By Erin Sherbert
By Howard Cole
By Erin Sherbert
By Erin Sherbert
By Leif Haven
By Erin Sherbert
By Chris Roberts
By Kate Conger
THERE IS A TREELESS BEDROOM community straddling the southern edge of the city of Sacramento that is a quiet testament to the will of land developers. That several thousand homes exist in North Laguna Creek today is a minor miracle. Fifteen years ago, the residents of this area were mostly cows, birds, fairy shrimp, and snakes. These 600 acres of grazing meadow, studded with vernal pools and eucalyptus trees and bisected by a bubbling brook known as Laguna Creek, were beautiful -- and a residential developer's nightmare.
The federal government said this area adjacent to Laguna Creek was deep in the flood plain -- meaning that houses could not profitably be built and sold there. Also, a variety of federal, state, and local agencies said that the savannas included large tracts of crucial wetlands -- wetlands that must be left in their natural state. And even if the flooding and environmental problems could be addressed, the area could not be developed without tens of millions of dollars of major transportation infrastructure -- freeway exits, arterial streets, bridges, and other improvements -- and none of that spending had been approved by the government.
But the property was cheap, and developers yearned to overcome the impediments to construction. In fact, by the summer of 1986, the owners of these 600 bucolic acres had persuaded local government to help address the most daunting of the obstacles to development: the Federal Emergency Management Agency's warning that the land lay in a flood hazard zone. But then the proposed flood control project stalled, and the stall seemed likely to be permanent. The U.S. Environmental Protection Agency said, officially and forcefully, that the land should not be developed for a raft of environmental reasons. Two other government agencies also lined up against the project.
At that point, the chances that development would be approved seemed to range all the way from slim to vanishing.
Then, in the fall of 1987, a certain development partnership arrived on the scene and optioned -- that is, paid money to gain the right to buy -- the creekside area of the stagnant project's land. The cost was minimal; after all, at that point it did not seem that the property would ever be developed, at least not with a housing density that would result in large profits.
And then, within weeks, all the major impediments to development fell like a straw hut before a typhoon.
At the urging of a powerful U.S. congressman, the Environmental Protection Agency leapt away from its previously adamant anti-development position as if it were a burning coal. The other agencies retreated, too.
The city of Sacramento dredged Laguna Creek, which allowed FEMA to remove much of the adjacent land from the flood plain, and suddenly, the property was no longer in imminent danger of flooding -- at least on paper. The city agreed to provide the development partnership with roads, sewers, water mains, and nice parks -- free of charge. In fact, over the next few years, agencies at all levels of federal, state, and local government rushed to satisfy the requests of this certain development partnership and others who wished to develop the area. Millions of public dollars poured in, benefiting not just the immediate area, but other new neighborhoods that began to emerge from the thousands of acres that fan out from North Laguna Creek. Greater Laguna Creek was born, and wetlands that had been home to endangered wildlife became part of Sacramento's suburban boom.
As Laguna Creek began to blossom, the development partnership in question exercised its option, bought 285 acres of raw land, and sold it off as subdivided property, ready for construction, reaping a multimillion-dollar profit. But these sales were only a hint of the massive development to come. The flood control project, freeway interchanges, roads, and pro-development environmental decisions that ratcheted up the value of the property optioned by a certain development partnership also primed much larger segments of nearby land for residential and commercial building. This certain development partnership, it seemed, had laid the groundwork for turning thousands of acres of inexpensive rural land into pricey suburbs.
Those thousands of acres were controlled by Democratic Party heavyweight Angelo Tsakopoulos, then-employer of state Democratic Chairman Phil Angelides, future overnight guest of President Clinton, campaign contributor extraordinaire, the controversial and all but undisputed King of the Sacramento Sprawl.
And the certain development partnership that had the foresight to option 285 acres of land in south Sacramento -- Live Oak Associates II -- also had a well-known Democrat among its owners. His name was Willie Lewis Brown Jr.
