Despite Influence Buying Suspicions, Beard Threatens Suit If City Suspends Project

The San Bernardino City Council’s decision against imposing a stop work order on developer Scott Beard and his company, 27th Street TAD, LLC, is looming ever larger in sparring over the city’s approval of a 38,150-square-foot building for a welfare office near the confluence of the Second, Fifth and Sixth wards in northwest San Bernardino.
San Bernardino is already host to three transitional assistance department facilities operated by San Bernardino County’s human services division, one at 2050 N. Massachusetts Avenue, another at Fourth Street and Waterman Avenue, and a third at 1895 Del Rosa Avenue, built in 2016.
The transitional assistance department, which is sometimes referred to by its acronym TAD, provides a wide array of federal and state-mandated social services and income assistance programs to the residents of San Bernardino County, particularly those whose loss of jobs or income has put them at risk of becoming, or has rendered them, homeless. In common parlance, it is referred to as a division of the welfare system.
The site where Beard is now in the process of constructing the building, the northwest corner of 27th Street and Little Mountain Drive in San Bernardino, also described as Assessor Parcel No. (APN) 0148-021-66-0000, lies along the periphery of the Muscupiabe District, an historic neighborhood nestled between the triangular intersection of the 210 Freeway and 215 Freeway, contained within the city’s Second Ward and immediately adjacent to Ward Five, and a stone’s throw across the freeway divide to Ward Six. Wards Two, Five and Six, are represented by council members Sandra Ibarra, Henry Nickel and Bessine Richard, respectively.
The project was approved last year, after the November 2018 election was held, but before those elected in that contest were established into their positions as mayor or council members. Thus, the approval of the project came during the tenure of the city’s immediate former mayor, Carey Davis. Davis, who was in office for nearly five years, was defeated in November by John Valdivia, who had been a member of the city council in the Third Ward since 2012 following his election in 2011, at which time the city was holding its municipal elections in odd-numbered years. Throughout Davis’s time in office, Scott Beard had been one of his major political backers, providing Davis’s campaign fund with substantial amounts of money and other assistance in his electioneering efforts, including his reelection effort against Valdivia last year.
In this way, the timing of the approval was noteworthy, coming as it did in a rushed fashion just weeks before Davis left office. Moreover, there were a number of other anomalies in the consideration and approval of the project. Instead of the project being presented to the city’s planning commission for analysis, recommendation and approval before being signed off on by the city council, the city’s development and environmental review committee, consisting of various members of city staff, primarily department heads and those from the community and economic development department, vetted the project. This was done outside a public venue, with no opportunity for members of the public to scrutinize and analyze the project, its documents or particulars.
While at the county level and at the internal city level the project was clearly defined as what it was – a building to house an office of the transitional assistance department, a division of the county’s human services department, at one stage the city utilized an architect’s description line on a rendering for the building which substituted “resources” for “services” in the heading human services. This changed the implication to suggest that the building was intended to house the county’s human resources or personnel department. A second misnomer unrelated to the blurring of services/resources nuances occurred when in internal memos to the city council relating to the project and in the disclosure notifications to the residents living in proximity to the project, the building was referred to in planning profession jargon as “office professional,” which in common parlance was taken to mean the structure would be a professional office building, which rubric, technically, a transitional services office falls within. Ultimately, however, a significant segment of the populace, including many people living within the Muscupiabe District, were unaware of the actual intended occupant of the building.
