L.A. Developer Awakens North County's Sleeping Village by the Sea

Lessons Learned by Rick Caruso, Elected Officials and Carlsbad Voters

Signatures have been validated on a referendum overturning Carlsbad's city council approval of a shopping center on the shore of the Agua Hedionda Lagoon. It's time to reflect on lessons learned from the developer's failed attempt to bypass city voters, the normal review and approval process, and the California Environmental Quality Act.

When L.A. developer Rick Caruso approached city officials three years ago, they urged him to build community support for his plan. They must have assured him 48 acres of land adjacent to the pristine lagoon would be the perfect place for a shopping center.

In courting the developer, however, they may not have told him about the 2006 Battle of the Propositions. Prop E, prohibiting all commercial development there, failed to pass by just 56 votes.

The billionaire developer began his campaign to build community support by having his company, Caruso Affiliated, join the Lagoon Foundation as a deep pockets contributing partner. One of his development managers earned a seat on the AHLF Board of Directors.

I suspect it was Caruso's generosity that led to the Lagoon Foundation Board chair's signature on the Agua Hedionda South Shore Initiative. Adding the signatures of a former chair of the Chamber of Commerce and a former city planning commissioner completed the ruse of a "citizen-led" initiative.

Caruso probably figured buying the signatures of 15 percent of city voters would be cheaper and less risky than an election campaign. The Citizens for North County's all-volunteer army of referendum signature gatherers proved the out-of-towner underestimated the locals.

On May 12 the Carlsbad city clerk received the developer's "citizens initiative" proposal. Three days later, Sean Welch, an attorney with a San Rafael, California law firm created the Preserving Carlsbad Open Space the Right Way, California Domestic Corporation.

Caruso invested in a signature gathering drive second to none, recognizing it would require lots of money and plenty of deception. His campaign to build a mall twice the size of the Carlsbad Premium Outlets would be disguised as an environmentally-friendly grassroots crusade to save the Strawberry Fields.

The developer's door-to-door signature contractors, posing as local residents, carried petitions with the bogus promise the initiative would be submitted "directly to the voters." Mailboxes were flooded with promotional materials.

A video of children romping through long grass in open fields splashed across social media and TV screens, with only glimpses of a "pedestrian-friendly retail promenade," the name chosen for the Nordstrom-anchored mall.

From January 1 to June 30 Caruso Affiliated donated $2.8 million to the Preserving Carlsbad Open Space the Right Way, Inc. The fledgling company spent $2.6 million during those six months. 

The small print accompanying its marketing materials read, Paid for by Preserving Carlsbad Open Space the Right Way, with major funding by Caruso Affiliated. Financial disclosure documents reveal, however, Caruso Affiliated was the only donor paying for those mailers and TV ads.

Those being asked to sign petitions might not be so eager if they knew the only benefactor of the campaign was also its prime beneficiary. Paid for entirely by Caruso Affiliated could be a turnoff. Borrowing from the Bard, methinks Mister Caruso understood that a developer, unlike the rose, under any other name smells a lot better.

Here's a sample of vendors profiting from Caruso's campaign under the alias, Preserving Carlsbad Open Space the Right Way.

$541,000 to Waterfront Strategies, Washington DC, a media buying firm.

$400, 000 to The Baughman Company of San Francisco, "the top creative persuasion mail firm in the business."

$400,000 for Television ads by local affiliates.

$40,000 to Method Campaign Services, Los Angeles. "Our high quality signature gatherers receive thorough training to guarantee that you attain the numbers you need."

$13,000 to the Callidus Consulting Group, San Diego. Matt Hall and Michael Schumacher are among their partial sampling list of clients. Financial disclosure forms show Hall paid them $4,000 in his 2014 mayoral race, and Michael Schumacher $1,750 in his city council campaign. Curiously, Preserving Carlsbad Open Space is not in their list of clients.

Of the $2.6 million spent on Caruso's initiative campaign, Carlsbad businesses got about $30,000.