Mayor Willie Brown has never been shy about flaunting his financial success. While Assembly speaker, Brown "moonlighted" as a lawyer, and his private law practice was large, lucrative, and controversial. He was repeatedly criticized for accepting large legal retainers from clients with significant interests in state legislation. But Brown adamantly insisted his private law practice was ethical, and all but taunted critics with the Porsche automobiles he drove and the Wilkes Bashford suits he wore.
Brown's financial well-being has generally been presented as a function of his lawyerly activities. Indeed, he has represented many large and powerful business clients, and has made handsome sums for doing so. (A July 1995 story in the San Francisco Examiner, co-written by what now seems to be the almost comical duo of ace investigative reporter Lance Williams and former reporter/current Brown mouthpiece Kandace Bender, says that in a four-year period in the early 1990s, Brown earned $1.15 million moonlighting as a private lawyer while serving as the speaker of the Assembly.) But Brown has made money in other ways, too.
And one of those ways involves the little-noticed real estate partnerships that go by the name Live Oak.
There are three different Live Oak partnerships -- Live Oak Associates, Live Oak Associates II, and Live Oak Associates III -- and they have become players in Sacramento's exurban real estate game. Financial disclosures on file with the state and city governments show that Willie Brown has interests in all three. The partnerships are headed by two attorneys, William A. Falik and Jonathan A. Cohen, who also have organized other firms in which Brown has invested. Brown is a limited partner in the Live Oak groups, meaning that he is an investor, not an active manager of the ventures. His most recent public disclosure values his interest in each of the three partnerships at somewhere between $10,000 and $100,000, but it is unclear whether those values represent initial investment, or that investment plus appreciation and reinvestment of profits over the years.
Live Oak seems to be something of a specialist in the real estate game. It apparently makes most of its profits on the front end of the residential development process: buying raw land; "entitling" it with residential zoning and water, sewage, and building permits; and, then, selling it -- for many times what was paid -- to other developers, who build and sell homes. This is not a particularly new or unusual method of making money in the real estate game; in some sense, all real estate developers market their ability to obtain the government entitlements necessary to build.
But North Laguna Creek was not your usual type of development challenge. During winter storms, mile-wide sheets of water often spilled from the creek, feeding vast networks of wetlands. While soggy ground is good for grass, it is very bad for supporting houses. That's why -- since the early 1960s -- city planners had favored keeping Laguna Creek as a "natural" flood plain; that is, a drainage system that would protect 50 square miles of watershed by soaking up and containing flood waters. There was plenty of developable area outside the flood plain, the planners reasoned, as they tried to steer urban growth toward dry land. The idea was to leave Laguna Creek alone -- as nature's safety valve. Besides, the planners noted, destroying wetlands was a violation of federal law.
But developer-speculators are inevitably drawn to wasteland, confident in their ability to buy property cheaply, win their way with government, and then sell what once was considered waste for top dollar. The key to building suburban tracts on the cheaply bought fields of North Laguna was to tame the creek, and, then, get the city to approve at least a few hundred acres for residential building. To do this, it was necessary to undo the sanctity of the wetlands -- to get approval of a first subdivision so it could be built, and so many more could follow.
Before Live Oak Associates II arrived on the North Laguna Creek scene, much of the creekside grazing land there was controlled by Sacramento attorney Kenneth S. Tune and his partners, and they had run into an entitlement wall. In 1985, the Sacramento City Council had agreed to widen and deepen the flood-prone stream. As part of the plan, a million cubic yards of dirt excavated from the creek would
be spread over 600 nearby acres. Deepening the creek's channel was the key to having FEMA remove the area from the flood hazard zone, which was the key to dense residential development. The future looked dry -- and lucrative.
But the wetlands issue sprang up, and refused to be pushed down. The Army Corps of Engineers questioned whether the city could spread dirt taken from the creek bed onto nearby wetlands. The Corps' concern was flooding; wetlands act as natural sponges, and filling or paving them could increase the flooding this project was meant to alleviate.
