Column 10
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Truth and Consequences in Montageville – Part 2.

Why won’t the City Council share its secret documents with the public?

 In my last column, I discussed the fact that The Beverly Hills Residential-Business Alliance”, also known as the “Alliance”, has sued the City to compel the City to disclose 63 documents relating to the proposed Montage hotel project. 

 

This week, I will discuss the City’s arguments against disclosing the first 17 of these documents.  I will also suggest a solution that I believe is both fair to all concerned and in the public’s best interests.  Next week, I will discuss the remaining documents,

 

According to the City’s Memorandum of Points and Authorities filed in opposition to the lawsuit, the first 17 documents “are all confidential documents prepared for the City by Keyser Marston Associates, Inc.  Keyser Marston is the City’s financial consultant on this project.  These documents all contain sensitive project cost estimates and financial pro formas for the City’s negotiators to use in negotiating terms with [the developer] regarding the sharing of the costs of constructing the underground garage structure and the public plaza, as well as revenue projections for the completed project.”

 

The City has made two arguments against producing these documents.

 

The first argument is based on something called the “deliberative process privilege.”  The gist of this argument is that elected public officials should not be forced to “operate in a fishbowl.”  Thus, officials should not be forced to answer questions about why they made a particular decision or disclose calendars showing all of their meetings.  Otherwise, our elected officials would be deterred from being frank with each other during their deliberations and might be deterred from meeting with controversial individuals and groups.

 

As a former member of the school board, I understand the rationale for the deliberative process privilege.  Legislators, like our City Council, should enjoy a zone of privacy so that they can communicate confidentially in sensitive situations.

 

Here’s a real life example that should help make this clear.  When I was on the school board, parents and teachers would sometimes whisper things to me in confidence.  Sometimes this was face-to-face, sometimes over the phone and sometimes by e-mail.  The range of topics was broad, and I would hear things that people would never be willing to say in public.

 

The deliberative process privilege is intended to protect such confidential exchanges of opinions and information.  If not for the deliberative process privilege, many of these discussions would never occur, and our public officials would be forced to operate with less information.

 

However, in my opinion, the deliberative process privilege is irrelevant to these documents.  These documents contain the analysis of the City’s paid outside experts as to the economic aspects of the project.  Presumably, the Keyser Marston analysis would be precisely the same whether it was designed solely for the City’s Council’s secret perusal or for public disclosure.  Economic analysis should not be affected by who is going to read the report, and Keyser Marston is supposed to be an independent expert.  Thus, the purposes of the deliberative process privilege (of protecting confidential communications that might otherwise be inhibited and prohibiting the cross-examination of legislators about why they voted in a particular way) would not be served by keeping these documents secret.

 

If these documents are disclosed, they won’t provide any information as to the City Council’s deliberations and they won’t discourage future confidential communications.   They will, however, provide the public with access to reports that were paid for with public funds and allow more informed public support or opposition to the project.

 

If the secret reports indicate that the project is almost certain to be successful and the reports seem believable, then this will probably increase public support for the project.  However, if the reports discuss risks that have been downplayed by the City or if the reports contain errors, then this will probably increase opposition against the project.  However, in either event, it seems to me that the deliberative process of the City Council will NOT be exposed by reports that have been prepared by the City’s outside expert.

 

The City’s next argument is that disclosure of these documents would be harmful to the City’s ability to negotiate with the developer.  Unlike the City’s deliberative process argument, this argument has some plausibility, but not much.

 

I can understand that in certain situations, it is in the public’s best interests to keep reports secret.  For example, if the City was negotiating to buy private land, it would be a bad idea to force the City to disclose appraisal reports or internal reports as to how much the City should be willing to pay.  In this example, the disclosure would provide the other side with an unfair advantage.

 

However, based on the City’s own website, it appears that all of the key deal points with the Montage have been finalized.  However, I will give the City the benefit of the doubt, and assume that someone will wake up and try to negotiate a better deal.