That distinction was applicable in another crucial consideration, which related to the city’s development code and zoning regulations. The neighborhood office zoning that the property at Little Mountain Drive and 27th Street falls under is different from office commercial zoning. In essence, neighborhood office zoning allows for offices in which the businesses contained therein have employees who can carry out clerical or business functions individually or among themselves without interacting with customers, clientele or outside members of the public. Office commercial zoning allows both employees and customers to access the premises on a continuous, ongoing and daily basis, anticipating a high volume of vehicular and foot traffic. Because of the withholding of information that the tenant for the office building that Beard/27th Street TAD, LLC intended to construct was the transitional assistance department, which if provided would have signaled that there was to be a significant degree of vehicular and foot traffic onto and out of the site, neither members of the city council nor the public were adequately apprised of what the full impact of the project would be if it were approved. Given subsequent developments, including widespread discomfiture among residents in the Muscupiabe District over the placement of a welfare office in their neighborhood, there is suspicion that officials in the city’s community and economic development department, at the behest of Mayor Davis in the final throes of his primacy at City Hall, were militating to provide a favor to one of his political donors by deliberately processing the project application under a shroud of secrecy and misrepresentation to minimize opposition at a critical earlier point when the project’s approval could have possibly been prevented.
After Beard/27th Street TAD, LLC  began work at the project site by fencing the property off and initiating work preparatory to grading, some local residents inquired as to the nature of the project, learning definitively at that point the project was a transitional assistance facility – a welfare office. Word spread almost instantaneously throughout Muscupiabe, and wave upon wave of residents began registering protest with the city and with city officials.
Fifth Ward Councilman Henry Nickel and Second Ward Councilwoman Sandra Ibarra emerged as the members of the council most animated about the pending project, and at the August 7 city council meeting, they insisted that the burgeoning crisis come up for discussion. Former City Attorney James Penman advised the city that it “needs to preserve the status quo and freeze the situation. You protect the city from liability by issuing a stop work order. You also protect the developer, because he doesn’t continue to build and spend money.”
Penman said Beard would continue with the project based on the permits that were issued, whether they were lawfully issued or not. “You have to preserve the city’s position,” Penman told the council. “You have to stop and freeze everything in order that you can do a proper investigation to determine what happened. If you don’t issue the stop work order, the developer continues to build and acquires vested rights. Later [when] the residents get a writ of mandate and make him stop, he is going to sue the city for allowing him to continue to build and spend money. It’s a Catch-22 situation.”
Ibarra attempted to usher the council toward action before Beard proceeded with actual building activity beyond the grading he had done up to that point. Ibarra asserted that the nearby property owners “were misled by the notices they received in October. I think it is fair that we ask that property owner to apply for a conditional use permit and allow for a public hearing allowing the residents who are going to be greatly affected by what’s going to happen with that project being put up in their neighborhood. We were highly misled. I don’t know how it goes from a human services building to a human resources admin building. The traffic is going to change drastically in that neighborhood. There is a preschool across the street and maybe two or three blocks over is Davidson Elementary, so a traffic study is needed. If he can apply for a conditional use permit the right way as it should have been, I have no objection, but it has to be done the proper way.”
Nickel made a motion to “direct our city manager to issue immediately a stop work order on this project and take appropriate corrective action.” That motion was seconded by Ibarra, but before a vote was taken a discussion ensued in which City Attorney Sonia Carvalho cautioned the council against imposing a stop work order on Beard after the city had given him approval to proceed with the construction of the building. She advised the council that it could yet seek to require that his tenant – the county – obtain a conditional use permit to operate a social services office at that location. Putting Beard and his tenant on notice that the transitional services facility may not meet the city’s codes and standards could potentially give the city the leverage to head off the eventuality of the operation setting up at that location, she implied.
Sensing that there was not will on the council to move ahead with the stop work order, Nickel made a motion that the city council direct City Manager Teri Ledoux and city staff to proceed with the ongoing investigation and report its findings back to the city council on August 14.
Councilman Jim Mulvihill suggested that Beard be prevailed upon to voluntarily impose on himself a “good faith stop work order.”
