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July 12, 2012 – Daily Brief

By Jeff — Jeff Wilson

  • A Sheriff’s Deputy investigator says a witness saw the driver of that Acura Integra that crashed on Soledad early Tuesday  morning driving almost 80mph just before the crash. The witness says the driver swerved to avoid another car before he lost control and slammed into trees in the median. His brother, the passenger, was killed in the crash. No word on how the driver is doing SIGNAL
  • A friend of the three young men accused in the Halloween murder last year says one of the accused men showed off his gun to him just prior to the murder. Despite combing through the area after the murder, Sheriff’s investigators still haven’t been able to find the gun. SIGNAL
  • The City Council and staff aren’t quite sure how to handle TimBen Boydston’s suggestion that the City form a real library Board of Trustees and appoint real subject-matter experts to it. Staff will study the matter and bring back a report in October SIGNAL
  • Latest crime report covering the first half of 2012 says “forcible rape” has increased dramatically in Santa Clarita. All together, Part 1 (violent and property) crimes have increased 12.8% in the SCV. And, strangely, unincorporated areas have lower crime rates than the City according to SCVNEWS
  • Congressional candidate Dr. Lee Rogers held three press conferences yesterday to outline changes he’d like to make to the Affordable Care Act, or Obamacare. His press conferences were held the same day the House voted, again, to repeal Obamacare. There’s also an interesting dialog about the ACA in which Rogers participates over at Facebook’s SCV Letters to the Editor group. WRB, FACEBOOK
  • A Stanford economics professor says he expects more California cities to seek bankruptcy protection following San Bernardino’s declaration of bankruptcy earlier this week. A League of California cities official thinks some cities will simply dissolve. LA TIMES
  • Congressman Buck McKeon called a hasty press conference yesterday to blast the Pentagon and the Obama Administration for what he says is a new DoD policy to limit information sent to Congress. McKeon says the DoD’s new policy limits reports to 15 pages. POLITICO
  • I must have missed this report late last month: McKeon, in an hour-long breakfast with reporters, said he’s given up fighting to reinstate the Don’t Ask, Don’t Tell policy that forbid openly gay members from serving in the military. He also reiterated to reporters that he’d be willing to raise taxes to avoid automatic defense cuts that kick in in January 2013. Finally he said that he thinks the 2012 election will be on eof the nastiest ever and doesn’t think the public should expect Republicans and Democrats to get along. FOX NEWS
  • Have you been following the latest banking scandal over LIBOR, the benchmark that many loans, credit cards, and some $350 trillion (yes trillion!) in financial tools are based on? BIG PICTURE finance blog has a nifty info-graph explaining it and making me wonder just what one has to do to get put in jail if you’re a wealthy banker. BIG PICTURE
  • A new burger chain named Smashburger, which doesn’t have drive-through windows, and serves beer and wine, is coming to Southern California. The Denver-based chain wants to open 40-60 restaurants in SoCal in the coming years. The Times says Smashburger’s burgers “originate as meatballs that are smashed onto a buttered grill, allowing them to be cooked within three minutes.” LA TIMES
  • Interesting blog post about hiking the real Wiley Canyon trail, part of the Ed Davis park in Towsley Canyon. BLOG
  • One concrete change TimBen Boydston has brought to the City of Santa Clarita that we can all be proud of is his appointment of Dianne Trautman to the Planning Commission. As Lynne Plambeck explains, no one gets into the details of development projects (thereby getting up in the developers’ grill, as it were) like Trautman and having her on our side is a plus for all sides. SIGNAL
  • This week in 1876, the railroad tunnel between the SCV and SFV was completed. John Boston notes that the railroad was a powerful economic engine for early Newhall, employing some 350 white workers and 500 Chinese workers. Interesting that there’s no hint of Chinese life in the SCV as there is in other cities in California with rail projects from this era. Also, the Signal’s despicable attack on Jehovah’s Witnesses resulted in a pogrom-like attack on JWs on this date in 1942. TIME RANGER
  • Let us hope the terrible wildfire season in the west spares the SCV this year. BIG PICTURE PHOTOS

Comments (68)

  1. CCJuly 12, 2012 at 1:21 AM PT
    I am so happy to see Dianne Trautman back on the Planning Commission. She has a level head and gets into the nitty gritty. Excellent appointment.
