coliseum lawsuit letter

t§:JProcopio· Procopio, Cory, Hargreaves and SavHch lLP

January 10, 2012

SENT VIA EMAIL AND HAND DELIVERY

Mr. David Israel, President of the Los Angeles Memorial Coliseum Commission Los Angeles Memorial Coliseum Commission Los Angeles Memorial Coliseum 3939 S. Figueroa Street Los Angeles, CA 90037

Theodore J. Griswold Dire<:t Dial: (619) 51 S-3277

E-mail: [email protected]

Re: Los Angeles Memorial Coliseum Commission ("Commission") Potential "Master Lease" Agreement for Coliseum and pending violations of CEQA other public participation State laws.

Dear Mr. Israel:

Our office represents U.S. Capital, LLC, an interested party in the long term fate of the Los Angeles Memorial Coliseum ("Coliseum"). We have previously provided the Commission correspondence stating our concerns regarding its refusal to publicly disclose the Commission' s plans to transfer the exclusive rights and use of the Coliseum to the University of Southern California ("USC'). We remain gravely concerned about the Commission's stealth proposal which eschews the State public interest laws that guarantee fmancial, environmental and social protection of public resources in exchange for more back-room dealing. The current action of the Commission ignores public meetings laws and public and environmental review requirements. disregards the public interest in the use and future planning of vital public resources, and makes no attempt to seek fair value for the use of public resources by precluding any public bidding process for the future use of the Coliseum.

The private decision to negotiate an agreement with USC "significantly furthers a project in a marmer that forecloses alternatives" without undergoing either CEQA review or public discourse regarding the propriety of that decision. We have reviewed your meeting history and found that at no time has this matter been raised for open discussion and consideration prior to the Commission ' s decision to negotiate with USC for an agreement to tum over the management of the Coliseum to USC. It is also unclear whether the member entities of the Joint Powers Authority have each approved the proposed course of action by the Commission. We have also requested any documentation that the Commission has developed that indicates that there have been any public disclosure or involvement in the proposed agreement. Your attorney has

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Los Angeles Memorial Coliseum Commission Los Angeles Memorial Coliseum January 10,2012

responded that there are no such documents which precede your confidential negotiations with USc. Please be advised of the following:

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A decision on the proposed action without the benefit of CEQA compliance would violate CEQA mandates and be subject to immediate challenge to void the decision. The failure to publicly disclose the considerations of Commission, the rationale of its decisions and purported benefits to the people of California violates the Open Meetings Act, Brown Act and the public trust. The Commission lacks the legislative authority to undertake the actions which it proposes which would abrogate its statutory duties. The Corrunission has undertaken directional action which forecloses the consideration of reasonable alternatives and commits the Commission to a specific course of action without the benefit of CEQA review.

Each of these issues could be used in writ and other legal actions to overturn the Commission 's decision on the negotiated agreement. Our rationale follows. We urge the Commj~~;on to reverse its current course of undisclosed action and open the consideration of the Coliseum management to public discourse and consideration.

The Decision To Relinquish Management Of State Lands To A Private Entity Is A Discretionary «Project" Requiring Environmental Review.

The proposed action to significantly change the day~to~day operations of the Coliseum is a "discretionary action" by the Commission that requires environmental review under the CEQA. CEQA applies to "discretionary projects proposed to be carried out or approved by public agencies .... " (§ 21080, subd. (a).) CEQA applies in situations where a governmental agency can use its judgment in deciding whether and how to carry out or approve a project. A project subject to such judgmental controls is called a "discretionary project" (CEQA Guidelines § 15357). It is without question that the Commission is exercising its judgmental control over a public resource, and that decision could affect the human environment.

Any activity supported in whole or part by a contract with a public agency is a "project" under CEQA (Pub. Res. Code § 21065.) 'Project' means an activity which may cause either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, and which is any of the following: (a) An activity directly undertaken by any public agency. (b) An activity undertaken by a person which is supported, in whole or in part, through contracts, grants, subsidies, loans. or other fonns of assistance from one or more public agencies. (c) An activity that involves the issuance to a person of a lease, permit, license, certificate, or other entitlement for use by one or more public agencies. (§ 21065; see Cal. Code

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Los Angeles Memorial Coliseum Commission Los Angeles Memorial Coliseum January 10, 2012

Regs, tit. 14, §§ 15357 [defining "discretionary project"]; 15378 [defining "project"].) The term "project" "means the whole of an action" (Cal. Code Regs. , tit. 14, § 15378, subd. (a)) and "refers to the activity which is being approved and which may be subject to several discretionary approvals by governmental agencies." (Cal. Code Regs., tit. 14, § 15378, subd. (c).) See alsa Cedar Fair, L.P. v. City aJSanta Clara (2011) 194 Cal.AppAth 1150.

