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After 35 years in public education as a university administrator and a high school English teacher, I began my second life as a freelance writer, winning San Diego Society of Professional Journalists awards for my opinion columns in the former San Diego daily North County Times and the San Diego Free Press.

Saturday, September 26, 2015

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included a detachable, postage-paid card to return to the city clerk for signers of the referendum to have their names withdrawn.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.    


  1. Thank you Richard for a wonderful article. Did your research include a nonmonetary donation from Russell Grosse in Oct 2014? It was nearly 20k. It's says the contribution is for a fund raiser. Grosse is described as a self employed real estate developer. I believe he is the owner of Foursquare Properties, big developer?

    1. Thanks for calling attention to Grosse's generosity. Yes, I saw that, but I couldn't draw a direct connection to the Caruso project, so saved that for a later article if I can find out more about Foursquare Properties and build a case for the next election cycle.

  2. I couldn't either, but I wasn't ready to give up yet. But I did find this: http://www.thecoastnews.com/2015/07/09/final-draft-update-planned-residents-protest/

  3. A bit off topic for the Caruso project, but do you have any ideas why the city has gone through three city managers in three years?

  4. Good research, FlipFlop. We wanted to know what FourSquare is up to, as well.
    Also to note: Those campaign contributions to Hall - he ran unopposed...

  5. Will send more as I find it. Off to work......

  6. Here's a story I wrote about city manager Hildabrand's departure in 2012 http://www.carlsbadistan.com/?p=11232. Note her severance pay. At the time she was fired I had a mole source on the council who explained she "retired" after her annual performance review. Hildabrand embarrassed council members when she told a meeting of city employees they should be ok without getting a pay increase because they live in such a beautiful city, not recognizing that many of them couldn't afford to live there.

    Coates was hired as an interim appointment to replace her, to serve until a permanent appointment could be made after a national search. The national search resulted in Sarkozy, who was a disaster in his previous job as city manager in Bellevue, WA, according to my source in the Bellevue police department. Guess he was an impressive candidate in all but prior job performance. I'm sure he got equally impressive pay for walking out the door.

  7. Thank you again Richard for the story about the city manager. Not sure how this fits - and you probably already saw this, but I will forward to you just in case. This story shows the link between Grand Pacific and Carlsbad. So I'm guessing a 45 foot 4-story hotel is likely in our future, even though this article doesn't come out and say it. Also of interest is the location.

  8. I am interested to know more about the alleged tactics of the mayor and his attempts to prevent city employees from supporting the referendum. Is anyone looking into this, as it would be a very serious offense.

  9. Hi Music Muse. Where did you see this?

  10. Richard, do you have any stories about what happened to the city of Arcadia when Westfield and Caruso decided to start taking punches at each other?. I was aware that Westfield filed a lawsuit against Caruso, however I was not aware that Caruso also filed a lawsuit against Westfield and the City of Arcadia regarding Westfield's request to convert part of their mall to restaurant space. I would say Carlsbad is next. Both parties claimed that the other didn't do a proper environmental impact study. Ironic, ain't it? The battle went on for a long time, with the City of Arcadia in the middle. Here is one of the articles I found from 2009: http://www.arcadiaweekly.com/featured/caruso-sues-city-of-arcadia-and-westfield-over-expansion-plans/. I see that Caruso withdrew plans to build his mall in 2011. Thanks again for your fine work. I'm new to your blog. Trying to catch up.

  11. Welcome, FlipFlop! The only thing I know about the Arcadia plan is that Westfield mounted a campaign against Caruso, joining a citizens grassroots drive similar to ours. I wouldn't put anything past Mr. C, but Westfield had nothing to do with our citizens-led referendum campaign, so I don't know how they could sue them or Carlsbad. Haven't read the link you included, but will do so now.

  12. Just read the article and it looks like it was written before Caruso withdrew from its planned mall, so just part of the fight. Assuming we have the signatures validated, don't think there's grounds for any lawsuits before the vote. O course, the closest I am to legal issues is being the brother of a judge in another state. :)

  13. I can only imagine that a FOIA request to Carlsbad to see all the communications between the mayor/city council and the Caruso people would be enlightening. Other cities that have been hit by similar requests have retaliated by threatening to charge outlandish sums for the "time" to gather responsive documents, and I can only imagine that Carlsbad would do the same given the lack of class and integrity the mayor/council have shown to date.

  14. The City plans to tear down the power plant on the other side of the 5. I'm sure a large resort developer would love to have first dibs on that land....

  15. Thank you Richard (and flip flop). With more bold reporting the fog of lies will clear and public apathy will disappear on this issue.
    A little more research might stir up a Larger entity to investigate, which would permanently lift the blankets on these scofflaw wealthy miscreants and corrupt public officials and show how they all actually fit together.

  16. Since Mayor Lewis ain't coming back, I think it's time to figure out what to do about current leadership who seem cozier with developers than voters.

  17. Maybe make a sizable contribution to Matt Hall's campaign? Could level the playing field and throw him in a bind deciding who to favor? (Just kidding, of course. I want him out of office).

  18. FlipFlop, Just got a tip that Caruso is doing a focus group today, probably to figure out what his spin will be in the campaign for votes in a special election. I wasn't invited, for some odd reason. I'm guessing Jimmy U. may not be featured so prominently this tlme around. That lie doesn't have legs.

  19. Hi Richard. Been working the past week. Missed your post. A friend of mine told me this afternoon that the Caruso group called them with a survey asking how they would vote. My friend said she kept them on the phone for 1/2 giving them an earful. Another one of her friends was called as well. Caruso group got the same wrath. We are standing by ready to pummel all of them with digital strawberries. I also didn't realize that Michael Gazzano of Caruso Afilliated, is on the board of directors for the AHLF. I must be slipping. Another conflict of interest.

  20. In addition, one resident said she got a call regarding a survey about city services, and the job that the city council was doing. Not sure who is making those calls yet. The resident said she tried to find out who was paying the caller to take the survey, but they wouldn't say.

  21. Good to hear from you, FlipFlop. Would it be easier to communicate more directly by email? Mine is richard_riehl@yahoo.com. I know the city conducts an annual telephone annual survey of city services, but I think it's generally done in August. I just emailed Kristina Ray, the city's PIO, to check this out.

  22. Here's the message I just received from the PIO:

    Kristina Ray
    Today at 8:38 AM
    "Yes. It is just wrapping up. It's our annual survey. We always do it around the August - October timeframe. On years when there isn't a November election, like this year, we tend to do it a little later. It's primarily used to give Council members information prior to the annual goal setting session, which is typically in January or February."

    So, FlipFlop, I'd love to hear more about those mysterious telephone calls. Could be of interest to readers.

  23. Thanks Richard. Will email me you directly as I get more info. Same friend also sent me a link to the article that appeared in the the Seaside Courier about the lawsuit from North County Advocates. Guessing you saw that?