Late in 1986, the U.S. Environmental Protection Agency placed a huge impediment in the way of all development in the Laguna Creek area. In a series of letters to the Army Corps, the EPA said that dredging one small section of Laguna Creek's 25 miles might have a "domino" effect, allowing development that would decimate the region's ecology. The EPA was particularly concerned about 70 acres of vernal pools that would be obliterated by the flood control project. A vernal pool is a seasonal wetland, a strange and beautiful aquatic universe that springs to life as shallow rainwaters pool in hardpan depressions. Endangered flora and fauna, including the almost invisible fairy shrimp, thrive only in the vernal pools of Northern California, which often are surrounded by exotic flowers blooming in mystic rings. The city was promising to replace the vernal pools with man-made structures, but the EPA did not believe vernal pools could be built.
Public records make it clear that the EPA felt the city of Sacramento, in pushing the channelization of Laguna Creek, was fronting for developers, in anticipation of much larger development projects than the one then under consideration. "It is clear that the flood control is being sized and configured to account for large planned developments upstream," EPA official Tom Yocum wrote in a September 1987 internal memo. The EPA's opposition seemed absolute, and its environmental concerns were backed by the United States Fish and Wildlife Service and the California Department of Fish and Game, both of which objected to destroying the habitats of the giant garter snake and an array of vernal pool crustaceans.
The environmental objection that seemed most difficult to overcome involved wetlands. The EPA contended that the vernal pools were a type of wetlands that could not be "replaced" with artificial pools. And, the EPA said, federal law simply, absolutely prohibited the destruction of these wetlands to create housing. The city and the Corps of Engineers felt otherwise, and there was a period of bureaucratic jousting about when wetlands could and could not be "taken" for development.
And then, before dueling bureaucrats could further muddle the matter, two relatively subterranean events occurred.
On Aug. 31, 1987, then-U.S. Rep. Vic Fazio, a Sacramento Democrat, telephoned Judith Ayres, then-regional EPA administrator. Fazio told Ayres he was "in favor" of the floodway project. He said he was "interested" in the EPA "reaching a resolution" of the matter, according to notes of the conversation kept by the EPA. He probably did not need to remind Ayres that, as a member of both the House Appropriations Committee and the Interior Committee, he held tremendous sway over the EPA's budget.
Vic Fazio -- one of the most powerful politicians in California -- was a state assemblyman before he won his congressional seat in 1978. For nearly two decades, Fazio and Assembly Speaker Willie Brown were among California's leading Democratic Party strategists and fund-raisers. Together, they fought many bloody redistricting wars against Republicans; and Fazio even gave up much of his safe district in 1981 to save the almost-ruined career of Willie Brown's closest ally, John Burton. Fazio, now a lobbyist with Clark & Weinstock of Washington, D.C., did not return repeated phone calls. But Stan Hazelroth, a former aide to Fazio who was also a consultant for the North Laguna Creek developers, remembers that he -- and agents of Live Oak Associates II -- repeatedly asked Fazio's office to weigh in with the EPA to allow the flood control project on North Laguna Creek. Hazelroth says that he also lobbied people in the state Assembly to get the state agencies to drop their opposition to the project.
One month after Fazio's call to the EPA, Kenneth Tune's WPT Group, which had struggled unsuccessfully for years to entitle its land, arranged to sell the prime portions of its North Laguna Creek property to Live Oak Associates II for $3.7 million.
And within days of the sale, the EPA, which had been so adamantly against any development of the area, capitulated completely. And after the federal environmental agency agreed to the Laguna Creek flood control project, the California Department of Fish and Game and the United States Fish and Wildlife Service froze their opposition to it. Bulldozers hit the creek bed, and FEMA removed Laguna Creek from the flood plain.
Almost like magic, Live Oak Associates II became the master developer of a hot new development property: North Laguna Creek.
Starting in 1988, the Sacramento City Council spent $16 million to construct the floodway for North Laguna Creek. But Sacramento did much more than dredge the creek, and take most of Live Oak II's land out of the flood plain. The city's Department of Public Works also built three major roads inside the development, connecting it to the world at large. It was against city policy to do this, but exceptions were made.