  2. Alan FerdmanJuly 12, 2012 at 1:29 AM PT
    Exactly. Diane is highly qualified and motivated. I am confident she will do an excellent job for us all.
  3. Fed Up N SCVJuly 12, 2012 at 3:00 AM PT
    You would have done a great job for Santa Clarita too Al. I am looking forward to voting for you soon!
  4. BertaJuly 12, 2012 at 5:03 AM PT
    Al, finally something we agree on!
  5. NateJuly 12, 2012 at 1:38 AM PT
    “having her on our side is a plus for all sides.” Propitiating the Us vs Them mentality? And here I was thinking we all lived in the same city. My Bad.
  6. PetzJuly 12, 2012 at 2:44 AM PT
    Petz has heard just about enough from Dr Rogers and does not understand the fascination that some GOPers, Tea Party Patriots, and conservatives feel for him. He is reminded of the Aesop fable of the frog and the scorpion. http://en.wikipedia.org/wiki/The_Scorpion_and_the_Frog Rogers wants to “move forward” on health care echoing the mantra of Obama, Reed and Pelosi. Obamacare has a foundation which is built on the quick sand of a massive federal deficit , and it is already showing signs of cracking. It looks like he has The Signal in his corner to attack Buck-is he paying ten cents a word? Rogers wants to restrict your political speech . He is at heart a Democrat and we cannot change or alter his desire to restrict individual liberty and grow the federal government. On November 6-we need to vote for Buck McKeon and allow Dr. Rogers to move forward with his career in medicine.
  7. Timothy Myers SR.July 12, 2012 at 3:21 AM PT
    I am voting for Buck, but out of obligation and with no enthusiasm.
  8. Coastal SageJuly 12, 2012 at 5:08 AM PT
    A foolish choice. I am not voting for Obama despite my obligation and with a lot of enthusiasm. My list of what Obama has done, to make his progressive supporters very angry, is long and detailed. I have the courage of my convictions, which those who “Will hold their note and vote for Buck” do not.
  9. AlpinerJuly 12, 2012 at 10:55 PM PT
    “Courage of Convictions” goes both ways. Although I do not enthusiastically endorse Buck, my convictions of believing in freedom and less government directs me to not contributing in anyway to democrats becoming the majority party in Congress. Simply too much is at stake.
  10. David GaunyJuly 12, 2012 at 3:28 AM PT
    Yeah, because Buck McKeon would never attempt to restrict our political speech.
  11. NateJuly 12, 2012 at 3:29 AM PT
    #BAMSUCKA
  12. LarMccJuly 12, 2012 at 3:40 AM PT
    It’s not so much a fascination with Rogers than it is a disgust with McKeon. The arrogance and entitlement Buck displays is shocking. I talked to someone who was at the parade on the 4th and said that Buck refused to acknowledge Cameron Smyth. Really? Can someone please get Buck his bottle and see if he needs a changing? McKeon represents everything that is wrong with politics today. We must be loyal to no political party in a situation like this if we ever expect this to change. A Rogers victory will send a loud message to current and future leaders that this nonsense will not be tolerated. I too am very skeptical about government getting involved in healthcare. Rogers is not embracing Obamacare as much as he is calling for a set of improvements to be made to it.
  13. Bill ReynoldsJuly 12, 2012 at 3:49 AM PT
    Have you ever had a one on one conversation with Buck?
  14. MrPerezJuly 12, 2012 at 4:41 AM PT
    He ignored me once when I rode right past him, slowly….and in uniform.
  15. Bill ReynoldsJuly 12, 2012 at 4:48 AM PT
    Even I would do that. My question was directed to LarMac.
  16. MrPerezJuly 12, 2012 at 5:02 AM PT
    You wouldn’t ignore me, very few can. I think the correct term is “hide from me”
  17. 4eyedsueJuly 12, 2012 at 5:47 AM PT
    schmoozer
  18. LarMccJuly 12, 2012 at 6:26 AM PT
    I met him once, briefly. I never had any conversation of substance with him. I voted for him in every past election.
  19. Bill ReynoldsJuly 12, 2012 at 9:52 AM PT
    Atta boy, LarMac!
