Santa Ana Official’s Condo Deal Questioned

As the Santa Ana Planning Commission finalized details of a controversial 37-story office tower this year, the developer took a deposit on a luxury condominium in Hawaii from one of the commissioners in a deal he says could net her a small fortune.

Then, 10 days after voting to approve plans for One Broadway Plaza’s ground floor, Planning Commissioner Victoria Betancourt took off May 5 for Honolulu on the developer’s private jet.

Betancourt said this week that she initially didn’t consider the condo purchase, free ride on the jet and two-night hotel stay conflicts of interest.

She said developer Mike Harrah, who owns 56 buildings in downtown Santa Ana, offered her the trip to see a condo she had reserved from him at market rates months earlier.

Harrah said he sold the $890,000 condo unit to Betancourt and a second one to another city official. The Santa Ana investors, Harrah said, stood to “make hundreds of thousands of dollars” by buying the condos before his Honolulu project was completed and then reselling the units.

“Is that against the law?” asked Harrah, who has gained attention in Santa Ana for both his aggressive redevelopment strategies and long gray beard. “I wouldn’t exactly call that a crime.”

Critics, Harrah said, “should mind their own business and spend more time working toward the development of their city.”

Betancourt said she hadn’t thought about the potential conflict of interest during her April 24 vote on One Broadway Plaza because she hadn’t yet taken the trip to Hawaii.

“I’ve [now] contacted the city’s legal department, and if I have to, I will pay” for the trip, Betancourt said. “I don’t want to do anything that would cast a spot on the commission. I want to do things properly.”

Robert Stern, president of the Center for Governmental Studies in Los Angeles, a nonpartisan think tank, said Betancourt probably didn’t violate state conflict-of-interest laws. But, he said, her actions were ethically questionable.

“Clearly, if you are voting on a project, you should give the appearance that you have an impartial view,” Stern said. “If you are participating in a purchase, you are creating the impression that you are not impartial. It may still be legal, but it doesn’t look impartial.”

State law prohibits elected and appointed officials from voting on matters in which they have an economic interest or, before votes, from taking gifts valued at more than $360 from those with business before the city.

Harrah said two other Santa Ana civic activists -- Alfonso and Patricia Bustamante -- also bought a condo from him and were on the same flight to Hawaii as Betancourt.

As a member of the city’s Historic Resources Commission, Alfonso Bustamante votes on development projects that involve historical buildings, a specialty of Harrah’s. Bustamante has not voted on any Harrah projects since his appointment in 2004.

Bustamante’s wife, Patricia, helped get signatures of support two years ago for Harrah’s 37-story office building from many Spanish-speaking residents who later said they did not understand what they were signing.

The Santa Ana group attended a groundbreaking ceremony for Harrah’s Pinnacle Honolulu, a 39-unit condo that occupies 36 stories. Most of the condos have private-elevator access. Some cost as much as $5 million, Harrah said.

Betancourt and the Bustamantes paid the basic $10,000 deposit to reserve their condos, Harrah said.

The Bustamantes couldn’t be reached for comment.

Although Harrah and Betancourt said there was no special deal for her, Stern says it’s important for the public to be assured that Harrah is not “selling the condos to these people for a special rate.”

The details of the condo deals have not been disclosed.

Betancourt served from 1999 to 2005 on the Community Redevelopment and Housing Commission. She was named to the Planning Commission by Mayor Miguel A. Pulido in 2005.

Paul Giles, president of the French Park Neighborhood Assn. and a longtime Harrah critic, said the business ties between the planning commissioner and developer were troubling.

“I think that our officials should not just comply with minimum ethical requirements,” said Giles, who is also chairman of the Historic Resources Commission. “They should be examples of high ethical practice. [Making] deals with people that have business before a board or council should be out of the question for anyone who sits on such a board.”

Harrah still has several matters pending before the commission regarding One Broadway Plaza, a project approved by the Planning Commission and City Council in 2004.

The development’s height and square footage angered some residents so much that they tried to block its construction through an unsuccessful ballot measure.

In the coming months, the Planning Commission is scheduled to vote on design elements and landscaping for the project, said Jay Trevino, executive director of the city’s Planning and Building Agency.

This is not the first time Harrah has been at the root of conflict-of-interest accusations. City Council member Claudia Alvarez was the target of conflict-of-interest accusations by tower project opponents for receiving $3,200 in contributions from Harrah before voting for the project. Alvarez said she was told by the city attorney that there was no conflict of interest because the money was for her failed run for Assembly.