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The lead-up to the Coastal Commission hearing on July 14 to determine the continued affordability of 161 Moro Cojo homes has become heated with CHISPA and a variety of Monterey County politicians and leaders claiming that organizations and individuals who oppose lifting the affordability deed restriction are anti-farmworker and uncaring about affordable housing. Monterey Bay Partisan readers will likely be interested that the organizations and individuals painted with this brush include the Sierra Club, League of Women Voters, LandWatch, and by implication, former North County Supervisor Marc Del Piero and many Partisan readers themselves.

You would rightfully be confused at this accusation. It has happened because last fall those organizations and individuals persuaded the Coastal Commission to not accept the January 2016 decision by the Board of Supervisors to allow the homes to be sold at market rate. Coastal commissioners discussed the letters and scheduled a de novo hearing where the affordability requirement could be discussed in depth. That’s happening on the 14th; details can be found at the end of this article.

The accusations are included in letters sent by CHISPA, and in form letters signed by Salinas Valley leaders such as Salinas Mayor Joe Gunter, Gonzales Mayor Maria Orozco, Monterey County Supervisor Simon Salinas, former Supervisor Fernando Armenta, Greenfield political figures  John Huerta and Jesus Olvera-Garcia, Soledad Mayor Fred Ledesma,  and the Most Reverend Richard J. Garcia, bishop of the Diocese of Monterey. As noted, they claim anti-farmworker and anti-affordable housing bias.

The irony is that those organizations and individuals charged with bias were acting to preserve affordable housing, while the organizations and individuals allegedly most interested in affordable housing are acting to convert affordable housing to market rate!

And we’re down the rabbit hole.

At issue is the affordability restriction that  keeps the subsidized homes’ selling prices capped at prices affordable to future qualified low- and moderate-income buyers. That figure currently is $290,000, roughly $100,000 more than Moro Cojo homeowners originally paid. If the selling prices weren’t capped, Moro Cojo homeowners could likely profit by twice that when they sell, netting $200,000 instead of $100,000. CHISPA and 161 of the homeowners want the higher profit and they’ve persuaded Salinas Valley leaders to support them.

The issue began back in 2000-2001 when the Moro Cojo subdivision was developed as an affordable housing project. The approval process was challenged in a Coastal Commission appeal in the 1990s, and later in a lawsuit that was settled by making the 175 single-family homes permanently affordable. The subdivision includes a large park, 90 multi-family units and 175 single-family homes  in the coastal zone near Castroville.

The Coastal Commission’s legal duty at the hearing will be to determine whether granting the application to terminate affordability on the 161 homes is consistent with North County Coastal Plan policies. The relevant policy is remarkably clear and simple:

“LUP Policy 4.3.6.D.1. The County shall protect existing affordable housing opportunities in the North County coastal area from loss due to deterioration, conversion, or any other reason. The County will:

a.) Discourage demolitions, but, require replacement on a one by one basis of all demolished or converted units which were affordable to or occupied by low and moderate income persons.”

And here we have another irony: Using tortured logic, the July 14 staff report claims on pages 13-16 that terminating affordability is consistent with LUP Policy 4.3.6.D.1!

Astoundingly, no replacement units are proposed. This is important. The cost to replace 161 homes at $300,000 each would exceed $48 million. The 161 Moro Cojo affordable homes currently exist. Removing the affordability restriction would help current Moro Cojo homeowners, but deprive future eligible purchasers of the chance for homeownership.

Partisan readers who want the Coastal Commission to keep the subsidized 161 Moro Cojo homes affordable should submit comments to the Coastal Commission by July 7, so commissioners will know Monterey County residents really do care about affordable housing.

If you need convincing about what a great community the affordable Moro Cojo subdivision is, drive on Castroville Boulevard just beyond North County High School. You’ll see play equipment for youngsters and a soccer field in a large public park surrounded by well kept homes. Hopefully, those homes will, as clearly intended, remain permanently affordable to future moderate- and low-income purchasers beyond July 14.

The de novo hearing is scheduled for July 14. It is agenda item 7a on the staff report.

Comments can be emailed to diana.chapman@coastal.ca.gov or snail-mailed to Brian O’Neill at California Coastal Commission Central Coast District Office, 725 Front Street, Suite 300 Santa Cruz CA 95060. Comments should mention Project A-3-MCO-16-16-0017 and arrive by July 7.

Jane Haines is a retired lawyer and long-time advocate for affordable housing. 