  20. Coastal SageJuly 12, 2012 at 1:38 PM PT
    LarMcc said “It’s not so much a fascination with Rogers than it is a disgust with McKeon:. I missed the California Department of Toxic Substances (DTSC) Community Advisory Group (CAG) meeting yesterday, but heard about what happened from two determined Republicans today. Apparently Dr. Lee Rogers showed up in person, listened politely to what DTSC had to say, and then engaged in an intelligent conversation with DTSC’s representatives and the CAG members on three key topics: (1) The public health dangers the airborne dust generated by the Cemex mine which will cover Canyon Country; (2) The risk to Santa Clarita’s water supply which unchecked spreading of volatile organic chemicals continues to present, (3) The dissatisfaction of residents of Simi Valley with the U.S. Dept. of Energy’s management of the clean up of radioactive contamination at Santa Susana Field Lab aka Rocketdyne. Apparently the DTSC employees were really jazzed by Dr. Rogers interest in their work and the CAG members were dazzled that Dr. Rogers knew the issues. I don’t mean to be mean but can you imagine Buck carrying on an intelligent conversation with constituents, let alone state employees, about any of these issues?
  21. NateJuly 12, 2012 at 3:51 AM PT
    Catch phrase overload… reboot
  22. spineflower2July 12, 2012 at 4:25 AM PT
    Obamacare has a foundation which is built on the quick sand of a massive federal deficit You have it backwards; actually, the GAO concluded that without Obamacare, the deficit will rise dramatically.
  23. Bill ReynoldsJuly 12, 2012 at 4:25 AM PT
    Obama’s GAO….
  24. ToddJuly 12, 2012 at 6:13 AM PT
    The 112th Congress’ GAO, acutally. The GAO is a legislative division, not an executive.
  25. JeffJuly 12, 2012 at 7:41 AM PT
    Isn’t it opposite? CBO is congress, GAO is executive.
  26. MikeJuly 12, 2012 at 8:11 AM PT
    GAO and CBO are Congress. OMB is Executive. ZOMG.
  27. MrPerezJuly 12, 2012 at 8:44 AM PT
    Shouldn’t you have placed #BAMSUCKA at the end? Or does that belong to Nate Reynolds
  28. Dave PutnamJuly 12, 2012 at 4:44 AM PT
    I’ve got no “need” to vote for Buck McKeon in November. Dr. Rogers has already said that ACA needs tuning and I tend to trust the guy with the medical degree verses the war-monger that thinks buying more weapons from his buddies in the defense industry is the answer to all of our problems. Take off the blinders buddy, McKeon is robbing us blind while ignoring the needs of his district. has been doing it for too many years. It is time to change our district’s diaper.
  29. Dave PutnamJuly 12, 2012 at 7:48 AM PT
    “He is at heart a Democrat and we cannot change or alter his desire to restrict individual liberty and grow the federal government.” Sorry, I’m throwing the b.s. flag on that one. You’ve mangaed to include two whoppers within one sentence: Fallacy #1 The U.S. Government added over 900,000 jobs when George W. Bush was President while during President Obama’s presidency it has shed over 600,000 jobs. http://www.salon.com/2012/05/04/bush_vs_obama_jobs/ Fallacy #2 I don’t suppose you’d like to explain which of your personal liberties Dr. Rogers will be targeting if he’s elected to Congress would you?
  30. AlpinerJuly 12, 2012 at 11:01 PM PT
    It isn’t he, it is the possibility of a switch in the majority party. This is what worries conservatives.
  31. Dave PutnamJuly 13, 2012 at 1:21 AM PT
    They should be worried. They’ve done nothing but fight the President for the past 18 months. Hopefully the voters will make the necessary changes to get things back on track in Washington because right now it isn’t working and the polls show that voters aren’t happy.
  32. PetzJuly 12, 2012 at 3:03 AM PT
    Congratulation to Jim Farley for his appointment to the Open Space committee. We can only hope that he considers the economic impact of fallowing land on our community.
  33. Timothy Myers SR.July 12, 2012 at 3:21 AM PT
    Petz: If the developers thought it had any value they would NOT sell it to the City.
  34. BertaJuly 12, 2012 at 4:48 AM PT
    ALL land has value TMS.
  35. Wendy LanghansJuly 12, 2012 at 3:28 AM PT
    Are you referring to short term or long term economic impact?
  36. PetzJuly 12, 2012 at 3:49 AM PT
    The Haskell open space purchase wiped the site for 500 homes off the map. No consideration was given to the jobs and consumer purchasing power that could have been planted there. What about the future property tax revenue…gone. Yet on Tuesday night Bob Kellar flippantly grilled Lynne Plambeck asking whether there was ever a development she did not oppose.
