The folks at Walt Disney Co. knew a good thing when they saw it. Grinding slowly through the state Legislature this year was an “infrastructure bank” proposal gilded with potential.
Its promise: to possibly help defray some of the $800 million needed for roads, sewers, trees and parking structures around the company’s ambitious Disney Resort expansion in Anaheim.
Along with other mavens of private enterprise eager to tap new sources of public financing, Disney lobbied hard for the measure, authored by a bipartisan team of Democratic Assemblyman Steve Peace of San Diego and Republican Sen. Marian Bergeson of Newport Beach.
Yet despite the broad-based support of business and unflinching backing from Gov. Pete Wilson, the bill was summarily skewered in the Senate during the early morning hours last weekend as the Legislature closed up shop for the year.
It was in some ways a surprising defeat given the Legislature’s revived devotion to market incentives. To many, the bill seemed a perfect antidote for California’s recession-weakened economy, the sort of can-do legislation that would spur business in the state.
“So often, one of the hurdles that stop a project is there’s no money for the infrastructure needed for a new plant or industrial park or whatever,” said David Kilby, a California Chamber of Commerce vice president. “We felt this was a tool, a vehicle to solve that problem we have in California. It would have led to jobs.”
But in the end, the measure was done in by various and sundry factors, ranging from turf battles to the inability of sleep-starved senators to grasp the intricacies of a complex piece of legislation. Some lawmakers were swayed by environmentalists, who complained that it was simply a pork-barrel bill that would spark runaway development. And underlying it all was a dose of pre-election-year politics.
Capital insiders say several members of the GOP, normally staunch backers of anything deemed pro-business, stayed away for fear it was a “juice bill” that would prompt companies to funnel big campaign bucks to Peace, who expects to spend $500,000 to seek a state Senate seat in San Diego County. Democrats, meanwhile, sensed the governor would use the infrastructure finance agency to dole out goodies to big business--and, in turn, capture campaign cash and the jobs issue in next year’s gubernatorial race.
The political overtones grew particularly heavy as Treasurer Kathleen Brown, a Democrat who hopes to challenge Wilson for governor, lobbied to defeat the bill in the waning days of the summer session. Republican insiders said it was all politics, but Brown supporters contend the treasurer was troubled by policy factors--in particular, that the infrastructure bank would be under the auspices of a new board stocked with Wilson appointees.
“We support the concept of an infrastructure bank,” said Michael Reese, Brown’s spokesman. “Our problem was with the structure. It would have created a super bureaucracy.”
For Disney, the measure was a long shot at best.
Even if the infrastructure bank had been created, it would have had relatively little money to work with initially. At most, authorities say, the bank would have probably been able to borrow upward of $150 million during its first year of operation, money that wouldn’t go far statewide. The Disneyland expansion, like other projects around the state, would have ended up in a long line for a small pot of money.
But that financial picture could have brightened considerably depending on the largess of California’s electorate. If voters approved a billion-dollar infrastructure bond measure expected on the 1994 ballot, the bank would have been rolling in cash to help finance the roads, sewers and other improvements needed to spark business retention and growth.
That sort of money would have helped considerably as Disney toils with government officials to come up with the titanic sums needed to finance its infrastructure tab, including two of the largest parking structures in the United States, a pair of car-pool off-ramps from the Santa Ana Freeway, street landscaping, utility lines and storm drains.
So far, the players have made headway toward getting $203 million in federal, state and local funds for one of the parking structures, plus another $25 million from the state for the off-ramps. But much of the rest will likely fall to Anaheim or Orange County to finance, and the infrastructure bank would have helped significantly, boosters say.
Disney officials, however, say that even under the rosiest scenarios, the infrastructure bank would not be the solution.
“We don’t know categorically that we’ll need it,” said Kate Bartolo, Disney’s government relations director. While “every little bit helps” with a massive project like the Disneyland expansion, “our intent is not to have our hand out to government,” she added. Disney’s interest in the bill, Bartolo said, was largely a holistic desire to see the state economy improve.
“If infrastructure investment is properly targeted and tied to projects that result in job creation and economic growth, it’s one of the fastest ways to jump-start our economy,” she said. “This wasn’t just a public works bill--it was an economic recovery bill.”
Environmentalists suggest otherwise. They contend that the makeup of the proposed infrastructure bank--which was slated to be blended into a state housing agency run by John Seymour, a former U.S. senator and Anaheim mayor--along with Wilson’s enthusiastic backing of the Disneyland expansion ensured the project would move to the front of the line.
“Disney has a lot of friends in the Legislature, a lot of friends in the Administration,” said Michael Paparian, Sierra Club state director. “They haven’t said they’ll look for the money, but it’s a good bet.”
Dan Schnur, Wilson’s spokesman, said the governor plans to push the bill hard when the Legislature reconvenes--and he expects to see it approved. On the Democratic side of the aisle, Peace agreed.
“It was the most significant legislation this year in terms of job creation,” Peace said. “California hasn’t invested in its infrastructure since the early ‘60s. If tomorrow we wanted to see more industry and business, we couldn’t accommodate it. We simply haven’t built the platform on which business can grow.”