Presented by: Special Counsel Aleshire & Wynder, LLP Aleshire & Wynder, LLP David J. Aleshire Anthony R. Taylor Hagen, Streiff, Newton & Oshiro, Accountants, PC Chris Money
� OCGPC formed December 2003 (1 st Plan $353M). � OCGPC advisory to City Res. 6-42 (April 2006). � 2004 Business Plan: $401M, 6-7 years � Developer funded: $200M prepay Dev. Fees + $201M imprvts � Developer funded: $200M prepay Dev. Fees + $201M imprvts � 3700 Ac purchased by Lennar for $649.5M in February 2005. � 1347 Ac Deeded City July 2005. � Design competition: 30 to 7 firms. Design Studio created/selected Ken Smith + Gafcon + Consultants.
� Budget Estimate: September 2007 est. $979.8M; � January 2008 est. $1.24B; � July 2008 $1.6B (no vertical: Bovis) � Gafcon – 2007 estimate $3 – 4B but private. � Preview Park: Needed Amenity. Balloon. Cost $25M � Preview Park: Needed Amenity. Balloon. Cost $25M � 2009 Business Plan: Western Sector $65.5M on 88 Ac. Open ’13 � End 2013: $250M spent: how spend $250M for 88 Ac? � June 2013 Retained HSNO for Audit
$260M spent on Park to date. 88 Ac improved park area � � Performance Review: 7 years; 23 depositions; 1000’s pages contracts, reports, documents, transcripts reviewed. � Great Park Review by DA; 2 Grand Jury investigations � Great Park Review by DA; 2 Grand Jury investigations � Jan. 8, 2013 Council Subcom. formed; Audit support Judge Stock � June 2013 HSNO after competitive bid; Prelim. Rpt. Jan. 2014 � June 2014 A&W to take depos. and deal with adversarial parties � Last depositions: 2 in March with Agran depos. March 13, 2015
� Follow up on various findings in our Preliminary Report � Review invoices and documents provided by the city and outside vendors � Work with special counsel on deposition testimony � Work with special counsel in analysis of documents provided by outside vendors.
� Update the revenue and expense schedules to include the beginning of the park through 2013 � Determine the cause for excessive change orders � Retention of MCK Associates as Program Manager � Retention of MCK Associates as Program Manager � Review vetting of the Design Studio � Magnitude of duplicate billings � Contracts with Forde & Mollrich � Hiring of George Urch � Feasibility Studies
� Total revenue through 12/31/13 - $287.2 million � Total expenditures through 12/31/13 - $251.4 million � Cash balance as of 12/31/13 - $36 million � Cash balance as of 12/31/13 - $36 million
� The design competition was conducted without providing the The design competition was conducted without providing the The design competition was conducted without providing the The design competition was conducted without providing the participants with a design and construction participants with a design and construction participants with a design and construction participants with a design and construction budget budget budget budget � “My recollection is they were told not to concern themselves unduly with the question of the ultimate cost of producing, on the ground, whatever it is they might design, but bring forward a the ground, whatever it is they might design, but bring forward a competitive design that has a real theme to it, has features that are buildable.” Deposition of Larry Agran, page 41-42
� Once the Design Studio was selected, Once the Design Studio was selected, an an overall budget to overall budget to Once the Design Studio was selected, Once the Design Studio was selected, an an overall budget to overall budget to construct the Great Park was not given to the Design construct the Great Park was not given to the Design Studio construct the Great Park was not given to the Design construct the Great Park was not given to the Design Studio Studio Studio � “Q: And in terms of the vision you’re talking about, did Chairman Agran also discuss with you the practical concerns of budget, business plan, revenue projections, the business side of the operations? operations? ”A: He wasn’t as concerned about that. He had the attitude that “We’ll figure it out. Let’s design something great, and then let’s figure out how to make it happen.” Deposition of Yehudi Gaffen, page 193
� Work Work Work Work was performed at the request of Mr. Agran that was out of was performed at the request of Mr. Agran that was out of was performed at the request of Mr. Agran that was out of was performed at the request of Mr. Agran that was out of scope scope scope scope � “Q: Do you recall any encounters with Mr. Gaffen concerning scope of work problems on invoice amount problems? ”A: Yes Q: Where he related to you that, quote, “Larry told us to do it”? A : Yes” Deposition of Walter Kreutzen, page 43
