NATIVE SON REDFORD MOURNS SANTA MONICA’S DECLINE

The Santa Monica Daily Press has exposed Robert
Redford for allegedly “bashing” Santa Monica. In
Esquire.

The Press story says, “Native son, an accomplished film-
maker and environmentalist, bashes the city where he was
born in an article featured in the April issue of Esquire
magazine. The Oscar winner told writer Scott Raab in an
interview at his Santa Monica office — Wildwood Enter-
prises — that he visits the city by the sea only when he
has to. ‘I’m never here more than two, three days at a
crack,’ Redford says in the article. ‘I get itchy —
traffic, freeways, out of control development. There was
never a land-use plan. This was a beautiful city once,
and it isn’t anymore.”

In fact, Redford wasn’t bashing his birthplace. He was
simply telling the truth. Traffic is a nightmare. Devel-
opment is out of control. If we’d ever had and actually
used an effective land use plan, our town wouldn’t be
literally stuck in traffic, and assaulted by an appar-
ently endless number of oversized buildings.

A project that’s currently being reviewed by the Plan-
ning Commission demonstrates the problems. It’s a four-
story mixed use development to be located at1318 Second
Street.

http://www01.smgov.net/planning/commission/agendas/
pc2013/s2013032008d.pdf

The four-story (45 feet) structure would have 53 units,
including 28 studios, 19 one-bedroom, six two-bedroom
units, a two-level underground parking garage, and 6717
square feet of commercial space on the ground floor.
According to the staff report, “community benefits”
have been negotiated to compensate for its violation
of the 32-foot height limit specified in the zoning code.

The so-called community benefits include, in this
instance, eight “affordable units” on site. In ad-
dition, the developer will pay $125,493 toward “trans
portation infrastructure improvements,” $125,000
toward the Colorado Esplanade construction, $250,000
toward parks and open space, and $25,000 toward
Big Blue Bus needs in the “urban core,” whatever
that is.

The developer will also provide seven short term
bike racks for the commercial space lessee and six
for tenants, as well as five charging stations,
and roof-mounted photovolatic panels, and will
meet LEED Gold standards, develop a Transportation
Demand Management plan and adopt a local hiring
policy.

In the new “packs and stacks” tradition, the pro-
posed studios will be 478 square feet, while one-
bedroom apartments will be 694 square feet, and
the two-bedrooms will measure 1104 square feet.

The “community benefit” policy has almost never
benefited our community. In too many cases, as
with St. John’s Hospital, the alleged benefit never
materialized. Nearly two decades ago, as part of
an elaborate expansion, it agreed to build an
underground parking structure, which would reduce
traffic and parking problems in the long-suffer-
ing adjacent residential neighborhood. Last year,
the City noted that the structure had never been
built, but rather than demanding that the hospital
keep its promise and build it, the City took the
hospital’s word that it had leased sufficient
parking in the Yahoo Center, which is several
blocks away, to take care of the problems. It
didn’t, of course, and now the hospital, which
recently fired its two top executives and most
of its board and is for sale, has lost its
Yahoo parking, and claims it doesn’t really need
all that parking anyway.

And then there’s the developer who built a bunch
of new apartment buildings in downtown Santa
Monica, with the proviso that he would build equi-
valent affordable housing. But he fled, leaving
the City to pick up the pieces.

And any number of developers have installed
barren courtyards in their buildings and counted
them as “open space,” or called setbacks “view
corridors,” and got away with it.

And, finally, there’re all the developers who
have made all sorts of promises in return for
breaching standard heights, and, in the breaching,
wreaked havoc with the town’s character and
scale.

Clearly, the “community benefits” program has
flopped, and should be abandoned. There are 35
major commercial projects in the pipeline, and
we should demand, first, that the projects them-
selves be “community benefits” – architectural
ly distinguished and financially viable. Every
addition to this gloriously idiosyncratic beach
town should be something we need, such as afford-
able housing, something we want, be beautifully
designed, and developers of new projects should
pay their fair share of the costs of the city
services and so-called “amenities” that they will
either use or profit from.

Santa Monica is 138 years old, very small, with
no aspirations to be anything but a great beach
town, and has long since been built out. Here and
now, there’s simply no reason for it to play
the bumpkin.

Obligations and Motivations In the Battle for Dell

BY ANDREW ROSS SORKIN

NEW YORK TIMES STORY

Leon Cooperman, the billionaire investor and longtime
Wall Street denizen, was railing on Monday about the
deal of the moment: Michael Dell’s $24 billion effort
to buy out the troubled computer maker he founded.
“Management-led buyouts are a giant case of inside
trading by management against their own shareholders,”
Mr. Cooperman told me, continuing: “Dell has a moral
responsibility to work for his shareholders.

“He’s not doing this because he thinks his company is
overvalued. He wants to make money.”