The city built miles of storm drains and sewers; it paid for water mains to deliver city water; it put in street lighting; it built artificial vernal pools; and, last but not least, it created a tapestry of attractive parks as an amenity for the new development. Even the county of Sacramento jumped into the pot, contributing $1.4 million toward the floodway, and donating swamp to "replace" wetlands lost to Live Oak.
It was an extremely unusual arrangement. Where most developers pay a large proportion -- or all -- of their pre-development "hard" costs, Live Oak II seems to have paid almost none. Essentially, the government capitalized Live Oak's venture.
Once the major flood control and environmental disputes were put to rest, over the next nine years, the city of Sacramento bent over backward to change its own laws in favor of Live Oak's needs. Against the recommendations of city planners and the Planning Commission itself, Mayor Anne Rudin and the Sacramento City Council allowed Live Oak to build single-family homes in an area that had been slated for apartments; granted Live Oak numerous building waivers that, according to the city itself, "reflected a substantial departure from the city's normal procedures"; and allowed Live Oak to escape posting millions of dollars in performance bonds, which are cash guarantees that a developer will do what it says it will.
In two of the more unusual transactions, the city bought separate parcels of unbuildable property from Live Oak.
The city's agreements with federal agencies required that 33 acres of the North Laguna Creek development be set aside as a vernal pool preserve. The parcel that Live Oak chose for preservation happened to be directly under several PG&E electrical transmission towers. Amazingly, the city volunteered to buy the parcel from Live Oak -- agreeing to pay for land the developer would otherwise have had to donate as open space.
And did the city ever pay.
In April 1988, a city-hired appraiser valued the parcel at $31,000. A few days after submitting this "final" appraisal to the city, the appraiser mysteriously changed the figure to $81,827. Even that price was too low for city officials. In the end, the city gave Live Oak II $155,000 for the property -- five times the original appraisal.
In the second instance of buying what might have been had for free, the city used state money to purchase a dozen acres of parkland from Live Oak II for $1.2 million; the city then created a park on the land. The park is one of the central amenities and value-adders for North Laguna Creek. Again, the process seems backward. Ordinarily, a developer would donate land he hoped the city would agree to make into a park. In this case, the city bought the land and built the park.
At the request of Live Oak Associates II, the city also annexed 400 acres of nearby farmland in which Live Oak had substantial holdings. That acreage needed water, and annexation would allow access to the city's distribution system.
And if all these favors were not enough, the Sacramento City Council allowed Live Oak to renege on a promise to set aside land for a school.
Originally, the subdivision plats for North Laguna Creek set aside 10 acres for a school. But then in September 1988, the City Council allowed Live Oak II to remap its subdivisions. In the ensuing remap, the developers took back the proposed school site so it could be sold for housing.
Local governments often favor developers who make campaign contributions. Political connections always play a role in gaining government assistance. But the North Laguna Creek development raises the question of degree of assistance. The government paid about $6 million up front for Live Oak's infrastructure. The rest was funded with tax-free bonds. Normally, before this type of debt can be used, private developers must, at the very least, pay for roads, sewers, and water mains. For some reason, Live Oak got an almost wholly free ride.
"Live Oak II's contribution in this deal looks to have been political, not financial," says Clint Reilly, a veteran of Sacramento politics who is running against Brown for mayor. "Where others would just walk away from a real estate deal dependent on government entitlements, Willie Brown plunges into a thicket of conflict without seeming to care about consequences."
After the federal government gave its environmental blessing, and the city of Sacramento showered North Laguna Creek with local entitlements and development freebies, a variety of governments stepped in to provide the new community with transportation. And Willie Brown was directly involved in providing some of that transit aid.