By comparison, the truly citizen-led referendum drive spent about $9,000, funded entirely by individual donations and fund raisers, to collect enough signatures to overturn the city council's decision to refuse to put Caruso's corporate-led project up for a vote, as promised. 

Lessons learned?

1. Caruso Affiliated, you can't buy Carlsbad voters.

2. City Council, don't underestimate the power of the people.

3. Carlsbad voters, stay awake, do your duty as citizens, and keep watch on your elected officials.

The Riehl World pledges to do its part.

Referendum Signatures Stun Caruso, City Council Pals

Strawberry Field Owner's Campaign Donations Revealed

It must have been quite a shock for L.A.'s Caruso Affiliated executives to see the stack of signed petitions delivered to the Carlsbad city clerk's office last Thursday. The 9,000 signers of the referendum petition are calling for a public vote on the developer's plan for a lagoon-view shopping center, as promised in the title of the initiative, Measure to be Submitted Directly to the Voters.

When the Carlsbad city Council unanimously approved his plan on August 25, Caruso had already spent nearly $3 million on signature gatherers and a blizzard of glossy, full-color mailers to persuade 20,000 Carlsbadians that his plan to build a shopping mall was all about saving the Strawberry Fields.

The day after the council voted, a grassroots group, Citizens for North County, announced its plan to launch a referendum drive. Caruso had to redouble his marketing campaign. But this time his mailers, accompanied by daily prime time TV ads, featured headshot photos of and quotes from all five city Council members, as well as the owner of the Strawberry Fields. Each repeated the lie that signing the referendum would destroy the Strawberry Fields, despite the promise of Prop D to preserve them, passed by voters in 2006. The Caruso mailer included a detachable, postage-paid card to return to the city clerk for signers of the referendum to have their names withdrawn.

About 700 signers chose to do so. Caruso relied on the confusion caused by his two dishonest campaigns to "Save the Strawberry Fields," the first by signing an initiative, the second by refusing to sign a referendum, to keep residents from signing anything. Heads he wins, tails we lose.

While the strange bedfellows of big-money and elected officials urged us to turn down our right to vote, the citizen-led referendum drive soldiered on, relying on social media to generate hundreds of volunteers to station themselves in city parks and other public places to collect 9,000 signatures in 30 days on a paltry $9,000 budget. That's 300 signatures a day at a dollar apiece.

It took 90 days for Caruso's professional signature gatherers to snag 20,000 signatures. With a $3 million budget, that amounts to only 222 signatures a day at $150 each.

I couldn't help but wonder why the city Council not only refused to put the Caruso plan up for a vote in a special election, but even to delay their decision for 30 days to enable residents to be more fully informed. The August 25 meeting was packed with dissenters. You'd think elected officials would be more responsive to their constituents.

That made me curious about campaign contributions, so I went to the city's website, where I found, among Mayor Matt Hall's financial supporters, the name of James Ukegawa, the man you see posing in the Strawberry Fields on Caruso's mailers and in his TV ads. He's identified as a "Carlsbad Strawberry Company Farmer" on the mayor's filing form, stamped by the city clerk on July 30, 2014. Ukegawa's $5,000 contribution is dated June 7, 2014.

The "Strawberry Company Farmer" is identified on Michael Schumacher's campaign finance filing as the "Owner of Aviara Farms." He made two contributions to Schumacher's campaign, one for $2,500 on September 12, 2014, the other for $1,760 on October 29, 2014.

Mayor Hall and Council member Schumacher had $9,260 good reasons between them to support their favorite constituent.

As I perused the many other contributions to the campaigns of these two candidates, I noted the number of out of town real estate companies, building and construction firms, and for some unknown reason, the special generosity of the executives of the Rancho Santa Fe Grand Pacific Resorts. I'll leave that mystery to an investigative reporter, if there are any left after the collapse of print journalism.

The willingness to accept significant contributions from out of town businesses shows the hypocrisy of elected officials who blame "outside interests" for the success of a referendum drive. Click here to find the city's web page disclosing campaign contributions.

The San Diego County Registrar of Voters has 30 days, not including weekends, to validate the referendum's signatures to see if there are 6,523, the magic number that will force the city Council to either hold a special election or put Caruso's plan on the ballot in the 2016 general election.