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MoneyADDITIONAL INFO IN POTTER SECTION BELOW

While so much attention is focused already on next year’s presidential election, a local campaign is quietly underway locally, the race for campaign money in Monterey County’s 4th Supervisorial District even though the primary is still nine months away.

In first place so far is the incumbent, Jane Parker, who had taken in $112,000 as of June 30, the end of the latest reporting period, but former Salinas mayor Dennis Donohue’s campaign treasury stood at a healthy $65,000 thanks to hefty contributions from the Salinas Valley ag industry.

Donohue, who works in produce, received $5,000 contributions from Fresh Foods of King City, Newstar Fresh Foods, Mann Packing, D’Arrigo Brothers, Gowan Seed Co., American Farms and other ag-related entities, the Nunes Co., A.C. Smith and Massa Trucking.

Donohue received a $1,000 contribution from his treasurer, accountant Warren Wayland, who serves as treasurer for many Republicans.

The ex-mayor’s largest contribution, $10,000, came from Taylor Fresh Foods. A related entity, Taylor Fresh Farms, just opened its headquarters building in downtown Salinas and is reported to have purchased several other buildings downtown with plans to renovate. While he was mayor, Donohue pressed for a downtown makeover. Expect him to criticize Parker for supporting a county decision to buy an office building on the outskirts and move some county workers outside the city center.

Parker’s largest contribution in the first half of the year, $20,000, came from Nancy Burnett, who is the mother of Carmel Mayor Jason Burnett and daughter of computer baron David Packard.

Parker received $10,500 from Brigitte Wasserman of Carmel, $9,748 from Constance Murray of Carmel Valley, $6,500 from Edwina Bent of Monterey, $6,000 from the Babcock Family Trust, $5,250 from Shirley Devol of Carmel Valley and Gordon Kauhenen of Union, Wash., $2,500 from Lisa Hoivik of Monterey and numerous smaller contributions.

While Parker’s district covers Marina, Seaside and a portion of Salinas, she receives considerable support from elsewhere because of her reputation as the lone progressive on the five-member board. She is routinely on the losing side of major development issues.

She did receive some significant contributions from ag interests, picking up $5,000 from Dennis Caprara of R.C. Farms and $5,000 more from Sea Mist Farms of Castroville.

In District 5, incumbent Dave Potter took in $54,000 in the first half of the year, and spent $21,000.

Potter is expected to receive a strong challenge from former United Way executive Mary Adams, who plans to announce her candidacy this fall. Former supervisor Marc Del Piero, who challenged Potter four years ago, also is believed to be considering another run. The district generally covers the Peninsula south of Seaside, Carmel Valley and much of the Highway 68 corridor.

Potter’s contributions came from several directions, including Pebble Beach homeowners, investors, and resort operators.

Potter played a key role in bringing the controversial Monterey Downs horse racing and development proposal to the Peninsula, but there were few obvious signs of support from the horse racing industry. He did pick up $1,000 from Chris Bardis, a key figure in the harness racing industry. Bardis once owned a share of the Los Alamitos racetrack and sat on the state racing commission. He reported receiving $1,000 from Double S.L. Ranch of Lafayette but little information is available about that entity.

Potter received $5,000 from Shanna Fineberg, an interior decorator from Dallas, and the same amount from venture capitalist Jon Q. Reynolds of Piedmont. He received $1,000 contributions from the owners of Quail Lodge, Carmel Valley Ranch, Bernardus Lodge, Folktale Winery and Old Fisherman’s Grotto.

Steve Foster, owner of the Lucky Strike chain of bowling alley/nightclub operations gave $2,000 and the Monterey County Hospitality Association gave $500.

One $1,000 contribution of interest came from Sanford Edward, whose large Dana Point Headlands project went before the Coastal Commission while Potter was a member. The highly controversial Orange County project was approved by the commission on a 7-5 vote with Potter on the dissenting side.

Potter received a contribution of $1,000 from cotton tycoon Sam Reeves, who is fighting an application by a Pebble Beach neighbor to enlarge his home, a decision that will be made by county officials.

In the other district with an election next year, District 1 in Salinas, incumbent Fernando Armenta and his expected challenger, Salinas City Councilman Tony Barrera, haven’t reported any contributions so far.

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Clean Drinking Water The water supply drama continues. Key urban and agriculture representatives continue to hammer away at a mutually beneficial agreement for using industrial wastewater. The Monterey Peninsula Water Management District continues slowly to fortify a backup plan for a desal source if Cal Am falters. It is working with Deep Water Desal on a plan for desalted ocean water at Moss Landing.

