Big Bucks From Developers Can Be Mixed Blessing

With a host of local elections and a potentially controversial ballot measure looming on the Orange County political horizon, observers of varied political views agree that the outcomes could depend largely on how the development community plays its cards.

“There is tremendous influence in the political contributions by developers,” said Tom C. Rogers, a slow-growth advocate from San Juan Capistrano. “The question is whether that money will start having a greater negative impact.”

Recent Orange County political history is dotted with examples of voter antipathy toward the development community:

- In February, Mission Viejo residents overwhelmingly defeated an attempt to recall City Councilman Robert A. Curtis, despite nearly $500,000 in contributions from the Mission Viejo Co. and other developers.

- Last fall, even $2.5 million in contributions--the vast majority from builders, developers, real estate firms and construction companies--wasn’t enough to win the hearts and minds of county residents, who voted 53% to 47% to defeat Measure M, a proposed half-cent sales tax for transportation. Low turnout hurt that measure, but even supporters concede that developer participation may have caused some backlash.

- And in the current Irvine mayoral race, developers are thought to be so unpopular that each candidate attacks the other by suggesting that the opponent is friendly to the Irvine Co.--and in turn is supported by the large landowner.

“Is there a backlash against developers in Orange County? To some extent, yes,” said Harvey Englander, a Newport Beach-based political analyst. “I don’t know how much there is, but it’s out there.”

Developers themselves have sometimes tacitly acknowledged the potential for that backlash. In a recent statement, the Irvine Co. noted that it has chosen to refrain from contributing to candidates in cities where it does business “because we realize our company is an easy target of campaign demagoguery.”

Yet, despite the political risks associated with taking money from developers, they remain far and away the county’s most important special interest. According to a wide variety of observers, that’s because other companies are reluctant to play an active role in local politics. Thus, developers remain as Orange County’s only ready source of campaign cash.

That creates a double-edged sword. Political advocates need development money to get their message across, but taking that money can make voters less receptive to the message.

“If you’re looking for campaign money in this county and you don’t want to get it from developers, you’re in trouble,” slow-growth advocate Rogers said. “Otherwise, your source of funds is limited to homeowners, and they give $10 at a time, not $10,000.”

John R. Simon, a Newport Beach lawyer who represents developers and rarely finds himself in agreement with Rogers, nevertheless concedes that developers hold most of the political purse strings in Orange County. “I’ve tried to raise money out there, and believe me, no one else is giving in big amounts,” he said in a recent interview.

Banks, law firms and aerospace companies play significant political roles in some communities, devoting large sums to campaigns. Orange County boasts many of those companies, but they tend to be based elsewhere and focus their political contributions on their home districts.

“The development industry is just so overwhelming, everything else is dwarfed,” Englander said. “We don’t have any of the big banks. And the law firms that play a big role in L.A. only have branch offices here.”

And even those companies that are based in Orange County often have agendas that reach far beyond the county’s borders.

“The developers have a great interest in the decisions that are made locally, so that’s where they focus their attention,” said one aerospace company executive who asked not to be identified. “Local issues are important to us, too, but so is defense spending.”

The result is that non-development firms tend to play a relatively insignificant role in local campaign financing, ceding the dominant political role to area developers, who have eagerly accepted it.

The Orange County supervisors, for instance, get hefty donations from the development community. On his campaign disclosure form filed earlier this month, Supervisor Thomas F. Riley, longtime South County representative, listed thousands of dollars in contributions from area developers in the past three months alone.

The Koll Co., Santa Margarita Co., Birtcher, Bridgecreek Development Co., Trammel Crow Co., Kathryn Thompson Development Co. and Property House Realtors are among the firms represented on Riley’s list of contributors, some through corporate donations, others by individual officers. The contributions vary from a few hundred dollars to $1,000.

Sometimes the contributions are more subtle: Both Riley and his colleague, Board Chairman Don R. Roth, list lunches, dinners, food baskets and other gifts from the development community on 1989 statements of economic interest.

“I can see how this makes good reading for somebody’s hit piece,” Riley said of the contributions and gifts. “But the one thing that I value is my integrity. I’m very careful about staying within the limits, and I’m always ready to go out and talk about this to people.”

Riley added that developers contribute to his campaigns not because they are interested in manipulating the political process, but because they are close to the community and care about its affairs.

Irvine Mayor Larry Agran, a slow-growth advocate whose campaign financing is largely drawn from homeowners and environmental groups, was less sanguine. He deplored what he called the “tendency to rely on the rough-and-ready development community for funds.”

Part of the blame for that, Agran added, falls on trade unions, political parties and environmental groups who have done little to build funding mechanisms of their own. The result, he said, is an “undue reliance on developers who are willing to spend money in political campaigns.”

And despite the recent setbacks for developer-backed initiatives, developers by no means always lose. In 1988, the countywide Measure A race brought the development community to the ramparts, and it succeeded in turning the tide against the slow-growth proposal.

“I think political races are based on issues,” said Wendy Wetzel, a spokeswoman for the Mission Viejo Co. “In some cases, who’s backing a position becomes an issue, but the development community has backed some issues that won and some that lost. I don’t think you can make generalizations.”

Still, even most developers and their supporters agree that huge campaign contributions can create problems, leaving a proposal or candidate vulnerable to populist attack.

That dilemma will face backers of a Measure M rematch in November, if that election goes forward as planned, and will equally affect candidates in upcoming county and municipal elections.

For developers, the solution to the quandary is not simple. The building industry is eager to press for transportation improvements and other causes--some of which appear to enjoy much popular support. But its involvement gives opponents room to launch attacks on those issues, solely because developers back them.

“What do you do?” asked Mike Lennon, community affairs director for the Orange County Building Industry Assn. “You’ve got to follow your conscience, but there are certain elements out there who will use the community sentiments to portray themselves as Davids.”