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November 6, 2018 — California General Election
Local

City of MontereyCandidate for Mayor

Photo of Bill McCrone

Bill McCrone

Community Volunteer
3,046 votes (30.82%)
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My Top 3 Priorities

  • Restore transparency to City Council that made significant business decisions without public input or announcement.
  • Create Affordable Housing Authority (AB 1598) and Acton Plan to immediately address our shortage of 660 units.
  • Put our waterfront leases and management on a sound business basis that benefits our residents first and foremost.

Experience

Experience

Profession:Retired attorney, Planning Commissioner (18 years)
Planning Commissioner, City of Monterey Planning Commision — Appointed position (1997–2015)
Law Offices of Willard P. McCrone, self (1977–2012)
Commissioner, City of Monterey Parks and Recreation Commission — Appointed position (1987–1997)
Neighborhood Improvement Committee member, Old Town Representative, Neighborhood Improvement Committee — Appointed position (1988–1991)
Captain, Corps of Engineers, U.S. Army (1968–1974)

Education

United States Military Academy at West Point; University of Virginia School of Law Bachelor of Science; Juris Doctor, Civil Engineering; Law (1974)

Community Activities

Board Secretary and Chairman of the Lower Presidio Historic Park Committee, Old Monterey Foundation (2012–current)
Board Member, Old Monterey Business Association (1997–current)
Mentor, Veteran's Transition Court (2018–current)
President, Family Resource Center (1988–1994)
President, Pacheco Club (1989–1992)

Political Beliefs

Position Papers

My Position on the Most Important Issues and Problems Facing Monterey

Summary

 

This Council has adopted a policy of conducting important business in closed sessions, has failed to address the growing problem of campaign money influence, and has ignored the workforce housing crisis.  I believe that, with my experience and understanding of those issues, I can provide the leadership to move the Council and the City forward with active solutions now and for the future. 

 

 

  

 

  

 

 

 

Open, Transparent Government.  In the past two years, this Mayor and Council has adopted a policy of deciding important property management decisions in closed session and never informing the public.  For some of these important decisions, the only way for the pubic to discover what the Council has done is to make a Public Records Request.  This is totally unacceptable!  In my opinion, this constitutes a return to the days of backroom deals, and leads to ill-formed decisions and a lack of accountability for items such as below market leases.  In three specific cases, this policy has deprived our residents of much needed revenue from our Tidelands property.  If elected, I will immediately discontinue this policy and work to minimize closed sessions while insisting on proper procedures for genuinely confidential discussions.

AFFORDABLE/WORKFORCE HOUSING.  The crisis of workforce housing shortage in Monterey has been growing over more than decade.  A city where the people who work here and who grow up here cannot afford to live here cannot sustain itself.  If we do not initiate solutions immediately, we are in grave danger of becoming just a “resort city” that has little sense of community and the rich heritage that is ours.  All realistic solutions involve increased density in select areas of the City and mixed uses in new or existing retail buildings.  Yet my opponent has actively opposed mixed use and increased density that are required to address the problem.  He leads a faction of this community with a NIMBY attitude that believes if you hide your head in the sand, the problem will become someone else’s. I propose active initiatives to address the growing problem by revising some of our zoning laws and taking advantage of State legislation than could provide funding to assist the proper development of affordable housing.  

CAMPAIGN FINANCE REFORM.  In recent years, campaign financing in Monterey has grown way out of proportion to the needs of citizen politicians in this relatively small city of 28,000.  One candidate for City Council raised over $53,000 in his first-time campaign in 2016. That is nearly $2 for every citizen in Monterey, and over $7 for every registered voter.  For a part time job that pays only $500 or so per month, it is easy to conclude that the purpose of such disproportionate donations is to buy influence.  Indeed, the case can be made that donations did influence Council voting in the past four years.  I will propose and push a campaign finance reform ordinance that would require that a council member recuse his or herself from voting on any matter before the Council that involves a campaign donor of $500 or more. 

Budget/Financial Issues.   The number of city employees earning more than $200,000 per year has mushroomed almost 200% during Clyde Roberson’s tenure as Mayor, yet key management positions remain unfilled.  Our pension liability problem grows daily as lower management type employees are allowed to “game the system” for the purpose of allowing them to retire in some cases on a pension that is more than their base salary.  Budget hearings, which used to consume several hearings in the Spring, are now little more than rubber-stamped by this Council. There is money to be found to allow our civic institutions such as First Night, the 4thof July parade, and Christmas celebrations, and even fireworks to be continued.  Whether making difficult decisions to reduce generous executive salaries or discontinuing subsidies to prosperous businesses on the Waterfront, an active Council must be more diligent in insisting that it receive choices and be able to make them. I am not a retired government employee, can read and understand a budget, and have the business experience that is lacking with Mr. Roberson to insure your tax dollars are well spent.  