As speaker of the Assembly, Brown wielded tremendous power over California's transit systems. He made appointments to the governing board of the California Transportation Commission. He held the power of the purse over Caltrans. And in 1989, Brown sponsored a bill that provided millions of dollars in road improvements to state highways serving the ongoing development of Laguna Creek. But, more important, Brown's bill finally resolved a local transportation war.
For years, local politicians had been wrangling over the route to be taken by the southern extension of the Sacramento Regional Transit District's commuter light rail system. Starting in downtown Sacramento, the South Line had a half-dozen possible paths into the exurbs. Speaker Brown's 1989 transportation bill settled the matter by choosing one particular route -- which just happened to be the route that best served North Laguna Creek. The Calvine Road extension of the South Line will cost $222 million and is scheduled for completion in 2003. The fact that it will directly serve Live Oak's North Laguna Creek holdings adds tremendous value to the property.
In all, city and the county governments blessed the North Laguna Creek developers with more than $45 million in road improvements. A new connector -- called Consumnes River Boulevard -- was built for $12 million. Bruceville Road, an arterial leading directly into North Laguna Creek, was widened for $3 million. Millions more have been spent on bridge reconstructions, carpool lanes, bus stops, and slip ramps. State-funded Caltrans is poised to build a $20 million interchange at Sheldon Road and Highway 99, which will greatly ease access into North Laguna Creek.
This cornucopia of transportation improvements did not appear in Laguna Creek by accident. They were deliberately put there by government officials to enable the spread of urban sprawl. They happened to also serve the interests of Willie Brown's Live Oak Associates II.
Only fools -- or canny speculators -- buy fields that lie in a flood plain. Angelo Tsakopoulos is no fool. Tsakopoulos, age 62, immigrated to Sacramento from Greece in the early 1950s. Working as a waiter, he befriended rich customers who passed on real estate tips. By the end of the 1960s, Tsakopoulos had turned relatively minor investments in raw grassland into a fortune, as Sacramento burst its seams and extruded suburbs into areas owned by Tsakopoulos.
Tsakopoulos' relatively quick rise to huge wealth was explained in 1996 by his business partner and daughter, Eleni Tsakopoulos. "Ultimately, what we do is take land that is missing entitlements (e.g. zoning, services, improvements), and we bring it to a later stage," she told the Sacramento Bee. "So a builder can come in and build on it. ... Before that happens, you have a very complex mechanism in place."
Obtaining entitlements for land that has been considered undevelopable involves many activities. For Angelo Tsakopoulos, one of those activities appears to be the making of large campaign contributions. Tsakopoulos isn't just a developer who contributes to political candidates; he is one of the most influential donors in the entire Democratic Party. Over the years, the Tsakopoulos family has donated many millions to local, state, and federal candidates, mostly Democrats. Vic Fazio, for instance, could always count on the maximum contribution from Tsakopoulos. And in the last presidential election, Tsakopoulos donated $185,000 to the Democratic National Committee. In gratitude for Tsakopoulos' gifts, Bill Clinton let the real estate magnate sleep in Lincoln's bedroom. In deference to his importance, Clinton once visited Tsakopoulos' home for a fund-raiser.
For decades, Tsakopoulos' soft money has flooded the campaign war chests of California's Democratic Party. For instance, in 1991 Tsakopoulos donated $50,000 to the Willie Brown Initiative Committee, a group formed to secure Democratic Party control of legislative and congressional districts. And he has particular favorites in the government. For example, Tsakopoulos took now-state Treasurer Phil Angelides under his wing in 1983, making him chief executive officer of his real estate firm, AKT Development Corp. Until he took office this year, Angelides regularly received consulting fees from Tsakopoulos. He still participates in the older man's extensive real estate partnerships, including the Kramer Ranch, a property adjacent to Live Oak's North Laguna Creek.
Between 1988 and 1991, as entitlements were being finalized and North Laguna Creek was being built out, Angelides contributed over $30,000 to Willie Brown's various campaign committees. Tsakopoulos gave Angelides almost $1 million for his two runs for state treasurer in 1994 and 1998.
