Capitalists to the barricades!

This is another in my series of posts about the rationalizations that otherwise liberal voters use for supporting Measure LV. Of all of them, the one that is probably the most effective with voters tuning-in late to the issue is that LV must be progressive because those arch-capitalists, developers, are against it and spending big money to defeat it.

The reason is that after a century of ballot box governance Californians evaluate ballot measures by looking at “who’s for an’ who’s again’ ’em.” We all know that if tobacco companies or oil companies are against a measure, that tells you a lot.

With a progressive electorate here in Santa Monica, it’s always a bad sign if someone is going to make money one way or another. Although it’s generally okay here to make money producing movies, nearly every other capitalistic enterprise is suspect. The supporters of LV have made a big deal about developer profits, as anti-development activists have done for years. They’re constantly invoking the “greed” of developers, and they loudly denounce anyone who supports the building of anything as being “in the pocket of” developers.

But there’s no secret why developers are spending money to defeat LV. It’s because LV would put them out of business in Santa Monica. None of them are going to spend three or four years developing a project, only to put it up against the crapshoot of an election.

Say you had a business; what would you spend against a ballot measure that would close you down? Take this example: one of the founders of Residocracy is local realtor Kate Bransfield. What if residents, upset with how much they have to pay realtors when they sell their now multi-million dollar homes, put a measure on the ballot that would cap commissions at one half of one percent of selling price?

After all, back when homes in Santa Monica were bungalows owned by Douglas workers, realtors didn’t make nearly so much money. Realtors must be greedy if they want full commissions on the inflated prices of houses now. That money would better go into the retirement fund of the seller.

If such a measure got on the ballot, how much money do you think Bransfield and her fellow realtors would spend to defeat it?

Or here’s another example. Phil Brock, now a write-in candidate for City Council, last week wrote a S.M.a.r.t. piece for the Mirror (tellingly titled, “The Alchemy of Greed”) all about how developer “robber barons” had taken over Santa Monica, how they were spending big to defeat LV, and how voters had to pass LV to stop them. Brock’s day-job is running a talent agency, and presumably he runs it to make a profit. What if there were a statewide measure that would reduce talent agency commissions from the current regulated level of 10% to 5%? How much do you think Brock and his fellow agents would spend to defeat that?

It’s the shortage of housing in California that makes real estate development so profitable today, and the regulatory environment, including measures like LV, that make it so risky. It’s a perfect example of the risk/reward ratio in action. In America we rely on the capital raised by capitalists to build most housing, so if you get rid of developers, you’d better come up with a completely different system to house a growing population.

What’s incongruous about all this “to-the-barricades” anti-capitalist rhetoric from the LV camp is that it’s coming from capitalists, or at least from many people who are making money from the current housing crisis, namely homeowners in Santa Monica (and their realtors). It’s not only Bransfield: City Council candidate and Residocracy founder Armen Melkonians describes himself on the ballot as a “civil/environmental engineer,” but at at least one point in his life he was a developer of mansions in Bel Air.

It’s hard to take seriously any arguments the Residocracy camp makes against making money from real estate.

Thanks for reading.

How to build boxes on the boulevards

You may be familiar with the honor code of the Texas state legislature, as chronicled by the late Molly Ivins: “If you can’t drink their whiskey, screw their women, take their money, and vote against ’em anyway, you don’t belong in office.”

After reading the staff report for Wednesday’s Santa Monica Planning Commission hearing on certain proposed amendments to the land use and circulation elements of Santa Monica’s general plan (LUCE), I’m thinking that the Texas code is not sufficient for Santa Monica. Maybe we need to add another disqualifier:

“If you can’t ignore panicked reactions to angry residents, you don’t belong on the Planning Commission.”

After a six-year process overseen by the Planning Commission, a process that involved remarkable public involvement, the City Council unanimously approved the LUCE in 2010. Back then the LUCE was popular. Even anti-development organizations then involved in Santa Monica politics, normally skeptical of anything emanating from City Hall, approved it.

