By Ruth Musser-Lopez
He rode into town under a dark cloud stretching across the sunset from Desert Hot Springs, leaving $800 in the city kitty and a disillusioned city council. After a failed master plan to turn that struggling rural community into another “Coachella Valley” music festival venue, Rick Daniels was definitely an unknown venture for the City of Needles, which hired him as city manager in August 2013, unanimously approving a $197,000 contract, with a $10,000 automatic pay bump each year he managed to stay in place.
With rumors and reports in wild circulation, most folks in Needles were skeptical about the new manager. His track record was not comforting, as he seemed at the end of his rope in Desert Hot Springs and his previous experience was not in the public sector but rather as a trash company executive. Many wondered aloud why he was offered such a high salary when he was not in the strongest of bargaining positions given that he was quite obviously being chased out of Desert Hot Springs.
That was the scene four-and-and-one third years ago, when he took over the reins of the town where the cannabis industry had been invited in. Now, four operating medical marijuana dispensaries later and with five cannabis cultivation facilities (“grow ops”) and/or manufacturing plants in operation, with 8 or 9 out of 16 approved operations under construction and 15 more applications in the works scheduled for approval before the end of the year, attitudes in Needles have changed.
Property values are booming and there is a hope that Rick Daniel’s new vision, “solar panels on every roof top,” like a chicken in every pot, will materialize with the new-found electrical utility funds generated from all of the grow operations, that must, by state law, be spent on electric utility enterprises and conform with Proposition 26, the state’s green energy plan. The town now sports two new traffic lights at major intersections and the storefronts are on a trajectory of radical improvement as they are reinvented for grow and manufacturing operations. For example, the kitchen of the old dilapidated Kentucky Fried Chicken branch which had gone out of business during the economic down turn around 2008-2009 is now reconditioned into an enterprise to be operated by Dino DeFazio. Moreover, Yoni’s old billiard hall, an out of commission cement factory and a historic, World War II era hangar are all now licensed as grow houses. A downtown car lot, once the home of the Ford Dealership that abandoned Needles and moved operations to Bullhead City, was reportedly purchased for $100,000 a few years back and was recently sold for over a million. The start-up costs for rehabbing old structures already hooked up to water, sewer and electric is exponentially less than developing virgin land requiring environmental review and mitigated declarations. Thus the face of the town is blossoming like the yellow rose of the cannabis bud.
With the promise of hundreds of local jobs, the requirement for priority local hiring and the need for new housing to support cannabis industry employees, rental values have climbed and the real estate market is soaring, people in Needles, in general, are filled with new hope.
That is why everyone is wondering why Rick Daniel’s employee evaluation has been held up for months and what is up with the city council agenda item referencing “Public Employee Discipline/Dismissal/Release” which took place in executive session at the city council meeting for the third time on Tuesday night without any “reportable action.” The first two executive sessions on the topic were special meetings, one that called city attorney John Pinkney to make the costly trip to town from his own home in Palm Desert. While the public is not informed as to the nature of the executive discussion, also on the agenda for executive session are other matters that are most likely related.
For one, there is the matter of the city employees represented by the Teamsters. During the last election the Teamsters spent considerable funds to elect and were successful at getting their candidates, Tona Belt, Clayton Hazlewood and Shawn Gudmundsen elected. At the time, the Teamsters conducting the interview questioned every candidate on the position each held with regard to the cannabis industry and propounded, somewhat dubiously, that it was the hard work of the city employees that brought about the new business to the town. It was also made clear by the Teamsters representatives that it was the union’s position that employees were all due for increases – both wages and benefits – and that this was a priority above all other uses of the cannabis industry revenues realized by the city. The city’s representative in discussions with the labor negotiator from Teamsters Local 1932 is Rick Daniels. Daniels was scheduled to be at the executive session on Tuesday night to go eyeball to eyeball with the representatives of the Needles Unclassified Employees Association (NUEA) and San Bernardino Public Employees Association (SBPEA). SBPEA is the bargaining unit that is now affiliated with the Teamsters. One theory brought about because of the secrecy with which these discussions are carried out is that the city employees via the three new council members who were elected using Teamster resources—Belt, Hazelwood and Gudmundsen—are holding Rick Daniels hostage with charges of “wandering hands” in City Hall. That premise fits in nicely with events on the national scene and would explain why Rick’s evaluation has been held up for months and why there is a constant threat of dismissal.
A variant theory is that the discussion relating to possible dismissal pertains to another city employee besides Daniels.
If the executive discussion does concern Daniels’ dismissal, then the side story is why John Pinkney, the city attorney has never declared a conflict of interest, given persistent reports that he is also Rick Daniel’s private attorney. That Pinkney is Rick Daniel’s private attorney would fit with how Daniel’s ended up in Needles and how former council members Jimmy Lopez and Linda Kidd came to learn about Daniel’s situation in Desert Hot Spring and paid him a personal visit to interview him for the Needles job.
