Hermosa Paid Water Bill of Shopping Mall for 12 Years

The City of Hermosa Beach paid the water bill for 12 years for a small shopping mall that until recently was owned by former Councilman Jack O. Wise, city officials said this week.

The city is conducting an internal investigation and reviewing old bills to determine how much the city paid for water at the Loreto Plaza shopping mall on Pier Avenue, said City Manager Kevin Northcraft.

“It may exceed $5,000,” he said.

Wise, 62, who served as a councilman from late 1967 to 1974, said he did not know there was a question about the water bills until his real estate agent contacted him at the request of The Times.

‘Don’t Know Anything’

“I don’t know how this occurred. I don’t know anything about it,” he said in an interview.

“I’m not out to try to take money from the city,” he said. “. . .I’m a millionaire. I’m not worried about $25 a month.”

Wise, who now lives in the desert community of Indio, said his wife, who died about two years ago, managed the property and paid the bills. He said he owned about 20 developments in the beach cities at the time.

He has not reviewed his records on the mall, he said, but he thought one or two of the tenants were responsible for paying the utilities for the six-business mall.

“I have no qualms about paying the city any money, if they can verify that they paid it and I didn’t,” Wise said.

Northcraft said the city probably will ask Wise to repay the money with interest.

Land Swap

City officials suspect the billing problem occurred because of a land swap between Wise and the city in 1975. Wise got a lot that had been a city park, and the city got a lot that divides the two-building mall and is used as access to public parking lots.

City officials said a water meter has been on the lot of the former park since 1966 and speculated that the billing had never been changed.

Wise sold the mall last July to Jerry and Leslie Newton. In January, a mall tenant received a notice, addressed to the city, that the water was going to be disconnected, Leslie Newton said. The city found out at the same time when it received a similar notice, an official said.

Newton said she then paid a $107 bill for the previous two months and had future bills sent to her. Newton said they are willing to pay the city any money they may owe for water used after they bought the property.

Northcraft said the city is auditing all the utility bills it pays “to find out if there’s any other skeletons in that closet, and we’re starting an annual audit of all of those . . . (so) that if there was a significant error, it would be caught sooner than 12 years down the road.”

The city’s water bills were audited several months ago and two problems were discovered, Northcraft said, adding: “Unfortunately, this wasn’t one of them.”

The errors that were discovered included a water leak that caused a bill to increase significantly and a disconnected meter on which the city continued to pay the minimum service fee, he said.

Although the city staff has been investigating the problem at the shopping mall since January or March--accounts vary--the city manager and the City Council were not told about the billing problem until this week.