agendas, hidden new policies, and hidden county documents began to fly out of the woodworks.
 
The names of the real owners are hidden beneath layers of shells, the public is not aware of the fact that a change in the General Plan was afoot related to the project, and speakers argued the Board owes a duty to its electorate to "stop the barbarians at the gate" and protect its citizens and their mandates on land use. 
 
The Board of Supervisor's agenda contained a simple description of the project as HCV Napa Associates.  Preceding that was a simple description to change the General Plan, through amendment, of a parcel of NSD land from PI (Public Institution) to AWOS (Agricultural-Watershed Open Space), a request initiated by NSD. 
 
And look at the suspicious timing:  On March 26, 1996 voters rejected a development scheme of affiliated parties for a project across the highway -- Suscol Ridge.  The vote was 84% against this development.  So, three days later, NSD, long familiar with all of the developers in the area, advanced a plan to have 306 acres of its properties rezoned from PI to AWOS -- exactly the opposite of voter mandate.  The Board of Supervisors was the lead endorser of the "No on Suscol Ridge" project yet its aberrant step-child, NSD, formally requested amendment of the General Plan on March 29, 1996.  How's that for opening a back door to development across the road -- flying in the face of the mandates of the electorate and attempting to corrupt the law, with a hotel project already on the docket for development on land zoned industrial.  Why make land unavailable to public agencies, when they are so desperately short?
 
Indeed, the public had no knowledge of the real money behind the project, nor the links of HCV Pacific Partners to the likes of Pacific Union Investment Co. and its principals, to WIG (Western Industrial Group), to Benchmark Hospitality or other substantial development interests in the county -- particularly not Montalcino's opponents until just weeks before the June 26 hearing. (See http://www.hotel-online.com/Neo/News/PressReleases1999_2nd/Apr99_BenchmarkThree.html that confirms some of the players have been at this for more than 10 years -- and note, the article appeared April 2, 1999 online.)
 
As the Board proceeded to open the hearing, and moved to rush speakers along, it became even more apparent they were stacked at least 3 of 5 in favor of the project. 
 
At the outset Supervisor Mark Luce was asked to recuse.  He sits on the board of NSD  which not only advanced the General Plan Amendment, but extended a long-term lease to the developer, according to the April 18, 2001 Planning Staff Report to the Planning Commission.  County Counsel Robert Westmeyer stood firm in finding there is no conflict of interest because the County laws mandated he serve on the board of NSD. The opposition pointed out that the NSD had erred in extending a lease to the developer while the designation of the land was PI (public institution) which bars the land from being developed into a resort/golf course.  
 
To blunt the criticism, Mike Alexander, Manager of Napa Sanitation District, told a bold-faced lie.  He said there was no long-term lease, delivering an impression that no "co-partnership with private enterprise between government agency NSD and HCV Napa Associates" existed. He stated "(there was) just an option about two years ago."  
 
Westmeyer again returned a finding there is no conflict  - although Westmeyer proferred "if they appear rational."  People are still trying to figure out what this means.  And rational indeed, three were not, evidenced in their behavior toward speakers -- not listening, running off at the mouth, and casting aspersions at project challengers were Mark Luce, Bill Dodd and Mel Varrelman.
 
In a fitting response, one speaker noted that Mark Luce, an employee of Chevron, spent the past weekend in Chicago while Luce asserts he lugged along the huge binders and read through all of the materials on his flight. Prior to the commencement of the meeting, he chirped that the trip was for business purposes, and to save the company money he flew Southwest to Los Angeles, and picked up an American flight in Los Angeles to Chicago.  He rambled along in conversation with Randall Lerrue (HCV Pacific Partners) and Supervisor Bill Dodd some 15 minutes before the meeting was opened at 9:00 a.m. and until known opponents of the project appeared. Lerrue entered sporting a golf umbrella, saying "well, this is it."
 
As the meeting proceeded, it was revealed that the developer advertises at their website that this is Hyatt Montalcino (http://www.hcvpartners.com/resorts/resorts.html, then use the right arrow to the edge of the screen).   Not only that, HCV has filed documents in the State of California showing its business address as 200 W. Madison St., Chicago, and calls placed verified this is Hyatt Corporation's headquarters and they are associated with both HCV and HVC. HVC also uses the same Chicago address as its place of business in records available from the Secretary of State, CA as we advised in a June 10 edition of NewsMakingNews. 
 
