ANALYSIS : How a Good Idea Became a Political Hot Potato : Santa Monica officials agree that a housing complex for AIDS patients is worthwhile. But some think the approval process amounted to an abuse of power.

It turned out, as had been long-predicted, to be a done deal.

So no one was surprised when the Santa Monica City Council voted 5 to 2 Tuesday night to lease city-owned oceanfront property to a nonprofit social service group for an affordable-housing complex for people with AIDS.

The self-congratulation that followed was also not unexpected. There, too, the council members--all of them elected with help from the city’s powerful rent-control political machine--did not disappoint, patting themselves on the back for their foresight, compassion, generosity and political correctness.

The complex will include 25 apartments for people who have been infected with the virus that causes AIDS and need affordable accommodations, counseling and other support services.

“We should be proud to put this in this location,” said Councilman Ken Genser.

Maybe so, but some are wondering: Can they be proud of how they did it?

Mayor Judy Abdo says yes. “This has gone through all the process it needs to go through,” she said.

But others, among them council members Robert T. Holbrook and Asha Greenberg, plus the president of the local Chamber of Commerce, call the matter at least an abuse of process and perhaps an abuse of power.

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“This is a prime example of people of a certain political persuasion being sanctimonious and engaging in politics under the guise of making a decision,” chamber President Graham Pope said in an interview. “The decision had already been preordained. . . .The process was circumvented.”

It must be said that Holbrook, Greenberg and nearly all others who opposed the site on Ocean Avenue, adjacent to the municipal pier, favor the housing project itself. They want to consider putting it at another city-owned property where it would cost less.

But some believe homophobia is at the root of the opposition. “It’s AIDS prejudice,” said Abby Arnold of Santa Monica AIDS Project, a city-funded social service agency.

Charges of back-room politics and countercharges of homophobia. How did what everyone agrees is a laudable concept by a well-respected nonprofit group affiliated with the Episcopal Diocese disintegrate into this? It’s Santa Monica politics at its most malevolent.

The group that wants to build the housing is called Project New Hope, which does job retraining and provides affordable housing for those who have the Human Immunodeficiency Virus, which causes AIDS. Before applying for federal funding, Project New Hope affiliated itself with Santa Monica AIDS Project, an agency run by Arnold.

Arnold is a close friend of the mayor and other council supporters of the housing project, spawning charges of cronyism. Abdo also was on the board of Arnold’s agency, which is how the mayor knew about the proposal from its inception in mid-1993.

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Abdo quit the board last year when the council adopted a conflict-of-interest law. It was passed because council members other than Abdo said it was wrong to be on an agency board and then vote to give city money to the same group.

Further evidence of cronyism, critics charge, is that Project New Hope hired Planning Commission President Ralph Mechur--another political ally of the council majority--as its architect, thus further ensuring the success of the venture.

Mechur, who has designed other affordable-housing projects, said the charges are ridiculous.

“There’s no truth whatsoever to charges that Project New Hope is trying to get a project approved behind the scenes,” he said.

Arnold also denied using her contacts to muscle the project through the city government. “I wish I had that much personal power,” she said.

Abdo also denied the allegation.

Opponents of the project are unconvinced, saying project sponsors all along insisted on the plum location because, as Greenberg put it, “they knew they had friends in high places.”

When city officials later suggested another piece of city-owned property, Project New Hope rejected it as not good enough because it was near a bus yard, not at the shore. They said their funding agency, the Department of Housing and Urban Development, rejected the site too, for a similar reason, and they would lose their grant if they didn’t get the Ocean Avenue location.

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It is unclear if that was an off-the-cuff opinion by HUD or an edict. At Tuesday’s hearing, Holbrook demanded to see HUD’s letter rejecting the other site. None was forthcoming, because, as was later admitted, none exists.

Actually, Arnold and others say it was the city staff that first suggested the oceanfront site--among others--in letters to HUD. Abdo said a letter that she sent, drafted by a staff member in 1993, included the Ocean Avenue address.

In any event, City Manager John Jalili emphasized that a mention of a location in a letter to get funding is a million miles from a commitment to it.

When word leaked out that the project was being pushed, Greenberg accused the others of having a “ghost” council that did things among themselves then presented them in public as a fait accompli.

She was assured by the city manager in January that no decisions had been made.

Arnold said she did not present Project New Hope to Greenberg or others because members of the housing staff had asked her to wait until the time was right.

“It’s really not up to us to decide at what point the staff gives information to the council,” she said.

After Greenberg’s complaint, the project was not publicly discussed for months.

Finally, Rosenstein put it on the agenda this spring, saying the rumor mill was churning and it was time to find out its status.

There was no public hearing at that time, but soon thereafter Arnold went out to sell the idea to the project neighbors. Opinions had, by then, hardened.

At an emotional public hearing, speakers questioned the fiscal prudence of turning over to a nonprofit organization a $1.5-million property that could be a revenue-producing site. After all, the city had just raised fees on various services to balance the budget; a year ago, parking ticket fines were more than doubled.