Though Ledoux went through the motions of conducting an investigation into how the project had garnered approval, she did not, the Sentinel has learned, extend that inquiry to determining if there was any overt communication among city officials to prevent the matter from going before the planning commission or if there was any discussion among city officials about heading off the prospect of public opposition manifesting before Beard’s project was provided with approval. For reasons Ledoux has not made clear, when her report was delivered to the council on August 14, she had not reviewed emails from, to and between Davis, then-City Manager Andrea Travis-Miller, Community and Economic Development Director Michael Huntley, other key members of the Community and Economic Development Department, Beard or Beard’s representatives in the timeframe leading up to the approval of the project in November.
It does not appear any representative of the city followed up on Mulvihill’s suggestion and requested of Beard that he voluntarily suspend work at the project site. Beard said publicly on August 8 that no such request had been made of him. Whether, indeed, Beard was requested to discontinue work on the project or not, he seemingly has no intention of doing so. As of earlier this week, concrete was being poured at the site, and the building’s foundation was being laid.
This week, at its August 23 meeting, the city council adjourned into a closed session, at which point they were informed that Beard has threatened the city with legal action if it in any way obstructed the project, including, as Carvalho suggested, requiring the county to obtain a conditional use permit before it could operate the building as a transitional services facility.
Because of the potential for adverse legal action against the city, the city council essentially acceded to Ledoux’s decision to withhold the results of her investigation from the public.
At this point, the city’s failure to heed Penman’s recommendation that the city suspend work at the site to minimize Beard’s costs stands as a lost opportunity.
Whether, indeed, Beard is actually prepared to initiate a legal suit against the city or whether that threat is a bluff is unclear. Were a suit to be filed, elements within two existing resident interest groups, the Muscupiabe Neighborhood Association and the Blair Park Neighborhood Association, could file separate lawsuits or band together to file a single suit against Beard and 27th Street TAD, LLC, alleging they are interfering with the Muscupiabe district residents’ rights to equal protection under the law and to petition the government for the redress of grievances, and that they have been victimized in this regard by Beard and 27th Street TAD, LLC through the application of political grease that garnered Beard and his company an advantage over the city’s residents when it came to the determination of land use in the city. The primary evidence and exhibits to support such a suit would consist of the records of substantial political donations Beard made to city officials, most prominently Davis, over the years, and the suspension of the protocol normally used for the approval of development projects in the city when the planning commission was bypassed and the development and environmental review committee instead signed off on the project in a backroom at City Hall.
Moreover, such a lawsuit would very likely resurrect long dormant ghosts that Beard would much rather remain buried. In 1998, two of San Bernardino County’s top administrators, Harry Mays and James Hlawek, were indicted by a federal grand jury on bribery charges that related to their acceptance of cash in return for arranging lucrative county contracts for several entities. Ultimately, Hlawek began cooperating with the FBI, telling agents that Mays, who was in partnership with Beard and Lance Goodwin in a company known as SHL Associates Ltd., provided him with a briefcase stuffed with $60,000 in cash during a meeting he had with Mays, Eaves and Beard as a payoff for securing a $26 million 15-year county lease for a K-Mart building in Rialto owned by SHL. SHL stood for Scott, Harry and Lance, so named after the three principals in the company. That lease was approved in a controversial 3-2 vote on June 23, 1997, with then-supervisors Jerry Eaves, Jon Mikels and Kathy Davis prevailing. The building was converted for use by the county’s behavioral services department. The deal was promoted by Hlawek, who was then the county’s chief administrative officer. Hlawek was Harry Mays’ protégé and successor as the county’s senior staff member. Eaves, a former Rialto mayor, California assemblyman and thereafter a member of the San Bernardino County Board of Supervisors, was the recipient of scores of thousands of dollars of political donations from Beard. Beard narrowly avoided being indicted by both county and federal prosecutors during the scandal. Eaves was less fortunate, and was charged or indicted on both state and federal counts, after which he was eventually, in 2003, removed from office.
In the years since, Beard has worked toward reestablishing his reputation and the good name of several business entities with which he is associated. Thus, his threatened lawsuit against the city is considered by some to be a paper tiger, as such a suit would very likely garner negative publicity that in the long run would cost him more in the loss of future contracts than he might hope to recover from the city.