  37. ToddJuly 12, 2012 at 4:21 AM PT
    Steven, IIRC, the Haskell Canyon development was killed by the County, and then the City bought the property after the County declined to rezone the land for development. Open Space didn’t kill the development. Reason, common sense and good judgement did.
  38. ToddJuly 12, 2012 at 4:23 AM PT
    Furthermore, we don’t need temporary, transient construction jobs in this city. We need permanent, wage sustaining jobs that the people of the Santa Clarita Valley can earn their living at, instead of commuting out of town to do so. So your argument about jobs and consumer purchasing power is moot.
  39. BertaJuly 12, 2012 at 4:51 AM PT
    Agreed!
  40. Dave PutnamJuly 12, 2012 at 4:48 AM PT
    Not to mention the already gridlocked roads and freeways. Do you ever drive through the Newhall Pass during rush hour or Friday afternoons in the summer?
  41. Phil EllisJuly 12, 2012 at 8:56 AM PT
    Did she reply?
  42. AnnetteJuly 12, 2012 at 3:39 AM PT
    Jim is a sharp guy and I have full confidence he will do a great job for the SCV residents! Congrats Jim
  43. Jim FarleyJuly 12, 2012 at 4:58 AM PT
    Thanks Annette and Steve for your congrats! I am looking forward to serving the citizens (particularly the property owners paying the tax) to make sure their money is being spent properly.
  44. Coastal SageJuly 12, 2012 at 5:18 AM PT
    Jim, in making sure the taxpayers get a good deal on land purchased with their money, remember the old saw that the letters M.A.I. after an appraiser’s name often means “Made As Instructed”. While a lot of regulations of appraisers’ conduct were adopted by the Federal and state governments after the Savings & Loan Crisis of the mid 1980′s to early 1990′s, as time has gone by commercial/land appraisers have gone out of the spotlight as people whose opinions can be manipulated. Learning about the reputations of the appraisers the City uses and the reputations of the appraisers various land sellers use will tell you a great deal about whose opinion you can have faith in.
  45. BertaJuly 12, 2012 at 5:02 AM PT
    Annette I agree. Although Jim and I have disagreed on issues including Open Space, I find him reasonable, intelligent, and willing to listen to the other side and discuss the issue (s). He did call me a communist once, and apologized later, so good thing I do not hold a grudge, lol. Seriously, congratulations Jim.
  46. IHeartSCVJuly 12, 2012 at 4:29 AM PT
    I find the use of the word “fallow” almost offensive. We have literally hundreds of species of plants, hundreds of species of birds, thousands of species of insects, etc… and they need “fallow” land to make a living. So much of California has already been lost to development, especially riparian woodlands, coastal sage scrub/soft chaparral, and native grasslands, all of which can be found in Santa Clarita. We’ve lost too much already (statewide, for example, less than 20% of historic riparian habitat extent remains), so I’m a fan of fallow.
  47. Bill ReynoldsJuly 12, 2012 at 4:35 AM PT
    Absent adequate infrastructure, I too am a “fallow fan”.
  48. MikeJuly 12, 2012 at 4:50 AM PT
    As much as I like to preserve Coastal Sage and the Spineflower, I find one long-winded and the other conspiracy-prone.
  49. BertaJuly 12, 2012 at 4:53 AM PT
    LOL!
  50. ToddJuly 12, 2012 at 5:00 AM PT
    Well done.
  51. Phil EllisJuly 12, 2012 at 8:53 AM PT
    But as opposed to another well known WIndy poster, Coastal usually has something wothwhile to post.
  52. MikeJuly 12, 2012 at 9:13 AM PT
    Phil, if you speak his name, he may appear. Do you ‘realize’ just how lucky we are? (shhhhhhh)
  53. Phil EllisJuly 13, 2012 at 12:31 AM PT
    Sorry.
  54. mikecJuly 12, 2012 at 3:14 AM PT
    Jeff, just wanted to say nice job with the Brief Today!
  55. PetzJuly 12, 2012 at 3:24 AM PT
    Petz thought he saw the back of your head at the council meeting on Tuesday. Did you apply for a commission position?