 

Property Management.  The City administration of our real estate assets has been ineffectual; particularly our public trust tidelands property on the Waterfront. Due to failure to follow our Charter or provide open public bidding, the City has entered into terrible leases with an isolated few private merchants that have, and will continue, to cost the public millions of dollars in lost rental income.  I blew the whistle on this sorry situation, and have the expertise and experience to put the City’s property management on a sound business footing.   

 

Downtown Specific Plan.  I helped to draft the Goals and Objectives of the Downtown Specific Plan in 2010 as a member of the Planning Commission and worked diligently to move it to completion. The final Plan won an award from the California League of Cities, but this City Council and Mayor have done nothing to implement it.  Better traffic circulation to make the downtown more accessible, parking plans, and inviting landmark features will reinvigorate the downtown to its historic character before we walled off the downtown from the Waterfront in 1977. The problems of a moribund downtown have been talked about for many years.  The time is now to implement it.  A coherent, realistic plan to fund the improvements called for in the Plan must be developed and put on a timeline to accomplish the salutary benefits made possible in the Plan.   

 

Waterfront Master Plan.  Historically, Monterey has been a waterfront town.  In 1939, the City adopted a Master Plan that preserved that character, and further provided that there be no parking along the waterfront.  Through the efforts of commercial interests, the City abandoned that well-reasoned plan and gave us the huge surface parking lot covering some of the most valuable real estate in California.  I have worked tirelessly over six years to develop a new Master plan for the Waterfront that will more integrate the waterfront with the Downtown, and return much of our waterfront to a park-like setting.  I will carry through with the hopeful prospects for the plan, and its implementation.  There is money to be found to buildout the Plan in the Tidelands Trust Fund, currently $5.2 million, and we must take the steps to make these funds available.     

 

Historic Adobes and Buildings.   Our historic properties in the downtown have become shuttered during most of the year due to lack of State Park funding.  State Parks is amenable to a partnership to accomplish this, but the City needs to take the lead in organizing a program of private/public partnerships to improve these properties (like the First Theater) and provide volunteer staffing to keep them open.  Finally, we need to establish a non-profit charitable civic foundation to receive tax-deductible donations to create a fund for financing civic activities in the future, instead of relying on the general fund in tight economic times. 

Lost Transparency in Monterey

Summary

My opponent has presided over a closing of Monterey Government by allowing important business decisions to be made in closed session without notice to or input from the public.  As a result, millions of dollars have been given away to Waterfront merchants, hich decisions can only be discovered by a Public Record Request.

Transparency Lost in Monterey

The Brown Act of California’s Government Code sets forth the gold standard by which Transparency is imposed upon all government bodies:

54950. In enacting this chapter, the Legislature finds and declares that the public commissions, boards and councils and the other public agencies in this State exist to aid in the conduct of the people’s business. It is the intent of the law that their actions be taken openly and that their deliberations be conducted openly. The people of this State do not yield their sovereignty to the agencies which serve them. The people, in delegating authority, do not give their public servants the right to decide what is good for the people to know and what is not good for them to know. The people insist on remaining informed so that they may retain control over the instruments they have created.  (emphasis supplied)

Transparency at Monterey City Hall has suffered a serious setback in the last two years as a result of a policy instituted by Clyde Roberson to make decisions in closed session which are never announced to the public.  Those actions may be within the letter of the law (Govt. Code sect. 54957.1), but clearly violate the spirit and intent of the Brown Act.

On July 18, 2017, the City Council – in closed session – granted an unnecessary 20-year lease extension to the Old Fisherman’s Grotto at a rental rate less than half of Fair Market Rent.  In doing so, the Council ignored well established fair market value for this Fisherman’s Wharf restaurant and gave a subsidy of an estimated 5 to 14 million dollars or more of taxpayer revenue to the Shake family.  This action violated the California Constitution, the City Charter, and common sense.  Mayor Clyde Roberson signed the extension on November 4, 2017 but the City has yet to disclose this action.  It has only come to light as a result of a Public Records Request.

 

A little background is needed to put this action in context.   As the result of many hearings beginning in 2010, knowledgeable citizens were able to educate the City staff and Council members about the unreasonably low rents from the public’s Tidelands Trust property on Fisherman’s Wharf.   The City Council, on a 3 – 2 vote, approved comprehensive new guidelines for commercially-sound leases on the Waterfront in April 2016, a major change to the mismanagement of the Wharf in effect for over 50 years.