According to California's Fair Political Practices Commission, Tsakopoulos' largess has even leaked into the private pockets of government officials. In the late 1980s, Sacramento County Supervisor William Bryan went to prison after he failed to disclose $250,000 in loans from Angelo Tsakopoulos. The FPPC alleged that the loans were made to Bryan in return for his votes to favorably rezone Tsakopoulos' and Angelides' holdings slightly west of North Laguna Creek. Tsakopoulos was not charged in the matter.
Tsakopoulos has suggested in the past that his campaign contributions are unconnected to government decisions that would benefit his business activities. Clearly, though, there is a perception that Tsakopoulos' spreading of his wealth has given him enormous power.
B. Demarr Hooper is the attorney for Sheldon Farms, a development next to Tsakopoulos' Kramer Ranch, a several-hundred-acre development that Laguna Creek flows through. Hooper says that Tsakopoulos was the driving force behind taking Laguna Creek out of the flood plain, which would set a precedent so Tsakopoulos could develop his own properties, which, in addition to Kramer Ranch, include vast tracts in what is known as the Laguna Creek area. Although he declined to be more specific, Hooper says that political pressure has been exerted on the development of Laguna Creek, and Fazio provided part of that pressure at a "higher level." And Hooper is "aware of situations" in which Tsakopoulos used political pressure to "minimize red tape."
In an interview, Tsakopoulos said he did not lobby for the floodway, and said he did not know that the EPA was opposed to filling in the wetlands.
Vicki Lee, leader of the Sacramento Sierra Club, claims that Tsakopoulos is the mastermind behind much of the sprawl encircling the Sacramento metropolitan area. "He is able," Lee says, "to stand up at a meeting of the Sacramento County Board of Supervisors and redraw the urban services boundaries on the chalkboard. And the supervisors nod, and vote for whatever he says. He can throw a mound of dirt around a subdivision, and have it removed from the flood plain."
As the acknowledged leader of a dozen Laguna Creek-based developers, Tsakopoulos has looked out for the big picture. He and Angelides own -- or have sold -- thousands of acres between Routes 5 and 99, in Greater Laguna Creek. After the EPA surrendered to the needs of Live Oak II at the headwaters of Laguna Creek, Tsakopoulos got a green light to develop residential neighborhoods and shopping complexes throughout the area. Additional flood control projects have turned the creek itself into a sluice; hundreds of acres of land have been brought out of the flood plain; and brightly colored malls are springing up where the vernal pools used to be.
The transportation improvements that serve Live Oak's North Laguna Creek also serve Tsakopoulos' much more extensive holdings. Most stunning to see is the new road system that has been built to serve Tsakopoulos' and Angelides' Laguna West: thousands of "pedestrian-oriented" homes that turned out, ironically, to be highly auto-dependent.
But, 15 years ago, none of this existed. It was not until the regulatory logjam was broken in late 1987 that Tsakopoulos' Kramer Ranch and other Laguna Creek properties could be brought into play. And it was Live Oak Associates II that broke the jam, getting a floodway built, the flood plain map changed to allow residential development, and a bevy of unusual givebacks and giveaways granted. Live Oak made millions.
And, after stopping at North Laguna Creek, Sacramento's new light rail trains will speed on to service the commuter villages rising up from the flood plains of the Tsakopoulosian Sprawl.
Angela Torrens, a realtor who chairs the Franklin-Laguna Community Council, says that Angelo Tsakopoulos was the driving force behind the Laguna Creek floodway, which allowed him to subdivide and build on thousands of acres upstream. Torrens says all of Live Oak II's environmentally friendly promises have failed to bear fruit. Literally. "Not even the planting was done up right," she says. (In 1995, the Army Corps of Engineers fined Sacramento $170,000 for dropping the ball on 65 acres of vernal pool replacements. Also in 1995, new homes in North Laguna Creek flooded.)
Torrens talks about Tsakopoulos recently partnering with the giant Lennar Corp. to develop sub-, ex-, and post-burbia in an ever-widening, hundred-mile circle around Sacramento. Lennar, she says, just bought a piece of North Laguna Creek. None of this would have been possible had not someone fully developed the floodway.