  56. mikecJuly 12, 2012 at 3:44 AM PT
    To quote day from Storage Wars “YUUUUUUUP!”
  57. NateJuly 12, 2012 at 3:29 AM PT
    Aside from the one issue. I agree wholeheartedly, nice work.
  58. Wendy LanghansJuly 12, 2012 at 3:25 AM PT
    For directions and a trail map of Ed Davis Park in Towsley Canyon, including Wiley Canyon trail, here’s a link: http://www.lamountains.com/maps/Towsley.pdf
  59. ToddJuly 12, 2012 at 4:24 AM PT
    Wendy, if you know who, someone needs to update that map. There are roads in that park that are only identified as ‘trails.’ Sorry, its a pet-peeve.
  60. Wendy LanghansJuly 12, 2012 at 5:30 AM PT
    You are technically correct, the roads are mislabeled as trails. But the good news is….they show you the way in…and out…
  61. JkJuly 12, 2012 at 5:37 AM PT
    Jeff — I sent something a while ago, but wanted to make sure you saw it. You know SCVTalk is (still) currently compromised? Go to Google and type: “site:scvtalk.com” — it’s filled with Levitra and Viagra spam…when you click one of the links from Google, your page is hijacked to a Pharmacy spam page. All pages on your site are infected. As far as I can tell, this *only happens in Firefox* — Internet Explorer and Chrome don’t reveal the problem.
  62. Coastal SageJuly 12, 2012 at 6:12 AM PT
    In his Daily Brief, Jeff links to the most recent L.A. Times article on the Chapter 9 bankruptcies of San Bernardino, Stockton and Mammoth Lakes. The focus of the L.A. Times article is a belief that there will be more public agency bankruptcies coming. I spent a lot of time yesterday helping a friend track down a conservative newspaper-published rumor that the Legislature had passed a bill, which was waiting for Governor Brown’s signature, which would forbid public agencies in Chapter 9 bankruptcy from cancelling or amending public employee labor union contracts or obligations to CALPERS. It turns out the rumor and the story are not true. What is true is that AB506, signed by the Governor in February 2011, and effective January 1, 2012, said that public agencies cannot file Chapter 9 bankruptcies (1) unless the public agency has participated in a “neutral evaluation process” as defined in the law, with employee unions and major creditors participating, or (2) the local public entity has declared a fiscal emergency and has adopted a resolution by a majority vote at a noticed public hearing, with the resolution including written findings that the financial state of the local public entity jeopardizes the health, safety, or well-being of residents absent bankruptcy protections. Apparently the City of Stockton went through the whole neutral evaluation process described in (1) above, got nowhere with creditors or employee unions, and ended up filing a Chapter 9 bankruptcy anyway, having wasted precious financial resources on the neutral evaluation procedure described in AB506. Around the state, sophisticated bankruptcy lawyers apparently learned from what Stockton went through, and now it looks like the City of San Bernardino is going to follow the procedure described in (2) above, adopting a carefully written Resolution full of factual findings (just like we see in every planning and zoning action by SC) , and then going right ahead, skipping the pre-bankruptcy meetings with employee unions and creditors. In the Vallejo bankruptcy, which predated AB506, that city used its powers to obtain wage and benefits concessions from its employees, but its Council and lawyers didn’t have the chutzpah to take on CALPERS and try to cut pension funding liabilities…even though the bankruptcy court gave Vallejo the green light to do so. The City of Stockton’s press releases say they are going to unilaterally cut their employees wages and benefits, but again say nothing about their payment obligations to CALPERS. The City of San Bernardino has not yet put out a press release describing the extent to which they will cut public employees pay, benefits or CALPERS contributions. Assuming argument’s sake that Stockton, San Bernardino and other insolvent cities ultimately do use the court’s powers under Chapter 9 to cut their contributions to CALPERS, but leave it up to CALPERS to figure out if CALPERS has the authority to adjust downwards the employees-of-bankrupt-cities present or future benefits, the burden of paying the bankrupt cities’ full CALPERS contributions will likely be re-allocated to solvent cities and other public agencies, eating into the solvent public agencies’ operating funds. That is very bad news, because solvent public entities like Newhall County Water District have already had to make massively increased CALPERS contributions because of CALPERS’ investment losses…and the solvent public agencies’ CALPERS contributions have not yet been adjusted upward, a second time, to reflect the fact that just recently CALPERS learned that they were doing their mathematical computations wrong, in terms of pension accounting rules, and that CALPERS is underfunded to the extent of roughly 20% of its principal balance. Even solvent California cities and other public agencies are sailing into a sh*t storm of unintended consequences. Many seemingly solvent California public agencies could end up in Chapter 9 because of the domino effect of economic failures of other public agencies and a realization that CALPERS is itself unable to make the pension payments it has promised. What, if anything, are Santa Clarita’s 5 Council members and senior staff doing, in terms of planning for a doubling of the city’s pension contribution costs? Is the city continuing to spend “general fund” money on boondoggles? Are the local water agencies, also CALPERS participants, still spending its cash to pay for infrastructure which rightly should be paid for by local developers?
