Tustin Council Fight Starts Recall Talk; Hotel Plan in Doubt

A rancorous battle raging among members of the Tustin City Council may have led to the loss of an important hotel project in the city and may result in a recall campaign to oust at least one of the two outspoken councilmen who opposed the development.

A group of 20 Tustin residents, including homeowner association leaders, met Monday night and considered during a closed-door meeting whether to begin a campaign to oust council members John Kelly and Earl J. Prescott. Afterward, a spokeswoman said the residents decided that they first need to raise public awareness about the councilmen’s actions.

The move toward a possible recall follows the Marriott Corp.’s backing out of the proposed Promenade redevelopment project. That development, planned for a site just south of the Santa Ana Freeway at Newport Avenue, would have included a 105-room Marriott Hotel, a Carl’s Jr. restaurant, plus office and retail space.

The proposed hotel, which would have offered moderately priced rooms, was expected to have generated about $3 million in revenue for the city over the life of the project.

With Marriott pulling out, the entire project is dead, according to City Manager William A. Huston.

“It could be some time before you see another project this good,” he said.

At issue in the Promenade plan was the proposal for a $1-million property tax rebate to the developer. Kelly and Prescott, who bitterly opposed the city subsidy of the Promenade plan, had called the project “a scandal” and a “million-dollar raid on the city treasury . . . to line the pockets of rich developers.”

It was that kind of rhetoric, plus a growing dissension among council members, that may have led to Marriott’s backing out, some city officials speculate.

“It’s conjecture because we have nothing formally (from Marriott), but we were told verbally that a factor was the controversy (on the council),” Huston said.

City Councilman Ronald B. Hoesterey, a supporter of the project, said, “I feel sad for the city of Tustin that their (Kelly’s and Prescott’s) shenanigans may have been the final straw” in Marriott’s decision to drop its plans. Hoesterey had joined forces with Mayor Ursula E. Kennedy and Councilman Richard B. Edgar in the council clash.

“I’m also sad,” Hoesterey said, “that this type of embarrassment has been brought to our community by the actions of these two individuals. I’m concerned about the long-range effect it will have on the overall reputation the city of Tustin has in the state. We’ve always been known as a dignified city. Now there’s a black eye on the community,”

Kelly and Prescott said they are proud that their relentless opposition to the Promenade project may have led to its death.

“I’m thrilled,” Kelly said. “We didn’t just lie down and take it from the council majority. We went out and let a lot of the folks know how upset we are and that we saw it as a misuse of public funds.”

Hoesterey argued that the Promenade project isn’t all that is at stake in the matter. He contended that the political climate that may have led to Marriott’s backing out may also scare away other developers who were interested in doing redevelopment projects in the city.

Marriott officials familiar with the proposed Tustin project could not be reached for comment. Cody Small, a spokesman for the developer, CMS Co. of Costa Mesa, refused to say exactly why Marriott pulled out.

“It’s real sensitive. I have no comment on it,” he said. “Right now we are trying to come up with another plan to work with.”

But City Manager Huston said: “The whole deal was based on a package. With the hotel pulling out, the economics from our standpoint aren’t there. The developer may want to resubmit, but anything less than the proposal talked about for 1 1/2 years will not get support of our staff for redevelopment assistance.”

Christine Shingleton, the city’s director of development, said Marriott officials also had other concerns about the project, stated by the developer, and a “thin line was holding it (the deal) together. It wasn’t their most exciting site . . . because of its size and shape,” she said.

In addition, she said, the market value was too high--more than what Marriott wanted to pay for the land, which may have required the developer to spend more money. “The developer was saying it could be a money loser.”

Whatever the reason for the loss of the hotel project, a residents group Monday night met to discuss whether to begin a recall effort against Kelly and Prescott. The newly formed group, Citizens for a Responsible Tustin Council, asked for the two councilmen’s resignations at the City Council meeting.

“We absolutely deplore Kelly’s attempt at the last meeting to muzzle citizen input, and we object to Prescott and his actions,” said Marge Kasalek, who hosted the meeting in her Peppertree home. “It’s a matter of getting this out to the public and then, very possibly, recall is a next step.”

Kasalek said if the public information campaign does result in a recall effort, it will likely be aimed at Prescott, whose term of office expires in 1992. Since Kelly is up for reelection in 1990, the group will instead try to find candidates to oppose him, she said.