Hyatt's associated themes and pairing with Disney was laid out clearly in a chronology and exhibits. Hyatt's choice of quaint European towns -- Hyatt Regency Alicante in Anaheim -- while this is Hyatt's Montalcino in Napa.  Contained in a chronology is revelation after revelation of coincidences occurring in 1998 involving Hyatt, Disney, HCV Pacific Partners and HCV Napa Associates.  The timing couldn't be more perfect to suggest relationships.  Yet the front for Montalcino, Randall Lerrue, stood up and said they had no association with Hyatt on this project.  As if the Board of Supervisors couldn't read the exhibit printed from HCV's website.  In a "see no evil, read no evil" manner, Dodd, Luce and Varrelman ignored the exhibits printed from the developer's website.  Are they fair and impartial?  Is this rational behavior?
 
Not only was the pairing revealed, so too was the developer's assertion printed at the website -- that this is a done deal. In fact, HCV Pacific Partners reports "construction commenced in 2000 with the grand opening in 2002" (http://www.hcvpartners.com/resorts/montalcino.htm).   At the hearing, even Planning Staff indicated the project has not been on the table that long, rather since 1998.  Could this be because the Planning staff adopted new policies of which the public was not aware -- that golf and fee-paying recreational facilities are an allowable use on AWOS-designated land?  And was that ever false and known to be false by Planning.  It wouldn't be surprising if Benchmark Hospitality with its Houston associations with developer Gerald D. Hines (reputedly behind the rejected Richland Interests Suscol Ridge project) finds a way to break its link to the April 2, 1999 news article above to cover its tracks.
 
It was clearly established that these developers are liars, or Napa Sanitation District is lying, or both; and that the Planning Department is up to their eyeballs in trying to explain away their role. 
 
Farm Bureau and Grape Growers hit the decks, pointing out that a requested change in land use designation from Public Institution to Agriculture-Watershed or AWOS with the approval of this Montalcino request would open the floodgates to development, as associations of these developers to others controlling thousands of acres of land in Napa County were traced through public records.
 
A member of the public, after viewing the documents served on the Board of Supervisors, commented to the Board.  "I think it is time that you ask for information to show just how many thousands of acres of land are at risk of development if you change the GPA and approve this resort.  This does in fact affect the entire county."  Indeed, it alters the scope of the EIR (environmental impact report).
 
Speakers pointed out the need for land designated PI for other county needs, and how expensive and or unavailable it would be were the county to acquire land in the future.  Even the Humane Society must relocate because of the removal of levees to open the flood plain, and the need is urgent.  And where are they to go?  One supervisor stated he had been checking around for other land near the City and there might be something available -- then confessed "but there isn't anything really on the table and we would have to have a hearing and see if neighbors agree if we got some property."  There wouldn't be an issue if the NSD land remains PI and the lease is appropriately broken with this developer where the deal smells of inducements doled out for years.
 
A speaker presented the Board with a history of its own votes upholding land use laws.  In fact they were shown their own endorsements in opposition to other golf course and resort developments in land designated Agricultural Preserve and Watershed.  In ballot measure after ballot measure, developers have appealed their projects to the public to be resoundingly rejected, after first being rejected by the Board of Supervisors.  Suscol Ridge, a development slated just across the highway at Napa's southern gateway, was rejected by 84% of those voting.  This was followed by rejection of Last Resort, an appeal to re-develop, and expand, an existing historic resort. This was followed by rejection of two ballot measures that sought increased hotel taxes to finance the cost of acquiring Agricultural-Watershed land to be used for playing fields and other recreational facilities.  While not a single dollar of taxpayers' money would have been used, voters shot down both measures because they don't want development of playing fields and recreational sites in AWOS land.
 
The Board was reminded that several months ago the City of Napa rejected a hotel development project at its northern gateway to the City of Napa, and that this Montalcino Resort is the southern gateway not only to Napa but to the entire county.  What would voters say about this project? The answer is an obvious "No way."
 
The stage is set.  A vote by any member of the Board of Supervisors to re-designate the NSD land as AWOS would clearly be irrational.
 
Thus far it appears that 84% of those who voted "no" on Suscol Ridge have the ears of 2 supervisors, while 16% of those who voted yes are represented by 3 supervisors. So much for rational behavior and representative government. 
 
Clearly something's up with supervisors Dodd, Luce and Varrelman.  Varrelman, indeed, led all of the past crusades against development, yet mocked opponents of the project Tuesday.  It is well known that he has been quite sick, as has his wife, for more than a year.  Could this be clouding his judgment, leading to irrational conduct?
 
The Board attempted to separate into two issues NSD's requested amendment of the General Plan from the resort's request for a use permit.  But the two are wed at the hip.  If the General Plan Amendment to change the land use designation from Public Institution to AWOS were to pass, in practice the GPA would virtually automatically trigger legalization of the lease and shoe in the use permit requested. 
 
