JOHN R. SIMON : Mr. Defense for Builder Groups : More Than Money Beat Growth Measure, PAC Chief Says

John R. Simon had never even worked on a city council race when he began organizing Citizens For Traffic Solutions, a political action committee that raised $2 million to beat Orange County’s slow-growth initiative.

Widely expected to pass because of voter frustration with the county’s clogged roads, the initiative intimidated many of the builders and developers Simon tried to rally early this year.

Then, on June 7, the initiative lost so overwhelmingly--56% to 44%--that it surprised even Simon and his political consultant, Lynn R. Wessell of Los Angeles.

The initiative would have required developers to improve nearby roads to handle the traffic from their developments in unincorporated areas of the county.

But Simon and the building industry said the requirements were unreasonable. They argued that the initiative was really a thinly veiled bid to stop construction in the county.

The debate drew national attention.

With their $2-million campaign fund--75% of it contributed by builders--Simon and Wessell overwhelmed initiative supporters, who raised just $70,000. Citizens for Traffic Solutions hired at least 1,500 paid campaign workers, mailed a blizzard of pamphlets, bombarded the county with radio ads and placed calls from four phone banks to about 250,000 voters.

Their main argument: The initiative would make traffic worse, not better, because it would curtail home construction, an argument that initiative supporters called an outright lie.

Assuming all home construction stopped, Simon and Wessell argued, the county would lose an important source of funds for new roads: the fees the county charges developers for each home they build.

Simon, 48, is now back at work as a real estate lawyer. He runs the Newport Beach office of the large Los Angeles law firm Sheppard Mullin Richter & Hampton.

In an interview with Times Staff Writer Michael Flagg, Simon discusses the role of the county’s building industry in the defeat of the initiative, the outlook for similar growth measures on the November ballot and possible increases in gasoline taxes to pay for road improvements.

Q. How would you respond to the statement by supporters of the initiative that the developers bought the election with huge contributions to the campaign?

A. Elections in this day and age cannot be conducted without the expenditure of money. We have a large county, over a million registered voters, over 2,000 precincts and more than 800 square miles.

To get the message into people’s homes, either by telephone, by mail or by precinct walkers, you had to spend money.

Yes, we conducted an election campaign, and yes, we spent money. But I believe that had they spent as much money as we did, they would have still lost, because they didn’t have the issues on their side.

Q. But isn’t there inherent unfairness with that much money stacked on one side, so that really only one side is able to get its message out?

A. Well, there’s really an inherent unfairness in the initiative process on the other side. The other side took advantage of an emotional issue--traffic--and (got) people to believe the initiative would fix freeway traffic. So we had a lot to overcome.

Now if they had the support they said they had, they could have raised a significant amount of money. We have, on the other hand, a very large hard-core constituency because it’s our jobs, our families, our livelihoods. We were therefore able to raise large amounts of money.

Q. But in large amounts from a small number of wealthy contributors, right?

A. Well, we had 465 contributors. And keep in mind that the developers are in business like anybody else. They have large numbers of employees. They employ large numbers of subcontractors and suppliers, all of whom depend on the continued viability of the development industry for their livelihood. We had lots of small contributions too.

Q. Are we likely to see a lot more big-money campaigns by developers--in the Riverside County initiative election in November, for instance--as these initiatives pop up on ballots around Southern California?

A. I anticipate they will conduct a similar campaign to ours as people see what works, and they continue to follow the pattern.

That election is just as important as this one was, and I expect you will see a full-fledged campaign. And, as I said, they cost money.

Q. We know there was a lot of discussion about whether to use a lot of developer money and its potential political impact, both inside the campaign and among the big developers themselves. When did you decide to take a chance by accepting contributions from developers?

A. When I learned about the initiative in the fall, I called people who were my clients and people in the (building) industry that I knew, and they felt at that time that were they to get involved it would assure victory for the initiative. They feared there would be a voter backlash against developers.

But when we hired (political consultant Lynn R.) Wessell, he said it didn’t make any difference where the money came from, and I think he was proven correct by the campaign.

