Judge Refuses to Block Irwindale’s Raider Bond Sale

A Superior Court judge refused Thursday to issue a temporary restraining order blocking the sale by Irwindale of bonds to finance the proposed Los Angeles Raiders stadium, and Irwindale authorities said the sale of $90 million in bonds could go forward as early as today.

Judge Ricardo Torres, hearing arguments in a taxpayers’ suit against the Irwindale-Raiders deal filed Tuesday by Los Angeles City Councilman Ernani Bernardi, said he could not accept arguments that Irwindale’s promise to loan the Raiders $115 million to build the stadium in any way constituted an illicit gift of public funds.

Torres also brushed aside contentions by Bernardi’s attorney, Murray Kane, that the Irwindale City Council had violated state requirements of a bond sale notice when it voted Wednesday night to approve a quick sale.

The judge, however, did set a hearing for Sept. 28 to consider further arguments as to whether he ought to issue an injunction against the bond sale and other aspects of the Irwindale-Raiders agreement.

Bond counsel Charles Green, representing Irwindale, said afterwards that by that date, an injunction would be “a moot point,” because the bonds--totaling as much as $90 million--already will have been sold.

But Kane contended that investors will be leery of buying the bonds before the second hearing and that no sale is likely by that time. “They’d be crazy,” Bernardi’s attorney said of the prospective buyers. “No one in his right mind is going to buy a $90-million bond with this (the hearing) hanging over their heads.”

Irwindale City Manager Charles Martin said, meanwhile, that earlier this week the Meridian Bank of St. Paul, Minn., had agreed to purchase all of the bonds but backed out Wednesday morning after learning of the Bernardi lawsuit.

“Ever since then we’ve been scrambling to (find another buyer),” said Martin, who nonetheless expressed optimism that with Torres’ refusal to issue the temporary restraining order one will be found today.

Paul Ekholm, senior vice president of Miller & Schroeder, Irwindale’s bond sellers, said the Minneapolis-based firm hopes to be able to announce a complete sale of the bonds today.

The Raiders, for their part, appeared sure that the announced move to Irwindale from the Los Angeles Memorial Coliseum will go forward successfully. Raider senior executive John Herrera said after the court hearing that the team plans to open an advance office in Irwindale within a week or 10 days. Team owner Al Davis has expressed hope the stadium can be ready no later than the 1990 football season.

The court hearing was not five minutes old Thursday when Torres gave strong indications of the way he was heading, sharply questioning Kane’s contentions that the Irwindale deal with the Raiders was illegal.

Torres was assigned to hear the case after Irwindale attorney Michael Montgomery filed an affidavit of prejudice against Superior Court Judge Jerome K. Fields, who had originally been assigned.

An Irwindale spokesman later explained that Montgomery had learned that Fields’ wife, Valerie, works as an administrative assistant to Los Angeles Mayor Tom Bradley, who has expressed hope that the Raiders will stay in the Coliseum.

Torres said that issuing a temporary restraining order not only could have made the bond sale much harder but also would have increased its costs.

“I simply don’t find any (legal) basis for it,” he said.

Montgomery and Green told the judge that Irwindale’s financing of the Raiders stadium is no different in essence than Los Angeles’ donation of land to build Dodger Stadium nearly three decades ago. Although the Raiders stadium will be built by a private group, the Raiders, and owned by them, the purpose for which it is being built is public recreation, they said.

The Irwindale City Council on Wednesday awarded contracts totaling $680,000 to four consultants. City Treasurer Abe DeDios will be paid $200,000 for his outside work as a financial adviser on the bond sale. Martin, the city attorney and city manager, will make $130,000 as the project coordinator. Timothy Sabo, an attorney who has reviewed the bond sale and assured prospective investors of its worthiness, will be paid $200,000.

Montgomery was a last-minute addition to the consulting team. He had formerly been the redevelopment attorney in Irwindale and is now a member of the state Fair Political Practices Commission. Montgomery resigned from his city post in 1980 amid allegations that his consulting fees were too high and that he was awarding city contracts to his friends. He will receive $150,000 in consulting fees.

In addition to those four contracts, consultant Fred Lyte stands to make more than $2 million in fees through an existing contract with the city.