This position is consistent with the requirements of the California State Lands Commission, which administers the leasing of State lands. The State Lands Commission Guidelines dictate:

"The issuance of any lease, permit or olher entitlement/or use of State lands by the Commission requires review for compliance with the California Environmental Quality Act (CEQA). The tCTrnS of CEQ A may be found in the California Public Resources Code (PRC), Sections 21000 et seq., and in the State CEQA Guidelines, Cal ifornia Code of Regulations (CCR), Title 14, Sections 15000 et seq. No proposed project will be approved until the requirements of CEQ A have been met. "

The standard applicable for this Commission is no different.

The Decision To Pursue A Significant Change In The Management Of The Coliseum Property Through A Lease To USC Without The Consideration of Alternatives or Potential Environmental Effects Would Violate CEQA.

In order fo r the Commission to avoid further liability caused by violations of the California Environmental Quality Act ("CEQA"), we commend the Commission to the California Supreme Court's decision in Save Tara v. City o/West Hollywood (2008) 45 Cal.4th 116. The issue before the Court in Save Tara was "whether and under what circumstances an agency's agreement allowing private development, conditioned on future compliance with CEQA, constitutes approval of the project within the meaning of Sections 21100 and 21151" of the California Environmental Quality Act ("CEQA"). (Id. at 121.) The same issue addressed by the California Supreme Court in Save Tara is before this Commission now.

It is undisputed that the Commission has conducted no CEQA analysis whatsoever with respect to the proposed transfer of management of the Coliseum from the Commission to a private entity. As result, it is anticipated that the Commission's undisclosed, secret agreement with USC will have a clause in it requiring the new management of the Coliseum to undertake CEQA review in the future. However, such a commitment is hollow in that the Commission would have already turned the reins of the Coliseum over to USC, and there will no ability for the Commission to act on the management in the future.

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In Tara, the Supreme Court held that "before conducting CEQA review, agencies must not ' take any action' that significantly furthers a project 'in a manner that forecloses alternatives or mitigation measures that would ordinarily be part of CEQ A review orthat public project'" (Save Tara, 45 Cal. 4'" at 138, quoting CEQA Guidelines § IS004(b)(2)(B).) The relevant question is "whether, as a practical matter, the agency has committed itself to the project as a whole or to any particular features, so as to effectively preclude any alternative or mitigation measures that CEQA would otherwise require to be considered, including the alternative of not going fotward with the project ." (ld.) (emphasis added)

In explaining how courts should apply these rules, the Supreme Court cited with approval a passage from a CEQA treatise. The Supreme Court explained that the passage from the treatise "summarizes this approach in a useful manner." (Id. at 139.) That passage states:

"First, the analysis should consider whether, in taking the challenged action, the agency indicated that it would perform environmental review before it makes any further commitment to the project, and if so, whether the agency has nevertheless effectively circumscribed or limited its discretion with respect to that envi ronmental review. Second, the analysis should consider the extent to which the record shows that the agency or its staff have committed significant resources to shaping the project. If, as a practical matter, the agency has foreclosed any meaningful options to going forward with the project, then for purposes of CEQA the agency bas 'approved' the project."

(Id., quoting Remy el al., Guide 10 CEQA ( II '" ed. 2006) at 71 . In this instance, there is no doubt that by the Commission privately taking action to enter an agreement with USC for the management of the Coliseum, it has foreclosed alternatives that could be ordinarily considered during CEQA review.

The Supreme Court highlighted the prospective nature of CEQA review by explaining that local agencies must comply with CEQA "on any project that they intend to carry out or approve which may have a significant impact on the environment." (Id., quoting Pub. Res. Code § 21151, emphasis by Court.) The Supreme Court pointed out that an "approval" under CEQA is a decision which "'commits the agency to a definite course of action in regard to a project intended to be carried out by any person, '" and occurs "' upon the earliest commitment to issue or the issuance by the public agency of a discretionary contract, grant, subsidy, loan, or other fonn of financial assistance, lease, pennit, license, certificate, or other entitlement for use of the project.''' (Id. at 129, quoting CEQA Guidelines § IS3S2(a)-(b), emphasis added.) Given this statutory language, the Supreme Court reiterated the long-standing rule lhat ' \11 a miniJllWll an EIR must be performed before a project is approved, for ' [i]f post approvaJ environmental review were allowed, ElR's would likely become nothing more thanposl hoc rationalizations to support action already taken. ," (Id. at 130, quoting Laurel Heights Improvement Assn. v.