Then there is Cal Am’s desal proposal, using slant wells north of Marina. This project is supported by the Mayors Water Authority, most elected officials, and about 16 other interested parties in a settlement agreement that was filed about 18 months ago with the California Public Utilities Commission. I am one of those parties, but I have always been baffled by Cal Am’s insistence on proceeding with slant wells, inland wells drilled on an angle to take in seawater for desalting. Though the technology is intended to minimize the intake of sea life, it is a novel and risky approach with high costs. Why is Cal Am taking this approach? What strengthens Cal Am’s resolve? There are several angles to the issue:

  • Slant wells for potable desal are not operational anywhere in the United States.  Cal Am claimed in a recent report that they are in use in Europe, but it has failed identify any. There is one extensive test site in Orange County with 14 years of effort and test data, but it is not operational.
  • Cal Am has no new water rights anywhere along our coast, and has not applied for any. However it continues to collect data in the Marina area to bolster its plan for slant wells.
  • It appears that Cal Am will use the data and the local water-supply crisis to justify an argument for a “physical solution” (the idea that practical considerations might bypass existing law). However the state Supreme Court disavowed the physical solution argument in a 2000 decision. Will Cal Am challenge that decision and add litigation costs and delay, thus avoiding the need for obtaining water rights?
  • The environmental impact report for the failed regional desal project praised slant wells as the “environmentally superior alternative.” Thus slant wells give Cal Am the imprimatur of protecting the environment.
  • However there are no state requirements for subsurface intakes (slant wells). Granted two very important state agencies – the State Water Resources Control Board and the Coastal Commission – have expressed preference for slant wells as an environmentally superior option, if feasible. There are not extensive criteria for determining “feasibility,” however. There needs to be some practical limit on the cost and amount of time spent on evaluating feasibility. This is a discretionary and subjective determination. So far, we have left it in the hands of Cal Am.
  • Cal Am has built momentum for slant wells to the point that continued investment will be proposed so as to not waste the prior investment. This is a slippery slope.
  • The city of Santa Cruz studied and rejected slant wells as too complicated and too costly.
  • Cal Am ratepayers have paid the full bill for stranded costs from prior Cal Am failures—totaling about $32 million so far, and with another $20 million on the line in legal proceedings ($15 million to $18 million is at stake in litigation with Marina Coast Water District and $3.4 million is at stake in litigation with Monterey County. Ratepayers will be outraged if another failure leads to more stranded costs on our bills. So far the bill for slant wells is probably under $10 million.
  • The mayors have stated that “failure is not an option” on the desalination front. Is this failure of Cal Am, or failure to obtain a new water supply? These two are not linked, or are they?

So why is Cal Am so determined to go the extra mile for slant wells? The answer is “tuck ins.”

Call Public Water Now paranoid, but we see a connection between this project and the defeat of Measure O, which was meant to lead to public ownership of Cal Am’s local operations. Cal Am spent an enormous amount of money to campaign against the measure — about $2.3 million — to protect its local interest. It proved the point that Public Water Now has been making, that the Monterey Peninsula is a cash cow for Cal Am and its parent company, American Water Works.

Public Water Now recently connected the dots with language from Cal Am’s corporate holding company, American Water Works. Its 10-K filing with the Securities and Exchange Commission for 2013 describes the corporate growth strategy to be “tuck ins.”

“Growth of service providers in the investor-owned regulated utility sector is achieved through organic growth within a franchise area, the provision of bulk water services to other community water systems and/or acquisitions, including small water and wastewater systems, typically serving fewer than 10,000 customers that are in close geographic proximity to already established regulated operations, which we herein refer to as “tuck ins.”

—American Water Works 10-K filing with SEC for 2013, page 4.

This national corporate growth policy called “tuck ins,” further documented in other SEC filings, is intended to establish water supply ownership/control/dominance in smaller communities as a prelude to serving the growth potential of that community. PWN contends that Cal Am is overly exuberant for slant wells for one dominant reason: it gives Cal Am a permanent foothold next door to Fort Ord, the Peninsula’s only site of predictable growth in the future.

Now it seems clear why Cal Am is so determined to capture the CEMEX site for slant wells. It is using the fragile justification for slant wells to establish itself in the Fort Ord service area. And do not think its legal battle over the $15 million to $18 million debt of Marina Coast Water District is not playing into this calculus.

This national corporate policy to use “tuck ins” for growth should be a concern to Marina, other Fort Ord interests, and the wider community. It sure will be to ratepayers.

Riley is the managing director of Public Water Now and a longtime advocate for public ownership of water utilities.

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