June 16, 2013

Dixon citizens cite political pressures to push studio deal through

While Dixon city officials say no one has been harmed by Carissa Carpenter's sinking studio proposal, some property owners say they felt pressured by Carpenter's company and key city officials to sell their land or face potential economic consequences.

She rolled into town vowing to forge a real estate footprint of farm properties that would one day become a glittering movie-studio complex.

Today, Carissa Carpenter's footprint in Dixon extends far beyond the boundaries of her proposed $2.8 billion project.

While Dixon city officials say no one has been harmed by Carpenter's sinking studio proposal, some property owners say they felt pressured by Carpenter's company and key city officials to sell their land or face potential economic consequences.

Other locals say the self-described entertainment executive from Los Angeles injected herself into a city election and unduly influenced its outcome.

Many proud Dixon residents say the whole affair has been, well, downright embarrassing.

"She comes into town and she's going to tell the citizens who live here – some of them for generations – what she's going to do and how she's going to do it. And we didn't have a say," said Ourania Riddle, a longtime Dixon resident whose proposed ordinance to expand government transparency was defeated last year amid public pronouncements by Carpenter that she would pull her studio project if the measure passed.

"I'm upset with the citizens of Dixon who did not see what she was about."

In recent weeks, uncertainty over the future of the massive project has grown, amid signs it is going the way of others she has pitched over the past 16 years. The funding has not materialized. A key backer, Hollywood producer Howard Kazanjian, has pulled out. Letters of intent that some landowners signed to sell their property have expired.

And emails obtained by The Bee show the city and some of Carpenter's own associates have grown worried about her ability to deliver.

Carpenter's impact on Dixon, population 18,449, has been debated among local residents since The Bee published an investigation June 2 revealing her 20-year history of financial troubles, including bounced checks, breached contracts, tax liens and unfulfilled promissory notes. She has been the focus of two criminal cases accusing her of fraud, one involving her sickly grandmother.

The Dixon project marks the seventh time since 1997 she has attempted to raise millions from private investors to build a lavish movie studio outside Hollywood, this time under a limited liability company called Morning View.

Carpenter's previous six efforts failed – some under different company names – with several investors telling The Bee they lost hundreds of thousands of dollars to efforts that ran a similar pattern: lots of initial hype, promises of a big money stream from unnamed investors – then missed deadlines, excuses and, eventually, the project disappears.

Carpenter recently apologized for the multiple delays in Dixon. She has yet to make a $100,000 deposit to the city for staff time to be devoted to the project, a requirement set in January.

In previous interviews with The Bee, Carpenter blamed her history of financial and legal difficulties on a panoply of medical problems, as well as repeated episodes of identity theft.

In a brief phone conversation Friday, Carpenter said "we are moving forward" with the Dixon project and referred questions to Robert W. Naylor, her Sacramento attorney. Naylor did not respond Friday to requests for comment.

City Manager Jim Lindley has not returned repeated phone calls from The Bee since before the investigation was published. He told Dixon media in early June that he still considers the project "viable."

However, city emails obtained by The Bee through a California Public Records Act request, as well as emails Carpenter has exchanged with her project team that were provided to The Bee, show that Lindley and other team members have been concerned for weeks the project was dying.

"I'm seriously concerned that the window of opportunity to build your project in Dixon is closing," Lindley wrote in a May 21 email to Carpenter that the city released to The Bee last week. "If your funding does not happen quickly, I think we will be overtaken by events which we have no ability to control.

"My fear is that any further delays will doom your studio project."

Carpenter's real estate broker expressed similar concerns in a May 29 email the city released, telling Carpenter that: "We need to write the city their check for $100,000 NOW."

Broker Dawn Rickabaugh also told Carpenter that she needed to produce proof that she had access to the $36.6 million in land acquisition funding and that "the lender needs to come forward and show everyone in writing that they are guaranteeing the financing for the project."

The day The Bee's investigation was published, Lindley stepped up the pressure, according to emails provided to the newspaper.

"The best thing that can happen tomorrow is to BUY THE LAND AND GET THE PARTY STARTED," Lindley wrote to Carpenter on June 2 from a personal Gmail account. "Given that, the good press will take care of itself with no help from us."

The next day, Lindley appeared to give Carpenter an ultimatum, telling her the city needed the $100,000 deposit "funded by Wednesday, Friday latest," according to an email sent from his personal account.

"Otherwise we lose the land owners and political support," he added. "Time to step up."

With the lavish studio proposal now in limbo, and controversy swirling around Carpenter, city officials publicly have adopted a "no harm-no foul" stance.

At Tuesday's City Council meeting, Mayor Jack Batchelor Jr. stressed that "no money from the city has been spent or given to the Morning View people."

Lindley, who had enthusiastically backed the project for months, received a $7,000 raise and increased severance package in May, when he was lauded by a council member for his work on the studio proposal. Batchelor told The Bee in April that Lindley had been "talking virtually every day" with Carpenter and her group.

Last week, Lindley told spectators at the council meeting that the city did "nothing out of the ordinary" for Carpenter and her team.