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Regents of University of California (1988) 47 Cal.3d 376, 394.) Consequently, CEQA review (J) is required when a project is "well enough defined to alJow for meaningful environmental evaluation," but (2) cannot be delayed "beyond the time when it can, as a practical maner, serve its intended function of infonning and guiding decision makers." (ld.)

Given the obligations of a lead agency to not approve a project without first complying with CEQA, the holding in Save Tara applies whether the Agreement is considered a separate project or part of some later undisclosed activity_ Save Tara makes it clear that the Commission' s action constituted an "approval" under CEQA, and its failure to prepare or consider any CEQA document before it moved forward and negotiated an agreement with USC violated CEQA.

The Commission Has Failed to Publicly Disclose it Activities, in Violation of the Brown Act and the Public Records Act.

We have scoured the minutes of the Commission's previous meetings throughout 2011 and we have found no reference to any public notice or discussion of a proposal to transfer the day to day operations of the Coliseum property from the Commission and to USC or another entity. More recentl y, the Commission responded to our request for all Public Records public records "concerning communications or discussions by the Commission, Commissioner(s) or Commission staff with any individuals regarding transfer of the day-to-day management and operation (beyond the current lease agreement) of the Los Angeles Memorial Coliseum to the University of Southern California ("USC")." The request would include documents leading up to a decision to develop a proposed agreement to transfer the rights. Counsel for the Commission responded in a January 4, 2012 letter to our office that there are no such public documents in the files of the Commission.

As the result of an initiative adopted by the voters in 2004, the principle of public avai lability of decision making documents is now enshrined in the state Constitution: 'The people have the right of access to information concerning the conduct of the people's business, and therefore, ... the writings of public officials and agencies shall be open to public scrutiny.''' (Int 'l Federation of Professional and Technical Engineers, Local 21 v. Superior Court (2007) 42 Cal.4th 319, 329. citing Cal. Const., art. 1, § 3(b)(I).)

While we understand that certain records are exempt from disclosure due to ongoing real estate negotiations, the negotiations do not exempt all records from disclosure. For example, the communications from which the negotiations originated are not exempt from disclosure. The Commission.must have, at some point in time, had a communication in which it discussed the initial idea of transferring operations away from the Commission, and had some form of communication that deliberated the parties that may be involved and the rationale for the action. Such communication would not be confidential and would be a public record under the Public

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Record Act. You have indicated that there are no such records. Assuming that you have provided an accurate answer to our request, it is apparent that the Commission claims to have entertained the concept of an agreement with USC only in private discussions with usc.

Further, the Ralph M. Brown Act, California Government Code sections 54950 et seq. (the "Brown Act"), prohibits the Commission from taking an ac~ion by secret ballot. Instead, the Brown Act requires the Commission to hold a public meeting to provide an opportunity for the public to directly address the Commission on any decision to take an action. It is clear from your counsel's January 4 . 2012 letter that the Commission has heard, discussed, deliberated, or taken action on an item of interest to the public by deciding to engage in ongoing real estate negotiations with USC. Accordingly, if there are no public documents regarding the Commission's decision to enter such negotiations, and no record of a public forum or hearing to take an action to relinquish management of the Coliseum by the Commission within the minutes of the Commission's meetings, then the Commission is facing serious violations of the State 's open meetings laws which threaten to not only unravel any actions which the Commission has taken, but also inVIte inquiry of undue influence by USC and potential malfeasance commissioners in the decision to pursue such an agreement. It is precisely to avoid such concerns that the Brown Act was passed.

The failure of public involvement also violates the intent of CEQA. The California Supreme Court has repeatedly emphasized the importance of the public's role in the CEQA process ( see Laurel Heights Improvement Association v. Regents o/University 0/ California (1988) 47 Cal 3d 376). The Court has found that CEQA rests on the "belief that citizens can make important contributions to environmental protection and ... notions of democratic decision making ... "(Concerned Citizens o/Costa Mesa, Inc. v. 3:rd District Agricultural Association (1986) 42 Cal 3d 929). Seeking to approve, in closed session, without the benefit of any public review or environmental analysis of a decision to tum over management of the Coliseum to a single private entity, without any public consideration of the propriety of the decision (a "no project alternative"), or the alternatives for new management completely frustrates the intent of public involvement in the CEQA process.