“Even paper tigers can get expensive and can be very politically damaging,” Councilman Henry Nickel observed. “We as a city are not in a position to afford any more lawsuits. We have many lawsuits currently in many stages of litigation. It is unfortunate, but we are not in a position financially to defend every lawsuit that comes our way.”
Nevertheless, Nickel said, if Beard were to file a suit against the city for insisting on the county first obtaining a conditional use permit before initiating its transitional assistance operation at Little Mountain Drive and 27th Street “I think it would be frivolous. I don’t think he will prevail in the end on something like that. I have looked at the documents. His permit specifies something different than what he says he is entitled to. I don’t see anywhere in his application nor anywhere in the documents where it is reported to be a welfare office. It was an office use quote unquote. He applied for something that didn’t require additional security. Now he is saying if you try to stop me I will sue you. That is the purpose of the development code, and its enforcement is meant to ensure this type of behavior does not occur. The residents need to have their interests protected and the city needs to have its interests protected as zealously as the developer’s. My fear is that is not happening. My hope it the council will have the courage to stand up for our residents and protect their interests and make sure the law is upheld.”
Nickel continued, “If we don’t uphold the development code, this will embolden those who do not want to comply with it. Developers will thumb their noses at us by threatening lawsuits. This will create a death spiral for the city. If you can’t defend your city or your codes, of what use is the city?”
Nickel quibbled with those who advocated slapping Beard with a stop work order. He questioned whether that course of action would be efficacious.
“He is authorized to build an office building,” he said. “There is no contesting that. He is not authorized to use it as a welfare office. If we stop him from constructing the building we will be liable for damages. In terms of the construction of an office building, in my mind that needs to continue. He is allowed to build an office building. He is not allowed to accept tenants from the transitional services department or open it as a welfare facility.  There are more restrictions on an office building in a residential setting than there are on an office building in a commercial zone. In a residential office building you have employees sitting in cubicles and desks. That is different from having customers coming in at all hours of the day, driving in and dumping trash and causing issues in the surrounding neighborhood. At that point we have a different use. The minute Mr. Beard leases the build for use by the transitional assistance department he is in violation of the permit he was issued. We need to follow the law, respect the rules and go through the process so we can put some mitigation in place to limit the impacts.”
Nickel insisted, “The city never permitted a social services facility at that location. Under our code a social services building is different from an office building. Clearly, the application did not reflect the intent to use it it as a welfare office. The building was approved as an office building. As of today, they have a permit to operate it as a professional office building. A conditional use permit would provide for mitigating the impacts, building a wall around the site, coming up with a security plan and other items stipulated in our development code. We cannot overturn his permit to complete a building. We can require that the county get a conditional use permit if they seek to have occupants that are other than a professional office provided for in our approval. This will have a major impact on people in the surrounding area.  We have to mitigate those impacts.”
Of Beard, Nickle said, “Either he misinterpreted our code or he screwed up. And we screwed up. It was not proper to have the development and environmental review committee approve this project application.”
Nickel said he suspected but could not at this point prove there was some collusion between the Davis regime and Beard to sneak the project by everyone.
“In the investigation that we requested, the [current] city manager [Teri Ledoux] did not produce the emails from members of the development and design review committee, [former City Manager] Andrea Miller, Carey Davis and Scott Beard. I have requested that all of those be produced. I anticipate there may be something there. I haven’t seen anything up to this point. The city manager hasn’t provided emails or communications or phone records yet.”
Nickel said the project glided by without his scrutiny at the time. He said, “I casually heard about it about a year ago. I was told it was going to be a human resources building. All this time that is what the building was intended to be used for.”
He did not fully understand that the county was going to install the transitional services department there “until six weeks ago,” Nickel said. “That was not what it was represented to be originally. We were told it was a human resources building.”
-Mark Gutglueck

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