The watershed moment was April 6, when I told a group of the larger developers (among them the Irvine Co., William Lyon Co., Santa Margarita Co. and Mission Viejo Co.) that we were going to have a campaign, and we didn’t have any more time to weigh that decision, and I needed them to commit. I had a proposed budget at that time of three quarters of a million dollars from the residential builders, and the group of them committed more than that, and the campaign was off and running.

And the reality was that there is no significant money from the non-development community available for this issue.

Q. Isn’t it likely that a major part of the initiative’s defeat wasn’t due so much to your campaign strategy as it was to the proponents’ lack of organization and their inability to get out their own voters?

A. That’s clearly one of the reasons we won, though I think we would have won even had they been well organized and run a decent campaign. Clearly, the fact they didn’t was helpful to us and proves the point that they really don’t have much of a constituency.

There are a lot of citizens who are sympathetic to the message that we ought to have slow growth, but that’s not what I mean by a strong constituency. I mean dedicated people who are willing to go out and work.

Q. How much of a crimp has this put in the slow-growth movement in Orange County and Southern California?

A. Had they won, they were all set to go big statewide. They had a press conference scheduled for the next day, and fortunately, from our perspective, they didn’t have anything to say at that press conference.

This was going to be the launching pad for a big statewide movement. I don’t mean just a movement to have growth initiatives all over the state, because they’re there already. What it was going to be was a launching pad for a political movement. They were going to go after politicians who they felt were not sympathetic to their view and try to elect their people everywhere. I think we really stopped them in their tracks for a while on that score.

Q. It was essential for you to get other industries involved so the campaign wouldn’t look like a proxy for developers. Yet companies outside the real estate industry were wary of taking sides in what they perceived as a divisive and emotional political issue. How did you get banks like Wells Fargo and Security Pacific and aerospace companies like Hughes Aircraft and Rockwell involved? Will they be more likely to get involved in growth issues in the future?

A. One of the things I want to do is follow up with those companies to involve business in the growth issue. They’ll be the ones hurt if this state shuts itself down. I’m going to get the people together that I talked to during the campaign and say, let’s get together and figure out how we can do something on an ongoing basis so we can be effective in promoting our side of the story when these issues come up.

I’m going to keep Citizens for Traffic Solutions alive and viable as a political action committee to disseminate information on this issue from time to time. I hope the issue goes away as a political issue. But we have to assume that it won’t.

Q. Is the political action committee going to be getting involved in the local initiative campaigns in Huntington Beach, Costa Mesa, Newport Beach and San Juan Capistrano? What will it take to defeat them, and are we likely to see the same sort of campaign against the initiatives in those cities? Aside from San Juan Capistrano, won’t the practical effect of the initiative in these cities be close to nil, since they’re already largely built out?

A. I certainly will make myself available to help, should I be asked. But those are local elections, and I think the people who are going to lead the fight have to be based and live in and work in those areas.

I think people will probably look at our campaign and say this is the kind of thing that works. And it’s easier to do and less costly to do in a more confined area.

The main issue in Huntington Beach and Costa Mesa is commercial and industrial development, not residential. And there can be a large impact on the ability to go forward (with) the commercial and industrial projects in those cities.

Cities today need all the revenue they can get, and there’s more revenue in commercial and industrial development than there is in residential development. San Clemente is a prime example of how a slow-growth measure has ruined the economy of a city. They’re a million bucks in the hole and they don’t have a tax base of commercial and industrial development because they stopped it.

Q. But they don’t have every hillside covered with houses either, right?

A. That’s a value judgment, isn’t it? My values are a little different. My values say that we have to provide for people, that people are more important than hillsides.

Some hillsides are a good thing, and we have all kinds of programs for the dedication of land for park purposes. We’re going to have to allow for change in the landscape, just as we provide for change in other things. And we need the land for housing.

Q. Even had the initiative passed, builders had permission to build more than 62,000 houses in the southern county under development agreements with county government. Are the lawsuits against those agreements a sideshow at this point or are they still a serious threat to developers?

A. I think for the most part that the lawsuits are moot because the development agreements were designed to allow development to proceed if the initiative passed. The initiative hasn’t passed, so if the development agreements are somehow declared not to be valid, it’s not going to have much effect at all.