  63. SamJuly 12, 2012 at 6:44 AM PT
    What was CalPERS estimated loss on their investment in Santa Clarita?
  64. Coastal SageJuly 12, 2012 at 12:29 PM PT
    The simple answer is more than $1Billion lost by CALPERS, based on what we saw in the LandSource bankruptcy file. CALPERS first invested in a limited partnership called MW Housing Partners II. A Weyerhaeuser entity and an entity managed by a Mr. Victor MacFarlane were the general partners, contributing skill but little money to the limited partnership. CALPERS contributed approximately $700 Million to MW Housing Partners II. MW Housing Partners II’s assets were unmortgaged lots in California, Nevada and Texas, which they hoped to sell to Lennar, in what was called a land banking transaction, which in layman’s terms was an option for Lennar to purchase the lots, one by one, as needed to build houses.. By mid 2006, MW Housing Partners II realized that Lennar was not going to buy their lots because of the slow down of the market for purchases of new homes. As a result, MW Housing Partners II used its title to $700 Million in lots as an equity contribution, plus $300 Million in cash, to buy a 1/3rd ownership an Delaware LLC called “LandSource”. That purchase of the 1/3 LLC interest in LandSource closed escrow at the end of February 2007. As a result, MW Housing Partners II’s equity account in LandSource was approximately $1 Billion. LandSource had been a pre-existing entity, a Delaware LLC. The other two LLC members of LandSource were Lennar and LNR, owned by Cerberus Capital. LandSource owned the stock in Newhall Land and its important subsidiary Valencia Water Company, the undeveloped land in Stevenson Ranch, Mare Island, partial ownership of a housing tract in Fairbanks Ranch (San Diego Co.), an office building in Venice, CA which was being converted to condos, and other less interesting real estate. When MW Housing Partners II bought in to LandSource, LandSource obtained ownership of the $700 Million worth of lots previously owned by MW Housing Partners II. Immediately after the CALPERS investment in LandSource/Newhall Land deal closed, the parties graciously gave an interview to Big Builder magazine describing their deal: http://www.builderonline.com/big-builder/feature–a-place-like-no-other.aspx (The information in the story matched the information in LandSource’s later bankruptcy court filings.) What was not publicized was that Lennar and LNR did not simply sell 1/3 interest in LandSource for $300 Million plus the MW Housing Partners II lots. Instead, Lennar and LNR wanted a distribution of cash out of LandSource. Since LandSource had little cash other than CALPERS’ $300 Million, the 3 LLC members agreed to go out and mortgage all of LandSource’s real estate, so that each of Lennar and LNR could take approximately $450 Million in cash out of the company. That meant that all of Newhall Land’s real estate was to be mortgaged, and all of the lots contributed by MW Housing Partners II / CALPERS were to be mortgaged to obtain the $900 Million to make the cash distributions to Lennar and LNR. As a result, concurrently with the closing of MW Housing Partners II’s purchase of its 1/3 ownership interest in LandSource, all of LandSource’s real estate was mortgaged to obtain $1.2 Billion in loans from Barclays Capital, a subsidiary of Barclays Bank (that same British bank which was fined hundreds of millions this year for fraudulently “fixing” the interest rate called LIBOR.). Approximately $900 Million of those mortgage loan proceeds were distributed to Lennar and LNR, as a loan some people call a bullet, with a less than 5 years maturity date. The rest of the loan was to be used as an operating line of credit for LandSource. Barclays had an appraisal of all of LandSource’s real estate which valued it, as of late 2006, at approximately $3 Billion, i.e. a 40% loan to value ratio. The LandSource LLC operating agreement and the management agreement LandSource and Lennar, (where Lennar worked as LandSource’s LLC Manager,) required LandSource LLC to pay “monthly management fees” to Lennar, and to cover the costs of Lennar’s overhead in running LandSource.. If LandSource didn’t have the cash to pay the management fees or the cash to reimburse Lennar for its costs, all 3 of the LLC members were supposed to contribute more money to pay