Public Involvement is Not Merely Procedural-It Requires The Meaningful Consideration Of The Impacts Of The Commission's Proposed Activities_

Significant issues need to be considered before the Commission determines whether or not to seek new management of the Coliseum and the identity of that manager. Like the State Lands Commission, this Commission should consider "numerous factors in determining whether or not a proposed use of the State's land is appropriate, including, but not limited to, the potential impacts on and the consistency with the Public Trust under which the Commission holds the State's sovereign lands, protection of natural resources and other environmental values, and preservation or enhancement of the public's access to State lands. Other factors that the

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Commission will also consider are the size, location, intended use, and described need for the project/structure/facility, its relationship to the surrounding environment and if the size of the project/structurcJfacility is appropriate for the location and type of use or operation proposed." (Slate Land Commissions Leasing Approval Guidelines, Oct. 12,2011). This standard has not been met, and these issues have not been addressed in any document or in any public forum provided by this Commission.

The Commission was created as a separate legal entity pursuant to a Joint Powers Agreement between the City of Los Angeles, County of Los Angeles and the Sixth District Agricultural Association for the purposes of ensuring the long term public use of the Coliseum and Sports Arena facilities. However, the authority of that separate legal entity is specific to the management and control of the Coliseum and Sports Arena faci lities. Paragraph 12 of the Joint Powers Agreement provides:

lease, license, rent, use or permit the use of all or part of the Coliseum and Sports Arena, to any person, for competitive sports, athletics, garnes, pageants, parades, plays, celebrations, patriotic gatherings, public recreation, motion picture production, or public gatherings, or such other events as are deemed appropriate, or for City, County. or District affairs. or for viewing of any of the foregoing, and particularly to develop, and promote a wider use of the Coliseum and Sports Arena, through the presentation of festivals, pageants, games exhibits, industrial, horticultural or agricultural shows, conventions, exhibitions, and productions of a local, regional, national, or international character, primarily to the end that the citizens and public generally may enjoy and receive the greatest benefit possible from the Coliseum. and Sports Arena. and the City, and County and the District may more effectively exploit their climatic. geographical, recreational, cultural, and commercial resources and advances. (Emphasis added.)

This specific authority includes the management of the facilities-in fact this is the mandate of the Commission- appropriate management of the public resources. This is the sole purpose upon which the Commission was created under state law. However, the Commission now seeks to withdraw itself from the day-to-day management of the Coli seum, turning all control of the facility over to USC, a private entity which also happens to be the lessee of the facility. The Commission has produced to the public no controls on how the public's needs and interests would be met by such a transfer. In fact, by placing the operations of the Coliseum entirely within the hands of USC, the Commission is allowing that potential future uses will also be decided upon outside the public's eyes and ears. A pri vate university's goals and interests are significantly different from the goals and interests of the general public, and it is difficult to see how putting the Coliseum management in the hands of USC will further the public purposes of the Commission.

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Commission the authority to abrogate its own primary function. Moreover, just 2 years ago, the State legislature considered the privatization of the Coliseum in SB 29 (Denham), but that proposal died without public or legislative support. It would be contrary to the Commission's own statutes and recent public and legislative opinion to believe that the current proposal before the Commission doesn't require full public discourse and consideration in an open forum. itA party may seek a writ of mandate 'to compel the performance of an act which the law specially enjoins, as a duty resulting from an office, trust or station ... .' (Code C iv. Proc., § 1085, subd. (a); See Cedar Fair, L.P. v. City a/Santa Clara (2011) 194 Cal.App.4th 1150) Such a writ would issue here.

The Commission is mandated to step back, disclose through a CEQA Initial Study what it is attempting to gain through a change in the operations of the Coliseum, provide a scoping hearing to detennine reasonable alternatives to the transfer of operations to a private entity, and then review the impacts of those proposals in a public manner. After this is completed, the Commission should then allow all interested parties the opportunity to seek management of the Coli seum to ensure that the stakeholders receive the most beneficial offer. Only after all of these actions are taken can the Commission render a knowledgeable decision regarding its use of the public resources. Anything short of these actions would be arbitrary and capricious and fail to protect the public ' s best interests. We hope that these concerns will be provided serious consideration and resolved responsibly and cooperatively by the Commission consistent with its public purpose. However, we are prepared to take any and all necessary actions to protect the public interests if the Commission insists on continuing to disregard the State and community interests in the facility.

TJG/ct

Best regards,

PROCOPIO, CORY, HARGREA YES & SA YITCH, LLP

Theodore J. Griswold

cc: Mr. John Sandbrook, General Manager Donovan Main, Esq. U.S. Capital, LLC

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