Official With Ties to Owner Voted on Housing

Seal Beach Councilman Shawn Boyd participated for 17 months in decisions involving the city-financed purchase of a local trailer park without disclosing his business ties to its owner, who sold the park for more than twice what he paid for it.

Richard Hall bought the Seal Beach Trailer Park in December 1998 for about $3.5 million. He sold it in December 2000 for $7.4 million to a nonprofit organization, city records show. The city put up $1 million in state grant money and $6.4 million in revenue bonds for what is Seal Beach’s sole affordable housing project.

Records on file in Los Angeles County show that Boyd has been acting as Hall’s agent since September 2000 in ongoing negotiations involving a mobile-home park in Castaic. Boyd also began acting on Hall’s behalf on a mobile-home proposal in Newport Beach in December 1999, according to interviews.

During the 17-month period, Boyd voted seven times and abstained in three other votes involving Hall’s Seal Beach park. The councilman did not reveal his relationship with Hall when he abstained, he said, because it was not a conflict of interest.

But a political opponent of Boyd, Seal Beach resident Laura Brecht, last week mailed complaints to Orange County Dist. Atty. Tony Rackauckas and the state Fair Political Practices Commission, alleging that the councilman violated state law by failing to disclose his relationship with Hall while voting on matters relating to the park.

State law bars elected officials who have received $250 or more in income within the previous year from voting or influencing decisions for the next 12 months on matters that could financially benefit the giver. The prohibition includes money either paid to or formally promised to officials.

Boyd, who got his real estate license in September 1999, said he had proposed “four or five” speculative deals to Hall and his company RHC Communities since December 1999. But none of them has panned out and he hasn’t been paid any money, he said.

The mobile-home project in Castaic, for which the councilman has been acting as Hall’s agent, is pending and hasn’t yet resulted in any payments, Boyd said.

“We haven’t been able to put anything together,” Boyd said of his projects with Hall. “Nobody makes any money until the deal closes.”

Hall declined through a secretary to comment Wednesday on Boyd.

The councilman said he has a verbal contract with Hall to be paid $12,000 from the Castaic project after the park is rezoned by Los Angeles County; that approval is pending. He said he also anticipates payment of $4,000 from an aborted apartment project in Anaheim, in which Hall was one of four investors.

Documents filed in September 2000 in Los Angeles County list Boyd as a registered agent and lobbyist for Santiago Associates, a limited liability corporation owned by Hall. He has communicated to Los Angeles County planner Karen Simmons using an e-mail address of shawn@rhccommunities.com. He also used that address in communicating with Newport Beach, he said.

Boyd said he was told by Seal Beach City Atty. Quinn Barrow that he had to disclose business relationships only if he received any money. He said the issue has been raised by political opponents, and admitted that he didn’t tell his colleagues even in closed sessions about his relationship with Hall because he feared it would be used against him in his upcoming reelection campaign.

Boyd said he voluntarily abstained on three votes involving the city’s issuance of $6.4 million in revenue bonds to buy the park because he considered them “material votes” directing money to Hall.

“I really try to avoid conflicts,” said Boyd, 32. He was elected to the council in 1998 after being endorsed by Rep. Dana Rohrabacher (R-Huntington Beach). “I’m very cautious about that.”

Barrow confirmed this week that he gave Boyd advice but declined to say what it was.

Councilwoman Patty Campbell, who sat on a council committee overseeing the park sale, said Boyd should have recused himself from the trailer park issue entirely after his first business pitch to Hall.

“For Shawn to be there trying to establish a working relationship with [Hall] to make money, that’s what I’ve got a problem with,” she said in an interview this week.

Brecht, who served as campaign treasurer to Boyd’s opponent during his 1998 election race, said she filed the complaints because voters should “have their eyes opened” about Boyd’s conduct.

Boyd’s relationship with Hall probably resulted in the city--and ultimately residents--paying more for the trailer park than they might have, Campbell said. The 70-year-old park has 126 spaces, 120 of which have been preserved for low- and moderate-income renters.

Campbell said Boyd told her during a conversation in the midst of the negotiations that he had told Hall the city had $2 million available to help buy the park.

“My reaction was, ‘What did you do that for?’ I was stunned,” Campbell said. “I said, ‘Who are you working for, Hall or the city?’ He said he thought it would get the negotiations going faster.”

Boyd Admits Providing Some Information

Boyd confirmed this week that he told a representative of Hall that the city had millions--he put the figure at $4 million--in redevelopment money that could go toward the purchase. But he says that information was a matter of public record.

Nevertheless, providing the information “could have” affected Hall’s price demand, Boyd conceded.

Park resident Frank Boychuck, who was involved in the sale, said: “I frankly feel the residents paid more for the park, probably in the millions, than they had to.”

The park was purchased in December 2000 by LINC Housing, a nonprofit corporation, using the $6.4 million in city-backed bonds and a $1-million state grant for affordable housing. Hall had rejected the residents’ first offer of $6.4 million, demanding $8 million.

Under the sale agreement, residents will repay the city bonds through rents over the next 30 years. In addition, the city agreed to subsidize the new higher rents for low-income residents, using up to $3.4 million in redevelopment funds over the next 18 years. Residents will own the park once the bonds are repaid.

Boychuck said residents were worried that Hall would evict people and turn the park into a resort, as he had done at the Treasure Island Mobile Home Park in Laguna Beach.

During the negotiations, Boyd told trailer park residents at a special meeting that Hall was planning to sue the city and evict them after the city refused to let him raise rents. Boyd offered to call Hall and draft an offer.

Boyd said he first met Hall in July 1999, after Hall appeared before the City Council to ask to raise rents at the trailer park as much as 50%. There was no council vote, according to minutes of the meeting, but Boyd said a rent increase wasn’t out of the question if Hall could document increased costs of operation.

Within days, Boyd said, he got a call from friends of Hall asking him to meet Hall for lunch in Seal Beach, which he did. In November or December 2000, Boyd said, he heard that Newport Beach was accepting bids to redevelop the Marina Park Mobile Home Park on the Balboa Peninsula. He said he called Hall.

“The only person I knew who knew anything about mobile-home parks was Richard Hall,” Boyd said. “Richard was on my Rolodex.”

Newport Beach Assistant City Manager Sharon Wood said Boyd met with her “once or twice” on behalf of one of Hall’s companies, RHC Communities, between November 1999 and Feb. 4, 2000, when the bids were due. The city ultimately chose another developer.

In January 2000, Hall was back before the Seal Beach City Council asking for a 36% rent increase at the trailer park. Boyd was unsuccessful in persuading his colleagues to allow a sliding rent scale based on income, then voted against the 7.8% rent increase approved by the rest of the council.

Weeks later, Boyd voted with a unanimous council to give residents $20,000 to hire attorneys and other experts to pursue bond financing to buy the park from Hall. He voted later to spend $7,000 for an attorney to obtain the state grant.

In all, Boyd voted seven times between January 2000 and May 2001 on items relating to trailer park rents or the park’s sale. All of the votes were unanimous except for the Jan. 10, 2000, rent-increase vote. The last vote was in May, when Boyd joined the rest of the council to unanimously approve the city’s application for the $1-million state park-purchase grant.

City records show Boyd abstaining on three votes during that time, all regarding the city’s issuance of revenue bonds for the park. A videotape of the Oct. 23, 2000, council meeting shows Boyd saying he was abstaining from the bond sale vote, not because he had a conflict of interest, but because he was involved in similar real estate transactions.

“As an elected official, soon to be running for office again in a couple of years, I don’t want anybody to point a finger saying you had a conflict in this,” he said on the tape.