those operating expenses. CALPERS public accounting showed that MW Housing Partners II paid, at the very least, several hundred thousand dollars in management fees to LandSource (for Lennar) and to Weyerhaeuser and McFarlane. Those management fees pushed CALPERS investment in LandSource to something closer to $1.5 Billion. The voting structure of the LandSource LLC was that Lennar made day to day operating decisions and each of the 3 LLC members had to approve big decisions. If one LLC member would not approve an action, it was treated as a veto, and the 3 LLC members would have to come up with another course of action to keep LandSource operating. CALPERs also funded the attorneys fees of MW Housing Partners II to set up the LandSource deal. The amount of those attorneys fees were never disclosed. The lawyers MW Housing Partners II used was a very sophisticated law firm in San Francisco, which billed more than $500 per hour for its lead lawyer’s work on the case. Apparently Mr. MacFarlane was the “business decision maker” for the closing of the purchase of the 1/3 interest in LandSource and the acceptance of the terms of the Barclays Capital mortgage loans by LandSource. By the end of 2007, Barclays re-appraised the real estate collateral owned by LandSource, and its value was down to $1.2 Billion or less. The realistic impact of that appraisal was to completely wipe out MW Housing Partners II / CALPERS equity ownership in LandSource and its assets. As shown in the Bankruptcy Court files, Barclays made a demand to LandSource LLC under the loan documents, that LandSource re-balance the loan to value ratio by paying down the mortgage loan so that it was no more than 40% of $1.2 Billion. According to Bankruptcy Court documents filed by LandSource, at least one of the LLC members refused to contribute to that pay-down of the mortgage loan. It has always looked to us like CALPERS was the LLC member who refused to contribute more money to LandSource LLC. As a result, Barclays declared the $1.2 Billion mortgage loan in default. Lennar went out and hired the most famous bankruptcy lawyers in NY, Weil Gotschal & Manges, who filed a Chapter 11 bankruptcy for LandSource in Delaware. By and large CALPERS and MW Housing Partners II did not publicly participate in any of the LandSource bankruptcy court proceedings, which was consistent with their walking away from their $1.5 Billion investment in LandSource. Essentially, Lennar employees were the “client” for the purpose of giving the LandSource bankruptcy lawyers direction and approval of what they were doing. Barclays lent more money to LandSource, to allow it to continue operating for a year. However, at the end of the year Barclays did not see the 3 LandSource LLC members contributing more cash to LandSource, or paying off the loan balance which had reached approximately $1.6 Billion, and the value of the LandSource real estate had declined further. As a result, the mortgage lender, Barclays, filed a lender oriented Chapter 11 Plan with the court, essentially saying they wanted to take ownership all of LandSource’s entities (like Newhall Land) and all of the real estate on which it had mortgages. Barclays plan was that LandSource’s unsecured creditors, including Santa Clarita construction professionals and contractors, would get nothing. Neither CALPERS nor LNR objected to that Chapter 11 Plan. As the Chapter 11 Plan went forward towards approval, Barclays began to arrange the sale of “pieces” of its mortgage loan to hedge funds, who, after the effective date of the Chapter 11 Plan would become the co-owners of LandSource. Lennar saw an economic opportunity, so it “bought a piece of the Barclays loan” for a fixed sum, paid to Barclay
  65. Cheryl PhillipsJuly 12, 2012 at 6:30 AM PT
    If my memory serves me correctly wasn’t Marsha McLean the reason Trautman lost her seat on the Planning Commission?
  66. Timothy Myers SR.July 12, 2012 at 6:37 AM PT
    Yes. Trautman was originally a McLean appointee but she got removed in 2010 when Trautman supported Gauny for City Council against the incumbents.
  67. Bill ReynoldsJuly 12, 2012 at 9:57 AM PT
    Favoring Trautman this go-round will NOT save Miss Marsha’s gig.
  68. Coastal SageJuly 12, 2012 at 3:26 PM PT
    From your lips to God’s ears.

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