Plan for Health Clinic in Jeopardy – Government Losing $1 Million
Desert Hot Springs, CA – The city may have failed in another attempt to find a use for the vacant Jewish Temple property purchased for $1.4 million. The city’s most recent scheme for the Pierson Boulevard property involves selling it for a million dollars less than the city paid for the property. The city wants the property to become a low income health clinic. That prospect is now in jeopardy.
On Thursday, the California Department of Finance notified the city it would not get the quick approval of the sale that city leaders had hoped for. Quick approval is needed because of a deadline placed on the buyer, Borrego Health Foundation, for a federal grant it received to construct the clinic.
Rushing to Sell
In the wake of a State elimination of city redevelopment agencies, redevelopment agency property owned by the city must be sold. The Jewish Temple property is redevelopment agency property. The Jewish Temple sale requires approval by the Department of Finance and it was not willing to give approval on an expedited basis.
The city council voted on December 4, 2012 to approve the sale of the Jewish Temple property for $291,000, representing a $1.1 million loss of public funds on the original $1.4 million purchase price.
By the terms of the federal grant, construction must be completed by September 2013. With the time needed for construction this leaves just a few weeks until Borrego must start construction. Normal approval time by the Department of Finance is typically 3 to 6 months according to the city’s estimate.
City management is now scrambling after discovering the problem. In a staff report issued to the city council, city staff said the expedited approval was rejected for “bureaucratic reasons” and called the normal process “cumbersome” and could kill the low income health clinic for the city downtown property.
The denial will send city manager Rick Daniels on a hastily booked flight to Sacramento to beg the agency to quickly approval the sale. It will be Daniel’s job to convey the importance of the medical clinic to the city and to justify the $1.1 million loss between the purchase price and the sale price.
Instead of taking responsibility, city management is blaming Sacramento for bungling the Jewish Temple deal. It is uncertain how harsh city criticism of the Department of Finance will play as the city seeks what it is asking of the Department. With sales proposed throughout California, the Department is facing many requests for approval and also a holiday work schedule. It may not be able to consider the matter until the new year.
It appears to be both a matter of city management not bringing the Jewish Temple deal forward in a timely fashion and city management failing to follow the rules involving public engagement.
There is no question that city management failed to provide supporting documents for public review. New information in the form of 131 previously unreleased pages providing details of the transaction were only made available to the public just a few minutes prior to the city council meeting and its unanimous approval of the Jewish Temple sale.
The Eggnog Problem
The rush to sell this building at the last minute may have less to do with the intentions of a health clinic and more to do with satisfying special political interests concerned with saving face from poor management.
After all, there are three seats up for election in 2013 and all three occupants of those seats voted to approve spending the $1.4 million in public funds to purchase property worth conservatively at the time; maybe less than one third the amount paid.
The city tried explain the Jewish Temple purchase by promoting it as the site of a much needed community center and theater. However, the building was found to be unsafe for occupancy after the city purchased the building and it was mostly demolished a few months after the 2008 purchase. The city then proposed moving the fire station 6 blocks from its existing location to the Jewish Temple property.
That idea too was scrapped.
The city manager has long insisted the public will recoup the entire amount of the $1.4 million and adamantly said so again as recently as three weeks ago.
“The city will get back all the $1.4 million,” said Rick Daniels, city manager.
The potential loss of the low income health care clinic could leave council members with eggnog on their holiday faces, and worse. In an election year the property has stuck out like Tom Thumb’s sore thumb on the political landscape.
Importantly, objections raised by the public attempting to review this matter may have been suppressed or not made available for consideration by the city council or the Finance Department in Sacramento.
One objection was sent by email to the city attorney two days prior to the vote by the city council approving sale of the Jewish Temple property. This objection informed counsel the required public documents were not available for public review 48 hours in advance, as required, and specifically requested the objection be made available to the Redevelopment Administration in Sacramento as part of the public document package for review.
Suddenly Appearing Documents
The sudden appearance of 131 pages never previously made available for public review in city hall or elsewhere cannot be ignored. This sudden deluge of previously withheld information gave the public insufficient time for review and effectively eliminated opportunity for public comment making it difficult and impossible to lodge objections.
Blindfolding the public resulted in comments made in the closing minutes of the December 4th city council meeting raising multiple objections to the sale due to information withheld from the public and not shared with the public as required.
The Jewish Temple property has a checkered history since first purchased by the city redevelopment agency raising alarms and considerable public concern. Not only has the purchase been endlessly debated, the city spent even more public funds failing in an attempt to move the fire station there. Ramming this project through at this time by sidetracking the approval process again paints the city into a corner.
Public statements by the city manager referenced an agreement made many months previous between the city manager and the proposed purchaser of the Jewish Temple property. Contents of this pre-existing agreement were not part of the public record.
The Chairman of the Planning Commission, Steve Sobota commented at the December 4 meeting by challenging the intended use of the property, questioning the intended use as the proposed use appears to not meet conditions of the Specific Downtown Plan as part of the city’s General Plan. In addition, the intended use of the property was never brought before the Planning Commission as required.
The city has a sorry history of rushing projects at the last minute without performing due diligence in establishing credit worthiness of agencies, individuals and corporate beneficiaries relating to large scale projects of significant financial interest.
Such mistakes result in the city recently losing millions of dollars. The Jewish Temple property purchased for $1.4 million in public funds and being sold for less than $291,000 necessitates more than the normal amount of caution and careful consideration in moving forward.
all photos by writer except photo of Rick Daniels by Bruce Montgomery