Remember, Mike Alexander of NSD lied.  NSD, for whatever reason, did in fact sign a long-term lease of this property with HCV Pacific Partners for the development of a golf course.  Here is where the fishy deals originate that merit a thorough investigation, as well as within the units that added recreational uses to an otherwise well-defined General Plan, activities that run 1996 through 1999. 
 
Talk about the cart before the horse being used to extort the county and to set a precedent never permitted since the General Plan was adopted in 1986. Then here comes Disney's coveted Historyland Theme Park, replacing higher payrolls with minimum wage, just like this Montalcino project.  The resort itself would be on industrial land, and Farm Bureau pointed out the need for use of this land to accommodate wine industry related business.  Disney and resort workers are not earning the $10-12 per hour earned by our farm workers, nor the $9 per hour plus of entry level cellar workers, let alone the higher incomes attendant to supervisors, farm managers, industrial businesses, etc.
 
The Planning Department was taken to task by a representative of the Airline Pilots Association with years of experience in guiding communities with respect to developments near public airports.  He clearly pointed out two problems:  (1) this type of project isn't allowed under the flight-way of Napa Airport by the FAA, and to approve it could cause the county to lose federal funds (2) the board that approved the plans at a lower level is totally conflicted -- it consists of members of the Planning Department staff who, in Napa, view their ability to exist as hinged upon development -- and the more building the better, despite land use laws.  The conflict becomes even more clear from a review of Planning Staff records in which the project was consistently endorsed for approval by Planning Staff member Mike Miller, also a big supporter of industrial uses in the Agricultural Preserve where he's had to be collared in the past -- favors extended to former executives of Walt Disney Corp.
 
While NSD, Planning, and other departments have been unable to provide the public with copies of the long-term lease, we've uncovered a January 12, 2000 agenda from Napa Sanitation District referring to the long-term lease for a golf course.  Indeed, assessor's records indicate it was signed 4/1/99 -- with a fair market value of leased land at $327,000.  A lease set at 10% of this fair market value means the county has been collecting "rent" from HCV Pacific Partners at the rate of $32,700 per year since April 1, 1999.  This is one day before the news article appeared announcing construction had already begun at the site.  A long-term lease document was filed with the Assessor 4/28/99, and people report they have seen the income included in the NSD's budget for 2000 and 2001.  Could it be this money (and more NSD money) has been invested at the NSD site specifically for this golf course project?  Leaving these questions aside, we can safely state we know who was on the Board of the Napa Sanitation District at the time who permitted the debacle to ensue -- Supervisor Mark Luce, Napa Mayor Ed Henderson, and his side-kick, Napa City Councilperson JoAnne Busenbark.  They'll have a lot of explaining to do -- they and one other all voted for the leases for golf courses, with Harry Martin voting no.
 
The developer goes on to describe its prowess "In depth project experience in the entitlement process enables the company to seek considerable value appreciation through changes in zoning and property use rights & restrictions.  HCV has been particularly successful in taking limited value, marginally productive agricultural land, located near major employments centers, through the governmental approval process....."
 
One speaker cautioned the Board queried the board " has this developer, by its admissions of this being a done deal, tried to set you up to look bought off?"  Paranoia immediately set in, particularly in Luce and Dodd, as they then accused the speaker of suggesting they had been receiving bribes or cash. County Counsel even suggested there is no proof of this.  The point is, no one said bribes were being paid.  In fact, public employees can be charged at the Federal level for corruption for engaging in a pattern of decision-making that corrupts the laws -- no cash need change hands.  Just ask 19 public employees/elected officials from Fresno County who were charged and convicted recently, and another 326 who lost their jobs.
 
Meanwhile, the very idea that agricultural land is marginal (and the knowledge that farmers are being raided and racketed) led one speaker to present more facts:  Napa Valley's vineyard properties are the most expensive in the world.  The opposition was able to point to a June 24, 2001 article in the "New York Times" that placed land sales at $149,000 to $199,000 per acre.  Only two weeks earlier, Napa County Assessor John Teuter was quoted as saying there is good turnover in vineyard properties and one just sold at $300,000 per acre.  The same land was selling at $25,000 per acre six years ago.  Wouldn't more than a six-fold increase in six years satisfy the county's appetite for taxes?  Add to this another "New York Times" article June 24 that recapped some of last year's winery expansion projects.  These alone added $44 million to the tax base, while there is an inventory of other permitted development in the works.  And as to income from Montalcino's hotel tax, it was pointed out that Napa County could collect more from existing resorts and inns -- the County lags behind San Francisco by 2% and Anaheim by 3%.
 