A few years ago, Carlsbad boasted of a $50 million reserve fund, I'm guessing it's grown substantially since then. The city says the cost of a special election would be $500,000. Mayor Hall says it would be a waste of money. Considering what's at stake, I'd say it's a bargain.    

No 'Bird's Eye View' of Nordy's-On-The-Lagoon

Deadline Looms for Vote on L.A. Developer's Plan

While paid signature gatherers raced through neighborhoods representing themselves as concerned citizens on a mission to save the Strawberry Fields, a glossy mailer appeared in my mailbox titled, A Bird's Eye View of the Agua Hedionda 85/15 Plan, with a full color sketch of an aerial view of the site.

Birds apparently can't see shopping centers. The verdant landscape is littered with thumbnail photos of a family at a picnic table, a man picking strawberries, a couple strolling down a path and a guy inexplicably carrying a surfboard, as he walks away from the waveless lagoon behind him. A small amphitheater is nestled amid the lush greenery.

Read the fine print to discover what's missing from the sketch, the "outdoor retail, shopping, dining…promenade." After the Carlsbad city council unanimously approved the plan, despite the promise of its title in the document filed with the city clerk on May 12, "INITIATIVE MEASURE TO BE SUBMITTED DIRECTLY TO THE VOTERS" (my emphasis), it's become clear that birds were not the only ones who failed to see the entire developer's plan.

A promenade sounds far more attractive than a shopping center. To discover what Caruso has in mind, check out the Specific Plan's Visitor- Serving Commercial Development Standards. The 26.7 acres will include 13 acres of building floor space, twice that of the Carlsbad Premium Outlets. The maximum height of buildings will be 35 feet, or three stories high. Protrusions from the tops of those buildings will be allowed, up to 55 feet, to accommodate flagpoles, steeples, elevator housing, architectural towers and wireless masts. A cluster of multi-level parking garages will be included. I could find no limit to the number of three-story buildings permitted on the site.

In addition to Nordstrom and a collection of upscale shopping boutiques and dining facilities, Caruso's promenade will be open to banks and financial services, management and leasing offices, limited office spaces for lease, barber shops/salons, electric car charging stations and travel agencies. The site will rival the city's downtown in shopping and civic amenities.

It makes you wonder how the plan will affect the Carlsbad Village Master Plan, intended to rejuvenate the downtown, since, "competition from modern shopping centers had sucked away much of the area’s commercial vitality." Will we see empty shop windows in the Village when downtown customers are drawn to the lagoon's shops, and downtown owners go out of business because they can't afford the rent to move there?  

The best way to picture Carlsbad's Strawberry Fields Mall is to take a look at the L.A. developer's last creation.

In my last posting here I suggested going to the city's website to find the most accurate description of the plan. I should have directed you only to the official documents found there, with a warning not to stop at the page titled Fast Facts. Be as wary of fast facts as you are of fast talkers.

Here's the preamble to the page: "Chances are, some of what you have heard is not true. The city’s goal is to ensure the community has access to accurate, unbiased information." What follows is a series of answers to hypothetical questions. Here's the answer to the question that gave rise to the Citizens for North County's volunteer-led petition for a vote of the people.

Question: Were voters tricked into signing the petition (to save the strawberry fields)?

Answer: The city attorney's impartial title and summary appeared on every signature page. The summary clearly described what was being proposed under the plan. 

Click on the link and you will find a description of the plan all right, but no commitment to save the strawberry fields, and no warning that five city council members could approve it without a vote of the people. The integrity of city officials can be questioned when they claim signers of the petition were fully-informed when confronted with signature gatherers paid by a developer hell bent on bypassing city voters.

Whether you were tricked into signing the petition, or fully support the developer's plan, I hope you will agree a project of this importance to the community should be able to gain voter support. The petition for a vote must gather enough signatures by September 24 to be put on the ballot in a special election this year, or in next year's general election. If you are a registered voter in Carlsbad and have not already done so, click here to find the locations of volunteer signature gatherers before the deadline.