� We cannot conclude that Gafcon had duplicate billings on We cannot conclude that Gafcon had duplicate billings on We cannot conclude that Gafcon had duplicate billings on We cannot conclude that Gafcon had duplicate billings on Contract Contract Contract Contract 5759. 5759. 5759. 5759. � Due to the broad scope in Gafcon’s awarded contracts, we cannot determine if duplicate charges were invoiced and paid. � Mr � Mr Mr Mr. Agran misled the public in January 2006 when he said the Mr Mr Mr. Agran misled the public in January 2006 when he said the Mr . Agran misled the public in January 2006 when he said the . Agran misled the public in January 2006 when he said the . Agran misled the public in January 2006 when he said the . Agran misled the public in January 2006 when he said the . Agran misled the public in January 2006 when he said the . Agran misled the public in January 2006 when he said the Great Park could be built for $401 million, when he had been Great Park could be built for $401 million, when he had been Great Park could be built for $401 million, when he had been Great Park could be built for $401 million, when he had been told in November 2005 it would cost approximately $1 billion. told in November 2005 it would cost approximately $1 billion. told in November 2005 it would cost approximately $1 billion. told in November 2005 it would cost approximately $1 billion. � “I remember it because I heard it first in New York, as part of the competition. [ Ken Smith ] said “We’re presenting this to you assuming we’re selected. And if we were selected, we believe all of this can be built for $998 million.” A billion dollars. That was in 2005.” Deposition of Larry Agran, page 42
� January 2006: After New York Trip; Design Studio selected; Agran states $401M buildable with canyon, lake element: In New York Smith told Agran $1B was true cost. � January 2006 – September 27, 2007: Master Plan ($10M) � July 24, 2007: Schematic Design starts ($27.3M); Budget $979.8M (9/27/07) � January 2008 Design Studio estimates $1.24B � July 2008 Bovis Estimate $1.6B without vertical � 2007 Gafcon internal estimate with vertical was $3-4B
� 2004 City Business Plan 2004 City Business Plan 2004 City Business Plan: $401M; funded by Developer 2004 City Business Plan $200 fees + $201 improvements � March 2005 Adoption of Redevelopment Plan March 2005 Adoption of Redevelopment Plan March 2005 Adoption of Redevelopment Plan March 2005 Adoption of Redevelopment Plan � RSG RSG RSG RSG Estimate of Revenue for Redevelopment Estimate of Revenue for Redevelopment Estimate of Revenue for Redevelopment Estimate of Revenue for Redevelopment Build Out: Begin 2006-07 complete 9 years Total: 40 years raise $978M Present Value: $218.5M City $134M Loan to Agency City $134M Loan to Agency 2009 Business Plan 2009 Business Plan 2009 Business Plan 2009 Business Plan P Build Out: Begin 2011-12 complete 12 years Total: 40 years, by 2050-51 raise $1.28B Present Value: $267.9M February 2009 Staff est. $1.4B cost. End Schematic Design March 2009 Board aprvs.500 Ac plant:36 mo./w Design Studio CEO Ellzey determines not practical. October 2009 $60 October 2009 $60 – – 64M Plan Western Sector 64M Plan Western Sector – – 88 Ac developed 88 Ac developed October 2009 $60 October 2009 $60 – – 64M Plan Western Sector 64M Plan Western Sector – – 88 Ac developed 88 Ac developed by Oct ’13. by Oct ’13. by Oct ’13. by Oct ’13.
� Preview Park Preview Park Preview Park Preview Park (approx. 8 AC) � Jan 9, 2007 Council approves 4.1M for GP Balloon � July 14, 2007 Balloon opens. � Western Sector Elements Western Sector Elements (88 Ac + 26 Ac for future development) Western Sector Elements Western Sector Elements � December 11, 2007 Balloon Enhance Project $13.9M � March 25, 2008 Expand to Preview Park � March 25, 2008 Expand to Preview Park � Incorporate Preview Park � 2009 2009 2009 2009 Business Plan Business Plan Business Plan scaled back Schematic Design of whole park Business Plan � Fiscal Sustainability � Estimate that could fund $60 – 64M in improvements � Oct. 22, 2009: $65.5 M Project deletes lake district � Complete Sept. 2013. $69.8M cost
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