Looting Hawaiian Gardens
Editorial -- Hawaiian Gardens report: Damning, incomplete and biased
by Long Beach Press-Telegram
Originally published 13 July 2000
in Long Beach Press-Telegram

In the most high-profile attack to date on Dr. Irving Moskowitz's controversial Hawaiian Gardens casino, the chair of the state's Joint Legislative Audit Committee has demanded a return of millions in public subsidies.

Assemblyman Scott Wildman's staff has recommended that Attorney General Bill Lockyer assist the Hawaiian Gardens Redevelopment Agency in recovering the funds, and that local, state and federal law enforcement agencies investigate whether criminal or corrupt activity took place.

Ever since the early 1980s, debate had raged over whether the city should build a card club or a commercial development.

A 1988 Moskowitz plan called for a mixed-use commercial project. A Smith's mega-grocery emerged as a key candidate in the early 1990s.

But after the city had sunk millions into the investment, Moskowitz switched gears in 1995. Days after the redevelopment agency had approved a vague agreement for a large commercial development, city leaders suddenly discovered there was an initiative drive to legalize card clubs.

Moskowitz's attorney, Beryl Weiner, says that the switch came at the request of two city officials, but both have denied that claim in sworn statements.

Moskowitz sunk more than a half-million dollars into passing the measure. What followed was a travail of lawsuits from existing property owners, and an increasingly entangled relationship between Moskowitz and the city.

Perhaps the most damning JLAC staff finding is that the spending of redevelopment funds on the casino violated a 1996 state law.

Weiner argues that voters approved the gambling site and that the city granted a license well before a January 1997 legislative deadline. Weiner also points to a settlement reached with card club opponents which specifically said that Moskowitz had not violated state law.

But no less an authority than the Legislative Counsel disagrees.

In hindsight, the City Council-Redevelopment Agency may have made some missteps. Having Moskowitz's attorney also do legal work for the city was an unorthodox arrangement.

Moskowitz didn't create the city's financial problems, but he surely capitalized on them. He is hardly the first developer to drag his feet and demand concessions.

Unfortunately, among the key omissions in the report is that since opening up at the end of 1999, the casino is earning license fee revenues at a rate of more than $3.5 million a year.

It won't take long for the city to make back its investment of $9.5 million to $12 million. That's a better payoff than many redevelopment efforts.

Particularly distressing is that a silly dispute over an interview audiotape resulted in the report biased against gambling being written without significant input from Moskowitz's attorney.

There apparently will be follow-up reports that presumably will be as balanced as possible.

Authorities should proceed carefully before adopting such bold recommendations as demanding a refund of all subsidies.

But financial support from this point forward is another matter. If the good doctor has a future dispute with the city, it might help leaders to know that a few state officials were in their corner.

Copyright 2000, Long Beach Press-Telegram. For education and discussion only. Not for commercial use.

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