Is it just a coincidence that the someone happened to be a partnership partly owned by former Assembly Speaker Willie Lewis Brown Jr.?
When Live Oak Associates II bought into North Laguna Creek, public records show it agreed to pay $3.7 million for 285 acres. As the Sacramento City Council tacked approvals onto Live Oak's subdivisions, general partners William Falik and Jonathan Cohen sold them off piecemeal to homebuilders. Over a nine-year period, public records show, Live Oak sold its stake for $13 million, leaving a gross profit of about $9 million. Cohen says the net profit was "around $2 or $3 million." But he was not specific about how the remaining $6 million to $7 million in gross profit was used, and some of his general claims about the amount of profit the project earned do not appear to be supported by the public record.
The inner structure of Live Oak Associates II is not a matter of confirmed public record. The documents available to SF Weekly suggest that Willie Brown owns somewhere between half of 1 percent and 4 percent of Live Oak II. If the North Laguna Creek project's gross profit was $9 million, this translates into a return for Brown of between $45,000 and $360,000. If it was as low as $3 million, Brown made between $15,000 and $120,000.
To be sure, the public record contains no evidence that Willie Brown used his official position as speaker of the Assembly to further only his own financial interests in North Laguna Creek. Although Brown's highway and light rail bill greatly enhanced the value of Live Oak's properties, it also affected the holdings of other developers.
It is very clear that Angelo Tsakopoulos was the organizing force behind taking Laguna Creek out of the flood plain, so that he could build out his megadevelopments. In Sacramento, public officials have kowtowed to Tsakopoulos for 20 years. As congressman, Vic Fazio would probably see nothing wrong with jamming the EPA at the request of a powerful constituent. Willie Brown would probably see nothing wrong with voting for -- and sponsoring -- bills that incidentally served his financial well-being. Nor would Brown or Fazio see anything wrong with taking tens of thousands of dollars from a developer whose net worth floats up and down in relation to governmental actions taken by Brown and Fazio.
Reviewing the record: Tsakopoulos needed Laguna Creek taken out of the flood plain. The EPA was making this impossible. Fazio called the EPA in support of the floodway project. Shortly thereafter, Live Oak Associates II optioned potentially prime acreage surrounding the creek. The EPA surrendered. Live Oak bought the land. North Laguna Creek was removed from the flood plain. The city of Sacramento not only built the floodway, it also put in vital infrastructure practically free of charge to Live Oak. The city needlessly paid Live Oak an inflated $1.35 million for open space. The city changed its zoning laws to accommodate Live Oak's effortless entitlement process. Willie Brown sponsored a bill that put a quarter-billion-dollar light rail project at the doorstep of North Laguna Creek. Live Oak sold the land for about $9 million more than it owed on it. After lobbying from Live Oak Associates II, the city expeditiously annexed 400 nearby acres in which Live Oak and Tsakopoulos' partners held substantial ownership, vastly multiplying the value of this land. Tsakopoulos obtained all the government permits he needed to develop the rest of Laguna Creek.
Whether or not Willie Lewis Brown Jr. actively participated in the North Laguna Creek development deal, he certainly profited by it. And without a remarkable series of government assists and giveaways at all levels and stages, there would have been no development, and no profit.
Brown did not return phone calls asking for explanations of the unusual events that led to the creation of North Laguna Creek. Tsakopoulos said he did not know that Willie Brown was an investor in Live Oak II. And so one is left to wonder.
Was it just a piece of pure luck that Live Oak II was cut into the middle of a deal at the very moment that deal was being thwarted by federal and state agencies? A deal that almost immediately went from certain-no to absolute-go? A deal in which Live Oak II made millions of dollars, and a confluence of business and political interests ended up serving Angelo Tsakopoulos, the quasi-godfather to California's Democratic Party elite?
Or was it just one of the ways that Willie Brown has made his money over the last three decades?