Suit Accuses Pulido of Not Reporting Ties to Developer

A lawsuit filed Monday alleges Santa Ana Mayor Miguel A. 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 blighted Minnie Street, contends Pulido failed to reveal his ties with Kris Kakkar in financial disclosure forms he filed with the state 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 a $8.3-million bond issue to fund the purchase and renovation of eight run-down apartment complexes owned by Minnie Street Partners, a company headed by Kakkar, a business partner of Pulido’s 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 of dollars for exterior renovations on buildings owned by Kakkar’s 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 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 Pulido violated FPPC regulations that require public officials to disclose any ties with an entity if the entity or any related entity owns real estate or does business within the public official’s jurisdiction.

Pulido filed an amendment in August with the FPPC stating his stake in the two properties in Garden Grove but did not disclose his partnerships with Kakkar.

In an interview Monday, Pulido said he did not believe he had to include Kakkar’s name. He said he listed the properties after being told that his Garden Grove properties could fall within FPPC rules that require officials to list real estate holdings within two miles of the city’s borders or its “sphere of influence.”

Pulido said the FPPC form he filed did not require him to list business partnerships related to the listed property.

“Why did they do the form this way?” he asked. “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 concerned 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 six people per apartment, one of the highest in the city.

“I don’t know what we would do,” said a resident who lives with his wife, daughter, friend and brother in a cramped and run-down one-bedroom apartment in one of the Minnie Street Partners’ buildings. The man, who did not want to be named because he is an illegal immigrant, said he pays $625 a month.

Santa Ana Housing Manager Patricia Whitaker said the project will not displace any residents. “The existing families will be grandfathered” into the new project, she said.

But many in the mostly Latino neighborhood are illegal immigrants, and they fear they will be helpless if landlords attempt 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 illegal 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.”

Kakkar did not respond to a request for an interview.

It was not clear Monday how much of the city-approved $8.3-million bond issue 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 issue, 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 two men signed a general partnership agreement creating K and P Partnership, with an address at 1211 N. Broadway in Santa Ana.

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 housing complex is planned for the site, according to the Garden Grove city officials.

There is no record of K and P Partnership in Pulido’s FPPC filings. Pulido also did not 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 hotel next to K and P’s senior housing project.

Pulido declined to discuss the details of those business arrangements 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.”