This success was short lived.  Three old Wharf ground leases expired in 2014 and, pursuant to the new leasing guidelines, the City was immediately successful in 2016 in leasing the vacant spaces to NEW tenants who are paying reasonably fair market rent (6 % of gross sales) under commercially reasonable building leases, including a reasonable term length and triple net CAM charges.   But the new policies did not last long.

A campaign to reverse the new leasing policies was begun in May 2016.  A march on City Hall by Wharf workers in late summer 2016 was billed as “Wharf Lives Matter too.”  And then, suddenly in September 2016 and less than six months after the new leasing guidelines were enacted, Councilman Timothy Barrett decided to change his decisive vote by moving for a reconsideration of the new leasing guidelines.  He was able to do so via a Roberts Rule that allows a member who had voted for a motion to move for reconsideration.

Private commercial interests then mounted an expensive campaign effort ($53,000 was raised for Dan Albert Jr.) to unseat Libby Downey in the November 2016 election.  This well financed campaign succeeded in tipping the majority of the Council in favor of Waterfront business interests.  It was money well spent for influence and marked a return to the shadowy deals that had infected politics in sleepy little Monterey for fifty years from 1964 to 2014.

The new City Council immediately “revisited” the new leasing guidelines for the Waterfront at the request of Timothy Barrett on February 22, 2017.   Some might wonder whether Barrett was influenced by the receipt of at least $4,000 in campaign contributions in 2014 from the Shake family.  The Council (by a vote of 4-1) inexplicably abandoned the new policies at the request of Wharf merchants.  There is no legitimate explanation for this about-face.  My opponent justified his vote by saying something about “simplifying” leasing guidelines with more “flexibility”, which is a euphemism for avoiding accountability for Council leasing decisions. 

This shift in favor of commercial interests over the public interest immediately bore fruit.  Extension of the Old Fisherman’s Grotto lease (with more than 4 years yet to run to 2021), refused by previous Councils, was approved for negotiation (vote 4 – 1) on February 7, 2017.  Then the Council “received a report” on that matter “without action” in a closed, confidential meeting on March 21, 2017. That report was not made public and, although the public may comment on any closed session subject on the agenda, the public cannot intelligently do so without a staff report disclosing what exactly was under consideration.  The Grotto extension next appeared on the Council closed agenda on July 18, 2017, when the Clerk reported to the public only that “the City Council gave confidential instructions to their negotiators (4-1; Haffa voting no)”.That is the last time this matter came before the Council, according to the City Clerk.

Contrary to the Clerk’s report and unbeknownst to the public, the Monterey City Council during closed session on July 18, 2017, apparently agreed to give Chris Shake a twenty-year extension on his Old Fisherman’s Grotto ground lease at the same below market deal as given away in the 1990’s.

Specifically, here is what the City Council did in closed session without public input or disclosure. On a 4 – 1 vote, Haffa dissenting:

  • It approved and authorized the Mayor to sign a three page “Lease Amendment NO. 2” which extended the inappropriate 1992 ground lease for Old Fisherman’s Grotto (set to expire in 2021) for an additional 20 years until 2041 (2017_1102 Lease Amendment 2 (Ag-563).
  • It raised the minimum monthly rent by a significant amount, but that is irrelevant because the Grotto never pays a minimum monthly rent due to its high gross rents that far exceed the minimum monthly rent.
  • It left the gross rent at 3 % of gross sales revenue, when the fair market rent established by the City’s own 2012 appraisal for ground lease restaurants on the Wharf is at least 6 – 7 % of gross revenue (2012 0919 Monterey Wharf 1 Final).  Indeed, in my opinion, sub-lease restaurants on Fisherman’s Wharf currently bear a rent of 10 – 12 % of gross sales (see discussion of Scales sub-lease below).
  • It inexplicably extended a ground lease for another 20 years, to 2041, even though the public has owned the premises (building and all from roof to underwater mud) from at least 1989 and probably from before 1964.
  • The Council announced no consideration whatsoever for saddling the public with another half-price (or less) lease and indeed received no consideration. The only reason the Council stated for gifting this extension was that the “Lessee (Shake) desires to extend the lease on the same terms and conditions set forth in the original (1992) lease.”
  • The Council (in paragraph # 7) also gave Chris Shake the right to veto any Public Records Request pertaining to any information received from the Shakes which Shake deemed confidential.  In my opinion, this was an unheard of transfer and abdication of municipal governmental authority.  No reason or justification was given for this delegation of government authority to a private person nor any justification given as to how this could possibly be in the public’s interest.