The facts are that an investment pool, Montelcino Resort Investment, Inc., was established March 19, 2001 for the players -- this was two days before the Planning Department hearing in the matter!  The matter was heard in part March 21 and continued for a vote to April 18, 2001.  That vote favored the development, which resulted in the appeal hearing Tuesday.  However, in subsequent Planning Commission hearings on other matters in May, the Planning Commission seemed quite sensitive and emphatic, as though having learned they were recently hood-winked, as they told one party "we want to know who really owns this property."  Another told yet another party "we won't tolerate people who lie.  This is not the place to come if you are going to lie."
 
Another farmer stood up, after reading some of the documents served, and asked the developer" are you still getting money from China?" to which Lerrue responded in the affirmative.  HCV Pacific Partners discloses at its website that Hsin Chong International Ltd. has been one of its partners since 1989.  Documents retained by this farmer indicated it is a partnership of Pacventure Developments, Inc. and RJV Properties, Inc., both active California corporations.  Recent press articles further indicate that HCV Pacific Partners acquired the 1,300-acre Port Ludlow Resort in the deep water Puget Sound in May -- just last month.  With often tense relationships between China and the U.S., the very idea this company has investments in strategic bays along the Pacific Coast sends a chill -- this project is bounded by Napa River, just three miles from San Pablo Bay and the deep waters of San Francisco Bay. Meanwhile, Chinese interests were ferreted out of the Long Beach port several years ago.
 
HCV Pacific Partners asserts its partnership includes Hsin Chong International Ltd., which is a Bermuda corporation headquartered in Hong Kong.  The company is a subsidiary of Hsin Chong Construction Group, an enterprise of the Yeh family.  The company recently built an airport that will serve Lantau, a 140 square mile island where Walt Disney Corp. intends to open a theme park in 2005 at Penny's Bay.
 
Thus, the Farm Bureau faces a monumental task of displaying once again the significance of the issues before the Board.  Not only is the developer connected to Hyatt which is connected by pairing to Disney, but its money source has just built infrastructure in Hong Kong essential to Disney's scheme to develop Disneyland in Hong Kong, a scheme hatched by Disney in 1994 (after which the airport was built).  Meanwhile, documents provided included Montelcino Resort Investment, Inc.'s disclosure from the Secretary of State that its business address is Vancouver, British Columbia; yet neither Montalcino nor its controlling corporation, PCI Corporation, are listed as permitted to operate in Canada by its Corporation Directorate.  And as if by coincidence, Yeh, Hsin Chong, Hyatt and Walt Disney Corporation share auditor PriceWaterhouse -- now PriceWaterhouse Coopers.  This powerhouse was headed for years, until recently, by Dominic Tarantino of San Francisco, known to be quite a deal-maker.  His extended family has interests in Napa County -- lots of businesses and property.
 
To learn more about Hyatt (Chicago's Pritzker family), thumb through the index of the New York Times best-seller "Barbarians at the Gate."  Then read  Pulitizer Prize winner James B. Stewart's "Den of Thieves."  To show how serious Michael Eisner is about his historyland theme park projects, read his 1998 "Work in Progress."  And to better understand Disney and its workings, read "Storming the Magic Kingdom" where many of the players have footprints in Napa County, including Steve Bollenbach (who built an inn in Napa when head of Marriott, then served as Disney's Chief Financial Officer) and David Bonderman (also referred to as a Bass Lieutenant) who until recently through Texas Pacific controlled Berginer Brothers Winery and some 5,000 acres of land in Napa County. 
 
The books were held up one at a time for the Board of Supervisors to take note .... while news clips such as "Hyatt Casinos served with subpoenas by the Department of Justice" and a Forbes Magazine article from 1996 about the Pritzker family's tax problems were held in check.  Indeed, some of the featured stars of the first two books, and Connie Bruck's "Preditor's Ball" own more than 300 acres near Rutherford through a company named Round Pond, Inc. traced back to Kohlberg, Kravis & Robert's address on Sand Hill Road in Palo Alto. But this is paltry compared to affiliate controlling interests of thousands of acres of Napa land.
 
The day flew by, and without realizing it, the Sierra Club and members of Farm Bureau, Grape Growers and the public had filibustered!  The meeting was in fact continued, and will reconvene July 31 at 9:00 a.m. where counsel for the opposition will be able to specifically address the many legal and technical problems associated with the proposed GPA and use permit requested by HCV Pacific Partners (aka PCV Napa Associates LLC), and dig through materials to prove the many lies that have resulted in this mess that has placed the entire county at risk of full development.
 
The parallels to gyrations of Walt Disney Corp, their associates, and their land acquisition schemes in Virginia's Shenandoah Valley from 1989 to 1994 are evident.  These were stopped and are being investigated thoroughly, while some of the players are the same -- only the fronts are new.
 
If other information develops before the July 31 hearing, NewsMakingNews will sound the alert.

 

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