Now you have to factor into that the fact that the county is doing a growth-management plan, which incorporates some of the concepts that were in the initiative. If the development agreements were to fail, those developments would have to comply with that growth-management plan, whatever it turns out to be.

I think that plan in its present form is not only livable but something that is good and is not going to be a problem for almost all those developments to comply with. So I suspect the plaintiffs in most of those lawsuits will drop them. They don’t have the resources; they don’t have the money to fight on all fronts.

Q. Early on in the campaign you said the initiative was not so much about growth as it was about the county’s political have-nots trying to oust the haves. Now that it’s over, do you still believe that’s the case? And have people like (slow-growth leader) Tom Rogers been decisively routed, or will the battle next be fought on some other front, possibly the recall campaigns against Supervisors Harriett M. Wieder and Thomas F. Riley?

A. I think that the people who were behind the initiative had their own agendas. Rogers can’t deny he doesn’t have political ambitions. He wants Riley’s seat.

You know, (slow-growth leader) Russ Burkett went around saying: “This isn’t about roads, it isn’t about traffic, it’s about power.”

And I think the statewide movement is the same thing. They want to throw out existing politicians and put in their own people.

As for the two supervisors, they ought to have the opportunity to serve out their terms, and if the people don’t want to reelect them, they shouldn’t reelect them. I don’t see they’ve done anything that’s so egregious that we should throw them out of office. I think recall should be used for serious transgressions, like fraud in office.

Q. Do you think the defeat of the initiative has sent signals to county and city politicians--many of whom get large campaign contributions from developers--that they can have a freer hand in approving new development now they know there’ll be fewer political consequences, at least for a while?

A: No, I think just the opposite. I think the initiative served a useful purpose, it got a message out, and the message is that the people are frustrated, they want something done, and I think all the politicians have that message, and they will do something about the problem.

And the development community has the message. We know we have to build the infrastructure to support new development. I don’t think that the defeat of the initiative means carte blanche at all.

Q. It’s been said for some time that you’d like to talk the initiative supporters into a deal under which the building industry would support an initiative with some form of growth limits if the initiative also included a new tax or other source of revenue to build new roads, which would shift some of that financial burden off builders and the new-home buyers to whom builders pass their expenses. What’s the likelihood of such a rapprochement between the two sides? Will you be working on that at all now that the campaign’s over?

A. I don’t expect it out of Rogers because he has his own political agenda. But I do think that there’s going to be a new leadership that’s going to come forth from that group and that will want to go forward in finding a funding vehicle for some of the things we need to have.

I don’t think it’s any of the leadership that was there. I hope in this county we’ll be able to pass a half-cent sales tax to provide money for these improvements. (The sales tax has) been passed recently in a lot of places, so that gives us a lot of hope. This year is probably is too soon, but maybe in 1989 we can get something accomplished.

I think we need to do something that gives people confidence in this program we’re going to put in place. I don’t think the electorate, particularly in south county, is going to be satisfied with nothing further in the way of a formal program. We need to have that, the industry is behind that and the county’s growth plan seems to be making very good progress.

Q. Once the election was over, we saw a lot of professions by developers and builders that they had gained some “breathing space” to fix the county’s roads before the next great wave of public discontent with the traffic mess. What do you think they are going to do during this breather, or are they saying that sort of thing for form’s sake?

A. I think they’re trying to figure out how to put their money where their mouth was and move forward with a program.

Every dollar the builders put in the ground for improvement, somebody else pays for. And what’s really happening here is that the new-home buyer is paying more than his fair share, and that’s not fair.

You can’t put all the problems of the past on the backs of new-home buyers. The fees on a new house add close to $30,000 to the price of a house now, and the affordability problem is a real problem. I’m not talking about affordable housing now, low-cost housing, I’m talking about any kind of housing, anybody trying to buy a house in this county.

And we can’t keep raising fees to pay for infrastructure that we didn’t build in the last 20 years.

So I think the industry will conduct a public information service to get the facts out to people, leading to an eventual public attitude of, “Let’s pass a funding vehicle in this county so we can have some of the things we want.”