 

Even assuming that there will be additional negotiations, I believe that the documents should be disclosed.  I would be amazed if these documents contain any information that will come as a surprise to the developer.  The developer is very sophisticated and undoubtedly has its own analysis, which is far more advanced and detailed than anything that the City could obtain.

 

Mayor Mark Egerman and Councilmember Linda Briskman are suffering from delusions of grandeur if they think that they can rely on these secret reports to out-negotiate a seasoned real estate developer.  Mayor Egerman and Councilmember Briskman are both intelligent, but this is not their game, and I think that their chances of “snookering” the Montage people are less than the chances of my dog winning the Kentucky Derby.

 

As stated in an earlier column entitled “Greedy Sheep Meet a Hungry Tiger,” I believe that the City is making a bad deal, and the deal is along the lines of what you might expect if the City hired Ralph Kramden to negotiate against Donald Trump.  By the way, such earlier column and most of my other columns are now posted on my website at www.geraldlunn.com/weekly_columns.htm.

 

In addition, I believe that there is a solution which would eliminate any possible prejudice to the City. 

 

In light of the fact that the City is bringing over $50 million of cash and property to the table and granting tens of millions of dollars of zoning concessions to enter into a perpetual partnership with the Montage, I believe that the City should require the Montage to make its own secret reports available to the public, so that both sides’ reports can be examined by anyone who cares to look at them.  The City can’t legally require this, but the City could legally take the position that absent full disclosure to the public, there will be no deal.

 

The developer has recently been advertising the fact that its doors are open for citizens who want to learn more about the project.  I would be a lot more impressed if the developer provides the public with the level of honest sharing of information that prospective partners often provide to each other.  Indeed, if the developer is TRULY WILLING TO PROVIDE ALL RELEVANT DATA TO THE PUBLIC, I believe that a lot of people, including me, would be willing to rethink their positions.

 

This project already stinks of secrecy.  The City Council entered into a memorandum of understanding and a majority of the Council was committed to the project before it was even on the public’s radar, and by the time of the Planning Commission hearings, this was already a “done deal.”  For months, the City’s website has had a special section promoting the project, and Mayor Mark Egerman has had a number of meetings in which he has tried to sell people on the project.

 

Revealing these secret documents will purge some of the stench of secrecy that has surrounded this project.  This might even increase support for the project, if the reports address the concerns of opponents as to the true financial risks to the City if things go poorly.

 

The next document that the City wants to keep secret is a preliminary draft of the City’s traffic and parking analysis, which was prepared by another private consulting firm that was paid with public funds.  Since the final draft has been questioned by many, it would be informative to see what was changed from the preliminary draft.

 

For example, if the preliminary draft concludes that there will be major impacts on traffic, this would suggest that SOMEONE pressured the consultant to tone this down in the final draft.  If this happened, then I believe that the public deserves to know this.  Also, if this did not happen, then I believe that this would make some people, including me, feel better about the project.

 

The City has argued that the deliberative process privilege applies to this draft report, even though the final report has been made public.  I believe that this position is flat-out wrong.  Disclosing this draft report will not expose any deliberations of the City Council or inhibit any future communications.  However, it will satisfy the public interest in knowing whether the consultant was pressured to change the report to minimize the discussion of adverse impacts on traffic.

 

To summarize, I believe that none of the City’s deliberative process arguments are plausible.  Furthermore, the City’s arguments regarding giving the Montage an unfair advantage are implausible, and if the City Council really wants to act in a fair and democratic manner, it will give the Montage developer two choices – put its own cards on the table for all to see (and the City will do the same) or go find some other city to grant $65+ million of cash, land and zoning concessions.

 

Next week, we will go from the frivolous to the insulting.  Next week, I will discuss additional secret documents.  These documents are already in the possession of both the City and the developer.  The only people being deprived of this information are the members of the public who might care about an investment of $65+ million of taxpayer funds, property and zoning concessions..

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