A further theory is a reported threat of litigation from one of the cannabis operatives, Ron Kemper, which has been suggested as the basis for the current tension. On the agenda for discussion in closed session were two items concerning litigation. On the first item under California Government Code section 54956.9(d)(4), no decision was made as to whether the city should initiate litigation, city officials announced upon returning from that closed session. On the second item under California Government Code section 54956.9(d)(2) and (3) there was no decision made as to whether there was significant exposure to litigation and no decision was made to decide whether or not a closed session was even authorized. None of this really makes sense except in the context of the next executive item—-the Teamsters coming for their dues.
The Teamsters are not an ordinary union. In addition to representing workers in the private sector, it represents local government employees who are in a position to elect their own bosses. This is a “so-called union that is all about money” one Needles resident who wishes to remain anonymous told the Sentinel. “The Teamsters broke our picket line up at Edison’s Mohave Generating Plant. They don’t care about principle. All they care about is money. They ran right through our lines and put at risk jobs and salaries being negotiated by the AFL-CIO.”
Daniels did report that collective bargaining happens at the end of the fiscal year and negotiations begin the first of the year. He told the Sentinel that there has been a substantial increase in revenue and decisions will need to be made with respect to prioritizing payouts, i.e., what takes priority—payroll, roads, sidewalks, the basketball court, etc.
In the meantime, while all of the new conditional use permits are being processed awaiting for state approval, what is not being discussed, at least in the public forum, is the new order in Needles that involves power brokers in the form of corporate bosses and employee voting power. A concentration of power in the hands of those who are making the new investments could change the complexion of Needles politics for years to come.
“Medical Investors Holdings has already established a huge footprint in Needles with developments at the West Needles interchange, the old Kentucky Fried Chicken building on Needles Highway and the ‘Nursery Project’ in downtown Needles,” David Buckley informed the Sentinel. “What is known of the ownership of Medical Investors Holdings LLC is not conducive to earning the trust of the Citizens of the City of Needles. Medical Investors Holdings is represented by revolving spokespersons at Needles City Council and Needles Planning Commission meetings and it is not clear who is the managing partner is. One of the identified owners of Medical Investors Holdings is Dino DeFazio who has an aversion to publicity and was heard saying, ”Don’t mention my name, as I am too controversial.”
DeFazio, a real estate developer from the Apple Valley, is the only remaining defendant in the ill-ll fated Colonies corruption case. He is accused of perjury while testifying before a grand jury, which might explain his aversion to publicity. In addition to the charge of perjury to the Grand Jury, Dino Defazio was involved in the Adelanto Charter Academy scandal in which monies were allegedly misdirected to private accounts from the now defunct charter school, which was ordered closed by the State of California. Also recognized is the existence of a very close relationship between Dino DeFazio and now-disgraced former First District Supervisor Bill Postmus and his successor, Brad Mitzelfelt, who was Postmus’s chief of staff.
Raising local Needles residents’ curiosity is DeFazio’s decision to invest in Needles when his neighboring City of Adelanto offers medical marijuana business permitting. The allegations surrounding the Adelanto Charter Academy has been considered as a possible reason for the Needles move, “out of sight, out of mind,” as the saying goes.
According to David Buckley, “Medical Investors Holdings LLC was initially entitled Medical Investors Group and came to Needles making the pitch that it was somehow involved with the City of Hope and its products would be marketed exclusively to the City of Hope. Numerous inquiries as to the relationship were not responded to by the City of Hope.
Also identified as investors in Medical Investors Holdings LLC are Robert Kaplan and Randy Coleman, who along with several employees, including Colorado-based cannabis developer Drew Milburn, have all made presentations to the Needles City Council. The identities of the other owners of Medical Investors Holdings are purely speculative at this point, shielded from view and media scrutiny by the Needles City Council, which at any time during the permitting process could have demanded a true list of owners of Medical Investors Holdings LLC but chose to allow the owners to maintain anonymity. It is unknown how many other Investors in the many Needles cannabis projects have been shielded by the Needles City Council,” Buckley said.
On the agenda of the Needles City Council for the month of December 2017 are no less than fifteen medical marijuana projects, including Conditional Use Permits for cultivation, manufacture and distribution operations by William Keating at 407-409 E. Broadway; cultivation by Brian Danaher at 1130 E. Broadway; cultivation by David Deatley at 111 and 138 “D” Street, and cultivation by Robert Kaplan (Medical Investors Holdings LLC) at 3253, 3259, 3265 and 3271 Needles Highway, south of the Pair-A-Dice storage facility.
By Ruth Musser-Lopez