This action by the Monterey City Council is a violation of Section 6 of Article 16 of the California Constitution, which prohibits the gifting or giveaway of public funds to private persons. It is a violation of the City’s Charter § 6.4, which requires that: “All leases of City property shall be at fair market rent as established by sound appraisal practices.” (ARTICLE 6, City Charter).   The latest appraisal received by the City was in 2015 and set FMR at 6 – 7 % for ground lease restaurants on the Wharf (2015_0708 Monterey Wharf 1 Percent Addenda).

How much did the Council give away to Shake?  It is very difficult to get accurate rent information from the City but we do have the rent roll for FY 2015 – 2016   (rent roll Grotto).  Old Fisherman’s Grotto paid total rent (3% of gross income) in the amount of     $ 231,867 that year and, from that figure, we can make reasonable estimates of the amount of the giveaway.

If the Grotto was paying the minimum appraised Fair Market Rent (FMR) in 2016 (6% of gross, as required by the City Appraisal, instead of 3%), the Grotto would have paid at least double what it paid, or another $231,867.   Projecting that annual shortfall for the 20 year extension (and assuming no inflation), gives us $4,637,340 as the amount the public loses by this extension.

But other restaurants on the Waterfront, including the Shake-operated “Scales” restaurant, are paying approximately 12 % of gross sales for rent, not 6 – 7% ((2014_1105 Conc#33 Sublease and Assign_Shake-RestPacificGroup Sublease) The Scales sub-lease of 2014 requires the sub-tenant Shakes to pay the City rent of 3% of gross ($63,629 in 2016  (rent roll scalesPLUS $22,000 per month rent (annually increased by NLT 3% per year) to Mary Alice Cerrito-Fettis and her sister.  Doing the math, combining those two rents paid by Scales comes out to about 12% of gross sales in 2016.  So it is fair to say that an arm’s length negotiated lease by skilled city negotiators should produce a new lease to Old Fisherman’s Grotto that would pay the public 4 times (12% instead 3%) the rent actually paid for 2016, or a total of $927,468.  That is what any commercial landlord would have required for these Wharf premises.  If the Shakes are willing to pay 12% of gross sales as rent in a restaurant right across the street, how can the City Council justify charging only 3% of gross at the OldFisherman’s Grotto?

Gross sales at the Wharf and Waterfront have gone up since 2016 and will continue to grow geometrically to 2041.  Assuming an annual increase of 3% in gross sales (which is what most landlords like Mary Alice Cerritos-Fettis would require), the graphic below illustrates the expected rent that would have been received by the residents of Monterey during the period 2021 to 2041 had the City Council done its job properly to negotiate a new lease with Shake as required by our City Charter, at either the appraised FMR (6 – 7%) or actual FMR (12%).

Old Fisherman’s Grotto existing@ 3% appraised@6% Actual market@12%
Lease Rent on Gross Sales      
       
2016 Existing  $    231,867    
Should Be    $       463,734  $         927,468
       
Public Income Given Away      
From 2021 to 2041    $    4,637,340  $    13,912,020
       
Adjusted for Inflation @ 3% per year from 2021 to 2041     $7,419,744  $ 22,259,232.
       

 

Thus, we can see that extending this lease for another 20 years (until 2041) at 3% of gross sales, this City Council has given away public money to the Shakes in the conservatively projected amount of $5 to $14 million!  That is not fair to the public and it is not fair to competitors in other nearby areas of the City, such as the Downtown.

What could the City do for the public benefit with an additional $1,000,000 a year for 20 years from just this lease?  With an adjustment of the boundary and uses of Tideland Trust money (requiring an application to the State Lands Commission or even legislation), it could possibly fund the July 4thparade, fireworks, and the Christmas Tree Lighting ceremony.  It could continue financial support for First Night. More importantly, It would provide money to implement the Waterfront Master Plan and the portion of the Downtown Specific Plan which connects the Downtown to the Waterfront.  And, with a little adjustment to the area covered by the Waterfront and Tidelands area, the City could even offer Monterey residents free or reduced membership fees to the Sports Center.

 

Our citizens must retake our government from the commercial influence peddlers on our Waterfront.  We must elect candidates who are dedicated to transparent government and serving the public interest.

I am running for Mayor to put an immediate end to this closed session policy.  The residents of Monterey are entitled to notice and an opportunity to comment on Council decisions and to know the reasons why the Council makes its decisions, improvident or otherwise.  As Mayor, I will insure that Council decisions are transparent.

 

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