Suit Seeks to Halt Santa Ana Housing Project

A lawsuit filed Monday alleges that Santa Ana Mayor Miguel Pulido violated state law by not detailing his business ties with a local real estate investor whose company stands to receive millions of dollars for a neighborhood revitalization project.

The lawsuit, filed by an immigrant rights group over the redevelopment of Minnie Street, charges that Pulido failed to reveal his ties with Kris Kakkar in financial disclosure forms he filed with the Fair Political Practices Commission.

Pulido denied any wrongdoing, and said he believed he had filled out all the necessary forms.

Two weeks ago, the City Council approved an $8.3-million bond issue to fund the purchase and renovation of eight rundown apartment complexes owned by Minnie Street Partners, a company headed by Kakkar, a business partner of Pulido on two real estate deals in neighboring Garden Grove.

During the March 5 council meeting, Pulido recused himself from the bond vote, citing a potential conflict of interest.

But a year ago, Pulido signed off on an agreement granting $5 million to the entire revitalization project, including hundreds of thousand dollars for exterior renovations on buildings owned by Minnie Street Partners.

“If he signed it, he took official action,” said Chuck Bell, a Sacramento attorney who specializes in Fair Political Practices Commission regulations. Bell said Pulido’s signature could be a possible violation of FPPC rules.

For the last two years, Pulido and Kakkar have been partners on projects to build a hotel and a senior citizens housing complex in Garden Grove worth millions of dollars, according to loan records for the projects.

The lawsuit, which seeks to halt the Santa Ana project, contends that Pulido violated FPPC regulations that require public officials to disclose ties with anyone who owns real estate or does business within the official’s jurisdiction.

In August, Pulido filed an amendment with the FPPC stating his stake in the Garden Grove properties. He did that, he said, after learning of FPPC rules that require officials to list real estate holdings within two miles of city borders or its “sphere of influence.”

In that amendment, he did not disclose his partnerships with Kakkar. He said Monday that he didn’t believe he was required to because the form didn’t ask for business partnerships related to the listed property.

“Why did they do the form this way?” he said. “We can only do what we are told to do. I filled out the form. I don’t know how the form complies with the code.”

The Santa Ana project, called Cornerstone Village, has been touted by city officials as a model of urban renewal. It is designed to revamp a blighted block of 46 multidwelling complexes on Minnie Street just south of downtown Santa Ana.

But some of the area’s 3,500 residents said they are worried the project will displace them. The owners have agreed as part of the project to try to decrease the neighborhood’s density, which is now more than 6 people per apartment, one of the highest in the city.

“I don’t know what we would do,” said one resident who lives with his wife, their daughter, a friend and a brother in a cramped and rundown one-bedroom in one of the Minnie Street Partners’ buildings.

The man, who did not want to be named because he is an undocumented immigrant, said he paid $625 a month.

Santa Ana city Housing Manager Patricia Whitaker said the project will not displace residents. She said “the existing families will be grandfathered” into the new project. But many in the mostly Latino neighborhood are undocumented immigrants, and they fear they will be helpless if landlords try to drive them out once the buildings are repaired and begin to attract higher-income renters.

“The project is designed to benefit the developers, and not the residents,” said Chris Nicoll, the attorney representing Hermandad Mexicana Nacional of Santa Ana, an advocacy group for undocumented immigrants. “It must be stopped or modified. The city is paying [landlords] to make modifications that they should have made themselves in the first place. . . . Kakkar should not get taxpayer money to bring his buildings up to code.”

It was not clear Monday how much of the $8.3-million bond would go toward the purchase of the eight properties, but county property records valued the properties at $4.1 million.

Nicoll, who was not aware of the bond, said he plans to argue that the project is illegal because of Pulido’s failure to disclose his involvement with a major stakeholder in the project, Kakkar.

The lawsuit contains a series of documents linking Pulido to Kakkar. On Nov. 2, 1999, the men signed a general partnership agreement creating K and P Partnership.

The partnership later secured a $500,000 bank loan, signed by Pulido and Kakkar, to buy properties on Garden Grove Boulevard in Garden Grove. An 82-unit senior citizens housing complex is planned for the site, according to Garden Grove city officials.

There is no record of K and P Partnership in Pulido’s FPPC filings. Neither did Pulido file financial disclosures about his stake in Sungrove, Garden Grove Partnership, a company he formed with Kakkar and others in June 1999, according to papers filed with the California secretary of state. The company is developing a $5 million Holiday Inn next to K and P’s senior housing project.

Pulido declined to discuss the details of those business dealings Monday, and said he has always kept a distance from Kakkar’s dealings in Santa Ana.

“We are partners on these two deals,” Pulido said. “I think he is a fine gentleman, and I have been very careful not to participate in anything that might be a conflict.”