The battle over Dell, which turned into a three-way tug
of war over the weekend with the addition of competing
bids from both the Blackstone Group and Carl C. Icahn,
has put into focus the question — and perhaps the answer
— of whether management-led buyouts are good or bad for
shareholders.

Unlike Mr. Dell’s offer, in which he joined with Silver
Lake Partners to take the company out of the public
markets, Blackstone and Mr. Icahn proposed deals that
give public shareholders the option to cash out or to
continue to own a stake.

“We see no reason that the future value of Dell should
not accrue to all the existing Dell shareholders — not
just Michael Dell,” Mr. Icahn, always bracing for a
fight, said in a statement.

The thinking among some shareholders has been that Mr.
Dell must know something that public investors don’t
— and that his deal is an effort to buy the company
on the cheap and sell it back to the public for even
more money in a couple of years. As Ben Stein, the
market observer, wrote in Barron’s recently, “These
insiders know far more about the company’s value than
we little fish.”

David Einhorn, the hedge fund manager, went so far as
to suggest, perhaps cynically, that the swoon in Dell’s
stock price in the second half of 2012 may not have
been unwelcome inside the company.

“Michael Dell probably didn’t mind the stock falling,”
Mr. Einhorn said on a conference call with investors
recently. “For him, it created an opportunity. Now, he
wants to take Dell private, and voilà!”

Comments like Mr. Einhorn’s reflect a shifting ethos on
Wall Street, one that might be slightly less short-term
greedy than that of previous generations of investors
who typically would have taken the money offered as part
of leveraged buyout and run. It appears that some share-
holders of companies involved in buyouts would prefer to
ride a wave of gains alongside the buyout kings rather
than cash out immediately.

Southeastern Asset Management, one of Dell’s largest
shareholders, which has declared it would block Mr.
Dell’s original offer, said it was “pleased that the
alternative proposals submitted to the Dell Special
Committee are structured to give shareholders the
opportunity to continue to participate in the company’s
future prospects, while also providing a higher cash
component for shareholders who choose to exit their
investment.”

In fairness, it must be said that Southeastern is se-
verely underwater on its investment in Dell — it bought
its shares at an average price of $16.90 — so it has
little to lose by taking this position.

But the offers by Blackstone and Mr. Icahn (his offer
is being taken less seriously by the market) reflect
the shifting mood of long-term investors by offering
them a seat at the table and could become a trend in
the way private equity firms approach buyouts in the
future.

Mr. Dell has indicated to executives inside Dell that
he is open to working with Blackstone, people close to
him said on Monday, perhaps jumping ship from Silver
Lake if Blackstone’s bid is deemed superior.

Both of the new offers open up the possibility of all
three bidders buying a majority of the company, while
leaving a small minority of shares — called a stub in
Wall Street parlance — in the public market. In some
ways, the shift is an ironic about-face for private
equity firms, which have long evangelized on the merits
of taking companies private that are in need of a
turnaround and have spoken derisively about the press-
ures of the public markets.

Stephen Schwarzman, the co-founder of Blackstone, told
Businessweek back in 1996 that C.E.O.’s are “not able
to do some of the things they know should be done to
fix their companies. If it requires their earnings to
be depressed for two or three quarters or write-offs,
they’d rather, in many cases, not do the right thing,
because if they do the right thing, they’ll be penal-
ized by their shareholders.”

When Mr. Dell made his bid to acquire his firm in
February, with the backing of Silver Lake Partners,
he made it clear that he, too, believed that it would
be better to work on a turnaround of the company be-
hind closed doors.

“Dell has made solid progress executing this strategy
over the past four years, but we recognize that it will
still take more time, investment and patience, and I
believe our efforts will be better supported by part-
nering with Silver Lake in our shared vision,” he said
in a statement.

Now that Blackstone and Mr. Icahn have emerged with
preliminary stub offers, Mr. Dell may have to get used
to executing his strategy in the daylight as a semipublic
firm, with all the requisite disclosures that he was
trying to avoid.

As for whether Mr. Dell was trying to steal the company
from shareholders, if the battle for the company proves
anything, he may have helped shareholders rather than
hurt them. (And frankly, it may hurt him in the end,
for it is possible he may inadvertently lose control
of the company by trying to take it private.)

Forgotten in the war of words over this transaction is
the fact that Dell’s shares traded at about $8 just four
months ago. (They closed at $14.51 on Monday.)

It is a personal computer company at a time when tablets
and mobile computing are the new thing. It is hard to
argue that Dell is not in deep, deep trouble, after it
reduced its forecast for fiscal 2013 from $5.6 billion
in operating income over the summer to just $3.7 billion
in January. People close to the company say that it is
expected to reduce its forecast to $3 billion this week.

And while Blackstone’s bid is worth $14.25 a share, that’s
just 60 cents more a share than Mr. Dell’s offer of $13.65,
hardly a robbery.

