Agran Given Hotel Discount by Backer

In a deal arranged by an Irvine developer and supporter of Mayor Larry Agran, the campaign to reelect the mayor is paying at least $50 less than the daily room rate to locate its headquarters at a hotel in which the developer has an interest.

Under an agreement set up through Michael Ray of J. Ray Construction Co., Agran has rented, for $6.50 a day each, two hotel rooms at La Quinta Motor Inn, where rates for the average guest begin at $58 a day for long-term occupancy of a single room.

“Michael Ray is not doing me any favors,” Agran said. “I am satisfied personally that this is a market rate, arms-length transaction that would be attractive to any entrepreneur under similar circumstances seated on the other side of the table. . . . To talk about this as hotel space is absurd. We are not occupying them as hotel rooms.”

According to the state Political Reform Act, granting discounts to political candidates that generally are not available to the public are considered political contributions and must be disclosed on a candidate’s campaign disclosure forms.

If the rate difference granted to Agran is a campaign contribution, the mayor has not reported it on his disclosure form for the months of January through March 17, 1990. Agran’s reelection committee began occupying the rooms in February.

The disclosure statements--required by state law--are used to list campaign monetary contributors, loans, expenditures and non-monetary donations such as services, facilities or supplies.

Also, an Irvine campaign finance law prohibits candidates from receiving more than $170 worth of donations from any individual per year. If the rooms are in fact a donation, the Agran campaign could be getting hundreds of dollars in contributions well exceeding what the Irvine ordinance allows.

Agran and Ray deny any impropriety in setting up the headquarters arrangement, which they describe as a mutually beneficial business deal: Agran gets a decent base of operations while his campaign volunteers provide much-needed customers for shops and restaurants in the Old Town Irvine complex.

“This is not a donation,” Ray said. “We would do it for someone else, and we would encourage it for another two years--until all of the other tenants are operating and stabilized and the center is well-publicized.”

Ray, a major Democratic Party fund-raiser whose projects have been approved by Agran in the past, helped develop the Old Town complex and the La Quinta Motor Inn, a remodeled grain elevator off the Santa Ana Freeway and Sand Canyon Road. He is a general partner in the center.

“We have been looking for as many patrons as possible,” said Ray, who described himself as a supporter of Agran. “If Sally Anne Sheridan (Agran’s opponent in the June 5 election) wants a room here, she can have it too.”

The Agran campaign began renting facilities at La Quinta on Feb. 12. Ray said he was first approached by a campaign volunteer, Peggy Mears, and later worked out a deal in which Agran paid no more than $1,500 in total rent for two rooms.

Mears is married to Christopher Mears, an attorney and Agran supporter whose office is in the Old Town complex. Christopher Mears attacked Sheridan in public and in a newspaper ad for saying she had a master’s degree in nursing from Harvard University when she did not.

Office space in the Old Town complex rents for $1.57 a square foot, according to commercial real estate agents handling the complex. Although rent for his hotel rooms is cheaper, Agran said, it is not as cheap as the 60 to 70 cents a square foot he pays for a private office in the Sky Park complex.

“There is no campaign on the face of the Earth that will pay $1.57 a square foot,” Agran said. “If La Quinta had felt that this was an uneconomical proposal, they would have rejected our offer. There is tremendous unused capacity over there. If they had not rented to us, we would have found it somewhere else.”

Ray said, however, that La Quinta has never given such a low rate to a customer before, but, he added, no one has ever asked. He said that the occupancy rate at the hotel is about half full, hence, any renting of space beyond that is very profitable.

“It’s like finding a dollar on the street and putting it in your pocket,” he said.

Officials for the Fair Political Practices Commission, a watchdog agency that enforces the state Political Reform Act, declined to comment on the specifics of Agran’s campaign headquarters.

However, FPPC officials said that discounts and rebates not extended to the general public are usually considered campaign contributions under state law and must be disclosed to the public on campaign disclosure forms.

A violation of the Political Reform Act carries a maximum penalty of $2,000 in addition to the possibility of civil lawsuits and misdemeanor charges that could be brought by the county district attorney. The maximum punishment for breaches of the Irvine campaign contribution limit is $500 and six months in jail, but generally the city allows the contributions in question to be returned.

The only person to complain publicly about Agran’s campaign headquarters was Wayne Grau of Irvine, a Sheridan supporter who addressed the City Council on May 8. At the meeting, Sheridan was cleared of any impropriety in earning commissions from a house her husband sold on behalf of City Atty. Roger Grable.

“Is it a conflict of interest,” Grau asked, “that the mayor’s campaign committee operates out of an Irvine-based inn provided for and owned by a principal of J. Ray Construction Co., a large development company with large developments currently going on in the city?”

Agran retorted that if Grau had any specific allegations of wrongdoing that he contact the proper authorities.

The Irvine Co., a limited partner in the Old Town complex and Irvine’s largest landholder, inquired about Agran’s headquarters to determine whether the company might be violating any political contribution disclosure laws. Dawn McCormick, an Irvine Co. spokeswoman, said the developer’s lawyers determined there were no potential problems for the company.