City Struggles After Support Is Withdrawn

Without Irving Moskowitz, a controversial international developer and multimillionaire owner of Hawaiian Gardens’ bingo parlor, the city might have gone belly up long ago.

Time and again, Moskowitz has rescued the square-mile city from its financial shortfalls while pushing forward with a plan to build a casino there. Lately, his $200,000-a-month largess has kept the city afloat.

But that came to a halt last month.

On Thursday, the city missed a payroll, the third since 1995, sending its 100 employees home empty-handed. As many as 30 of them could soon face layoffs, and the 18-officer police force will probably be replaced within months by the Sheriff’s Department.

Explanations vary on what prompted Moskowitz to withdraw his support, but city officials acknowledge that they have rejected his advice on recent municipal decisions. They also suspect that he may be hesitant to keep investing in the city in light of proposed legislation in Sacramento that could derail his card club plans.

Now, elected officials are being forced to come to terms with nearly a decade of deficit spending, which was covered by the $200,000 a month.

“It doesn’t look good,” Councilman Ralph Cesena said. “We’re in a difficult situation, but we’re going to get out of it.”

Although bankruptcy discussions are off for now, Hawaiian Gardens, a working-class community of 14,000 off the 605 Freeway, appears ill-prepared to wean itself from Moskowitz’s charity. As of Friday, city coffers contained less than $20,000, despite more than $5 million from Moskowitz in recent years.

Part of the problem, officials say, is timing. The city is still expecting about $119,000 in state tax revenue, which was delayed because of lengthy state budget negotiations. That money may not arrive for weeks.

The city is also light on cash because it paid nearly $189,000 this summer to settle a lawsuit filed by gambling opponents seeking to block Moskowitz’s casino. City officials insist that Moskowitz was supposed to reimburse the city for the entire amount but has not done so.

A spokesman for Moskowitz said Friday that the developer owes the city nothing, and that there is still no decision on whether Moskowitz will continue any payments.

“We will review all [funding] requests and act appropriately,” spokesman Bob Stiens said. He added that Moskowitz has not cut off the city. Through his various charitable organizations, Stiens said, Moskowitz “continues to work directly with the city and numerous projects in Hawaiian Gardens.”

Some city officials attribute Moskowitz’s cessation of payments to disputes between the developer’s attorney Beryl Weiner and city attorney Julia Sylva over who is responsible for various city expenses. Neither attorney was available for comment Friday.

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Cesena said Moskowitz’s pledges to pay various city bills were part of a “gentlemen’s agreement” that was never put in writing. For that reason, he said, the council is wary of pressing for the money.

Moskowitz’s generosity stops, Cesena said, “if we rattle anything too much.”

Until mid-July, the city was receiving twice monthly payments of $100,000 through Moskowitz’s Hawaiian Gardens Public Safety and Police Foundation.

Donna Schultze, president of the foundation, said the checks were halted--with the exception of a $95,000 emergency payment to cover payroll earlier this month--when the organization learned that the city was using the money for general operating expenses instead of strictly police costs.

“That money wasn’t going into the areas that it was intended for,” she said.

But City Clerk Domenic Ruggeri, chairman of the city’s Finance Advisory Committee, said the foundation money was widely considered a channel through which Moskowitz could help a city in which he has substantial financial interests.

“[Moskowitz] feels indebted to us,” Ruggeri said. “Who better to send the money to but us?”

Moskowitz’s ties to Hawaiian Gardens date to 1972, when the physician-turned-developer extended his chain of hospitals into the city. Although he left Southern California in 1980 to live in Miami Beach, Moskowitz maintained contacts with city officials, and in 1988 agreed to take over a bingo parlor in the city.

By 1991, the 800-seat club was taking in $33 million a year, though much of that was paid out in prizes, and 1% of the gross went to the city.

The club’s profits have allowed Moskowitz, an Orthodox Jew who lost 120 relatives in the Holocaust, to invest heavily in real estate in Israeli’s disputed territories. Criticized by leftists as an aggravator to the Arab-Israeli peace process, Moskowitz is nevertheless hoping to develop apartments in Jerusalem’s traditionally Arab Mount of Olives. Israel delayed the project last month as part of a move to reopen peace talks with the Palestinian Authority.

Meanwhile, Moskowitz hopes to increase his revenues by developing a 20-acre poker club in Hawaiian Gardens. The casino was approved by 57% of city voters in 1995, but isn’t expected to open until at least next spring.

As owner of about a third of the commercial space in the city, Moskowitz has not taken a back seat in city politics. Last year, he financed the recall of a councilwoman who had vigorously opposed his card club proposal. In turn, area card clubs banded together to try to oust Moskowitz’s three pro-casino favorites on the council, only one of whom was recalled.

He has contributed hundreds of thousands of dollars to programs including a food bank and efforts to fight gangs.

However, some city officials say the time has come to break off their dependence on their benefactor. “Our problem is we spend money like we’ve got it and we don’t,” said Councilman Don Schultze, the foundation president’s father. “It’s like living with a credit card.”

Adding to the city’s cloudy financial picture is a bill under consideration in Sacramento that could jeopardize Moskowitz’s casino. Written by state Sen. President Pro Tem Bill Lockyer (D-Hayward), the legislation would forbid the operation of a casino within 1,000 feet of a school, church or hospital, among other things.

“Hawaiian Gardens is such a geographically small area that no matter where within the city you tried to locate [a casino], it might be near one of these [proposed] off-limits areas,” said Sandy Harrison, Lockyer’s press secretary.

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Moskowitz is trying to win an exemption from the proposed legislation, saying the city had approved his card club in 1995, before the bill was introduced.

While the bill works its way through the Legislature, Jack Simpson, Hawaiian Gardens’ interim city administrator, says he is trying to get the city to “stand on its own two feet.”

One short-term measure he is considering is a $2-million bond issue. That, combined with the state tax money, would buy the city time to make enough budget cuts to bridge a shortfall of at least $3 million, he said.

Simpson said he hopes to work out a new system under which Moskowitz can fund certain city activities, such as recreational or arts programs. However, he said, such discussions “are starting from ground zero.”