So what happened? New anti-development groups, notably Residocracy, emerged. New politicians, such as Richard McKinnon, John C. Smith, Armen Melkonians, Phil Brock, and ultimately Sue Himmelrich, none of whom had been active in the LUCE process, also emerged. They hitched their wagons to the anti-development movement.

At the same time, battles were being fought over downtown hotels, battles that didn’t involve anything in the LUCE, but which provided endless fodder for opponents of development. Poorly considered preliminary plans for the Miramar got the Huntley Hotel involved, and the Huntley became a financial and organizational resource for the new anti-development players.

Then in early 2014 the City Council approved the Hines Paper Mate project on a 4-3 vote. The Hines project followed the LUCE guidelines closely, but it was unquestionably large, and suddenly the anti-development forces had, literally, a big target. Worse, because the one big failing of the LUCE was that it allowed for too much commercial development near Bergamot Station, the Hines project would have placed a lot of jobs at a location that was already overwhelmed with commuter traffic.

After defeating the Hines project, the anti-development forces looked for more targets. They found some on the boulevards. Wednesday night the Planning Commission will consider stripping from the LUCE a few mild encouragements for building something other than retail boxes on our boulevards.

Specifically endangered are two potential “activity centers” on Wilshire, one at 14th and one at Centinela. There the LUCE would allow for small increases in development standards to encourage multiple property owners to join together to make better places for mixed residential and commercial developments by sharing parking, open spaces, etc. Pretty innocuous, really, especially since anything built under the activity center designation would be subject not only to the intensive public review of a development agreement, but also to the preparation, through a public process, of a separate area plan.

Similarly, development opponents want to eliminate, from most of the boulevards, “Tier 3” developments, which allow for more housing to be built but which require a development agreement.

The opposition to development along the boulevards from a few people, concentrated in neighborhood groups, has been fierce. The staff report includes euphemistic statements like “substantial community input has been submitted questioning the continued appropriateness of the Wilshire activity centers,” or that the LUCE’s tiers of development and development review, have “created community concern.”

“Questioning the continued appropriateness?” “Created community concern?” Now nice. But we’re not talking about a tea party—or maybe we are.

There’s a lot of anger in Santa Monica these days about development, but there’s no indication that the passion, though at times deep, is widespread. After all hubbub over Hines, the hotels, etc., leading up to the November election, turnout was abysmally low. Yes, the two candidates running for City Council who got the most votes, Kevin McKeown and Himmelrich, ran on anti-development platforms, but factors other than their anti-development support were more crucial to their victories. As it happens, neither one of them got even one-sixth of the registered voters in the city to vote for them.

No one in Santa Monica politics has a mandate and no one bestows them. Elected and appointed officials should vote according their own analysis of the facts, using their knowledge and expertise, not according to who yells loudest.

And they should respect the process. The LUCE isn’t perfect. It should be amended. The development standards in the old industrial areas should be changed so that all new development in excess of what’s there now should be residential. This would respond to the chief complaint about the Hines project, that it had too much office development and not enough housing. But if we’re going to amend LUCE, let’s have a real process, not just the Planning Commission and staff sending something to council in response to squeaky wheels.

Back in 2010 when some of us were arguing against how the LUCE encouraged office development around Bergamot, because we wanted to see more residential development, staff told us not to worry because residential development would be located on the boulevards.

Now with this possible capitulation to the anti-development side, the City might abandon the possibility of building significant housing along the boulevards. But in the “be careful what you wish for department,” the anti-development folks should consider what this would mean.

When properties on our boulevards turn over, as they surely will, if property owners build to Tier 1 standards (up to two stories, 32-feet high) to avoid discretionary review, what do you think they will build? There are two possibilities:

• Retail boxes on top of underground parking. On Wilshire, think Whole Foods or Staples.

• Or maybe two stories of offices, with a bank or brokerage on the ground floor.

If you’re concerned about traffic, what do you think generates more car trips, a bank or a store, or an apartment building?

Thanks for reading.