"At this point, it's in Morning View's hands," he said.

Some land owners upset

From the outset, Carpenter has maintained that she needed at least 300 acres for the sprawling main campus of her studio project.

She eventually persuaded land owners to sell her 548 acres but has yet to come up with the $36.6 million needed to close the deal.

"We've been patient and we are being patient ...," said Gary Archer, a Dixon broker who represents several land owners. "At some point the rubber has to hit the road, and the rubber is called dollars."

Some land owners have expressed concerns over the city's failure to do a more thorough vetting of Carpenter's past business dealings, and said they felt pressured to sell.

Joe Azevedo, whose family owns 60 acres in Dixon and was approached about selling most of it to Carpenter, said he came away from a meeting with city officials with the clear impression that if the family didn't sell they might never be able to develop the land.

He said he and his mother were summoned to a meeting at City Hall with the mayor, Lindley and Carpenter and told that if they did not sell, their land would end up as a buffer zone between the studio and Interstate 80.

"They pretty much said if we didn't go along with the deal they couldn't control what would happen, but they'd pretty much use us as a buffer," Azevedo said. "It came across that you do this deal or we're pretty much going to make your land worthless."

Documents released by the city show a family member signed a letter of intent to sell for $50,000 an acre.

Batchelor told The Bee in a voicemail message Friday that "there were no property owners coerced or forced to enter into letters of intent to sell their property to Morning View."

Jim Danhakl's family owns 69 acres Carpenter wanted to buy. He said he had doubts about the project, but agreed to sell because he thought it would be good for the city. He said he was not in any meetings where pressure was directly applied.

"However, it was conveyed to me that if the studio is built and I was not one of the persons who sold my land to the studio, then that land would essentially be useless," Danhakl said in an interview after last week's council meeting. "You can't put houses on it because it would be right next to the studio.

"It would probably be buffer land and its value then might be diminished."

He would not disclose who told him that, saying "it came from multiple sources and they all sort of said the same thing. The implication was that the city very much wanted this project."

Addressing the mayor, city manager and council members last Tuesday, Danhakl said he did his own research into Carpenter early on and was concerned by what he found.

"Maybe the city of Dixon doesn't do this, but I certainly delved into who I was dealing with, and what I came out with just my simple investigation was these people weren't real," he said.

"So to some extent, I relied on the city's credibility where I was being assured that they were real, to go and continue negotiations."

Danhakl emphasized that he did not want to be critical of city leaders, and later Tuesday night sent a text message to The Bee saying that Dixon "should be commended" for trying to land such a large project.

Lindley and Batchelor maintain that they acted properly.

"I make no apologies for any meetings that I have sat in on," Batchelor said at last week's council meeting. "They have not been behind-the-scenes kinds of meetings, no matter who says otherwise."

Carpenter's election foray

Besides the real estate dealings, Carissa Carpenter moved aggressively into Dixon's political arena.

Last fall, she came out strongly against Measure N, the sunshine ordinance drafted by Riddle.

A long-time open government advocate, Riddle said she had worked with the city for a year to come up with mutually agreeable language but eventually gave up, opting to pursue a ballot initiative.

In the spring of 2012, before Carpenter came to town, Riddle and a handful of residents collected 1,726 signatures – almost double the number required to make the November general election ballot.

"I knocked on doors, and people were very positive about it," said Riddle.

The city was not. Mayor Batchelor, who was running for re-election, argued that the ordinance was ambiguous, costly and cumbersome for city government, which he believed already was transparent.

Among other things, the ordinance would have required the city to process Public Records Act requests within two business days; permitted unlimited public speaking at City Council meetings; and required the city to create a public records index.

Carpenter was adamant that Measure N be stopped, telling local media last year if the initiative passed, Morning View was "done" with Dixon – no movie studio, period.

The crux of Carpenter's argument, according to a question and answer published last October in the Dixon Patch, was that the ordinance would force her company to "disclose corporate financial records, corporate proprietary information and our trade secrets to the public."

Carpenter elaborated on her opposition in an interview earlier this year with The Bee, saying: "If we had, hypothetically, Tom Cruise flying to town and we told the police we need an escort from here and we're going to close this street, they could ask us where and who is coming and we'd have to tell them. Of course we'd have to disclose it."

Supporters of the measure characterized her arguments as untrue and silly.

In the weeks before the Nov. 6 election, Carpenter's threat to pull up stakes and abandon the Dixon studio dream ignited local bloggers, who fretted over the potential loss of more than 1,000 high-paying jobs.

"Voting Yes on Measure N is saying no to the studio and goodbye to a beautiful future for Dixon and its residents," wrote Gary Erwin, an ardent supporter.

Measure N was defeated by a wide margin.

At Tuesday's City Council meeting, where officials contended no one had been harmed by Carpenter's project, a Measure N supporter stepped to the podium and addressed the mayor.

"The thing that really, really bothers me," said Drew Graska, "was the shameless use of this project by yourself and some of your colleagues in defeating Measure N."

Call The Bee's Marjie Lundstrom, (916) 321-1055.

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