To its credit, Dell’s special committee and its advisers
did a herculean job of pushing to bring in new bidders
with higher offers, especially since most observers —
including this columnist — considered the deal with Mr.
Dell to be a fait accompli. And, in truth, most “go shops”
— a provision of some merger agreements that allow com-
panies to continue shopping themselves after agreeing
to a deal — are considered simply an artifice.

For shareholders of Dell, the ultimate test of the
deal’s success or failure won’t be in the coming weeks
and months when a final victor is chosen by the com-
pany’s board. The verdict will be in the value of Dell
in five years from now and whether the current public
shareholders have profited.

But shareholders beware: Back in 2007, two private
equity firms sought to take Clear Channel, the radio
and outdoor advertising company, private. Some share-
holders balked and said they wanted to be able to
participate in the upside of the deal, fearing that
the offer price was too low and the “smart money” must
have a secret plan.

The shareholders got what they wished for: the private
equity firms revised their offer to allow shareholders
to keep their stake. And what happened to its value? It
has dropped nearly 84 percent.

ANNUAL RED TIE AFFAIR ON APRIL 6 SALUTES ARMED FORCES

The cast of CBS-TV’s top drama, NCIS and a “Red Carpet
for Heroes” will spark the eighth annual American Red
Cross Red Tie Affair on Saturday, April 6.

Hosted by Fox 11 News anchor/reporter Christine Devine.
this year’s fundraiser will feature A Salute to the
Armed Forces, honoring men and women from all branches
of service, together with the NCIS cast and executive
producers, beginning with red carpet arrivals at 5 pm
at the Fairmont Miramar Hotel.

The Crystal Cross Award for outstanding support of the
American Red Cross will be presented to the cast and
executive producers of the one-hour drama NCIS. Now in
its tenth season, the series focuses on the members of
the Naval Criminal Investigative Service. From murder
to espionage to terrorism and stolen subs, these special
agents investigate all crimes with Navy and Marine Corps
ties. NCIS airs Fridays at 8pm.

The Rick Crocker Spirit of Volunteerism Award, which is
named for the Santa Monica police officer, Red Cross
volunteer and Iraqi war veteran who died in 2005, will
be presented to Dr. Richard Corlin, of St. John’s Health
Center.

The annual Red Tie affair is the largest fundraising
event of the year for the American Red Cross in Santa
Monica. The funds support services that are delivered
every day in the community. Next week’s celebration
spotlights the historical relationship between the Red
Cross and the men and women of the military and the
sacrifices they and their families have made. Local
military, government, corporate and community leaders
will take part in the celebration that supports the
work of organization here and the Los Angeles region.

Wearing something red is encouraged to signify support
of the American Red Cross mission.

The evening’s festivities evening will include cock-
tails, gourmet dining from celebrity chef Nick Stellino,
silent and live auctions, and special entertainment.

For further information about sponsorships, event
questions, contact Julie Thomas, CEO, Santa Monica
Chapter, Thomas@redcross.org

RACIAL JUSTICE SUBCOMMITTEES TO MEET SUNDAY

The Committee for Racial Justice will not have a speaker
at its April meeting, but will gather at the Church in
Ocean Park as usual on the First Sunday of the Month,
April 7, at 6 pm, for Potluck Dinner, which will be
followed by subcommittee meetings. They include:

1) School District Issues

2) Outreach (including educating the dominant culture
about systemic racism and motivating them to action,
back/brown tensions, PR and more)
3) Mass Incarceration (Gauriel Sherman – student at
the SMC Public Policy Institute – is now working with
us on this issue!)

Please let us know which sub-committee you are inter-
ested in, as, in addition to their monthly meetings,
they are active during month, and we will contact you
about those meetings and actions.

Hope to see you on April 7th at 6 pm at the Church in
Ocean Park!

Janet Gollery McKeithen

NEWS FROM THE CANYON: COYOTES & BIKE PATH CLOSURE

By George Wolfberg, President Emeritus SMCCA

It is Spring and the local coyotes are active. They
no longer are the nocturnal animals of old and can be
seen throughout the day. Small dogs and cats are a
favorite meal, along with rodents and other small
animals.

If you are in the pet-owner demographic, take precau-
tions to protect your animals. Do not leave food out
for any animals — except bird feeders, which should
not be a problem. There are many common sense
articles on the internet about ways and means of
coyotes and their wiles.

AND THE COUNTY OF LOS ANGELES will be closing a seg-
ment of the Marvin Braude Bike Path for reconstruction
work until April 12th. The limits of the beach bike
path closure are from Imperial Highway in the City
of Los Angeles to 45th Street in the City of Manhattan
Beach.

To accommodate bike path users during this closure, a
detour has been provided along Vista del Mar. The
most seaward of the 4 vehicle travel lanes (closest
to the beach) will be barricaded and dedicated as a
bike lane for both directions of bike path traffic for
the duration of the work.

For information contact us at (626) 458-3110, (626)
458-4967 or visit
http://dpw.lacounty.gov/bikepathclosures

visit SMCCA web site