The Public Eye

City manager called developer ‘mentally ill’ before council rejected his gas station

Developer Paul Petrovich waits to speak to the City Council in November 2015 at City Hall in Sacramento. His relationship with a key councilman deteriorated into hostility, emails show.
Developer Paul Petrovich waits to speak to the City Council in November 2015 at City Hall in Sacramento. His relationship with a key councilman deteriorated into hostility, emails show. Sacramento Bee file

Weeks before the city denied developer Paul Petrovich’s gas station proposal in late 2015, then-Sacramento City Manager John Shirey sent a blunt text message to City Councilman Jay Schenirer:

“I have read all of Paul’s blasts to us today. I have concluded he is mentally ill and is in serious need of psychiatric treatment,” Shirey wrote.

That text and other city communications have taken center stage this spring in a lawsuit filed by Petrovich against the city. The developer contends city officials illegally colluded to deny him a permit to build a Safeway gas station in Crocker Village, his community of homes and stores under development in the former railyard next to Curtis Park.

He argues they did it because they don’t like him. His legal team has pointed to the Shirey text and several other emails and texts as evidence of what they say is “personal animus” and vote-fixing at City Hall.

City officials counter that they denied the gas station permit because it was a bad fit for the neighborhood and was opposed by many nearby residents.

For his part, Shirey told The Bee last week that despite his opinion of Petrovich’s mental state, he doesn’t hold personal ill will toward the developer. In fact, he recommended that council approve the gas station.

Hundreds of pages of emails, texts and other communications – most obtained by The Bee through the California Public Records Act – offer a behind-the-scenes glimpse of one of the biggest development fights in the city in the last decade.

They show tense relations at times between Petrovich and some key city officials. The developer focused much of his ire at Schenirer, the councilman for the Crocker Village site and surrounding neighborhoods, who voted against the gas station.

“The Schenirers of the world … are mere speed bumps,” Petrovich wrote in an email to a supporter at one point. Schenirer, saying he was offended by the developer’s emails, refused to meet with Petrovich in the weeks before the council vote.

Petrovich, 57, owner of Petrovich Development Co., is one of the most prolific developers in the region. Much of his work has been constructing suburban shopping centers, but he also built the pioneering Safeway complex on R Street in midtown a decade ago, a risky effort that set the foundation for the current urban renaissance in that area.

Crocker Village stands out as Petrovich’s most ambitious effort, a heavy lift that has taken more than a decade to launch. The project, originally called Curtis Park Village, is on a 72-acre former toxic railyard that had sat empty in the heart of Sacramento for decades, flanked by leafy and picturesque Curtis Park to the east, railroad tracks and Sacramento City College to the west, and Sutterville Road on the south.

Houses are under construction, but commercial construction has lagged as Petrovich and his legal team take the city on in court. They have obtained reams of emails and texts from city and former city employees, including Shirey and Schenirer as well as former Mayor Kevin Johnson, and are seeking more.

The Petrovich team argues that Schenirer and other City Council members violated requirements that they keep an open mind prior to conducting what are considered “quasi-judicial” hearings, where they act as impartial judges, not advocates. The item came to the council when a Curtis Park group appealed the earlier approval of the gas station by the city planning commission.

Documents show Schenirer communicated frequently with opponents in the last weeks, including arranging a group meeting, although he also talked with proponents. At one point just before the vote, he texted an opponent: “Are you all planning any visits to council members. If so, I have suggestions.”

Schenirer also sent Johnson a list of “talking points” noting that the gas station was not part of the original Crocker Village plan that the community agreed to in 2010 and that an overwhelming number of neighborhood residents opposed it.

As part of their argument that the vote was predetermined, the Petrovich team points to a memo by Johnson staffer Scott Whyte, which looks to be connected to an email dated the day before the council vote. The Petrovich team characterized it as a “script” for the council meeting. In it, Whyte wrote that Schenirer “punches up to make motion,” Councilman Steve Hansen seconds it, and Johnson supports it. That sequence did in fact happen at the council meeting. The Whyte memo also lists talking points similar to the ones Schenirer had sent to Johnson and Whyte.

The city’s written rule on quasi-judicial hearings states that council members “shall be fair, impartial, and unbiased when voting on quasi-judicial actions.”

In a statement to The Bee, City Attorney James Sanchez wrote that the city believes “the record supports the ultimate council decision,” and “while an elected official has to remain unbiased to ensure a fair proceeding, they can fairly state concerns and see if the evidence presented in the quasi-judicial hearing record fully addresses their concerns.”

JoAnne Speers, former director for the Institute for Local Government, now adjunct professor at University of San Francisco, said the California Municipal Law handbook frames the issue as a questions of whether there is demonstrated evidence of bias or circumstances creating an unacceptable risk of bias. The judge in each case will decide based on evidence presented, she said.

‘Sausage making’

Legal issues aside, the emails tell a story of strong personalities and turbulent relationships.

Early on, Petrovich and Schenirer appeared to work well together guiding the development project forward. “Thanks Jay for carrying the day,” Petrovich texted at one point in 2013. “Always glad to help,” Schenirer responded. Before another meeting, Petrovich texted Schenirer offering to grab a coffee for him at Temple Coffee Roasters.

Petrovich’s feelings about Schenirer soured after the developer applied for a permit to build the 16-nozzle Safeway gas station, and residents of Curtis Park, which Schenirer represents, flooded City Hall with emails in opposition. Petrovich called gas station opponents “crazies” and accused Schenirer of empowering their “uncivilized” behavior.

Much of the fight revolved around what type of development is appropriate for the area. City officials said they want to discourage cars and encourage transit use. Petrovich countered that the inclusion of 700 parking spaces at the shopping center shows the project is car-oriented despite the proximity of a light rail station. The city also is requiring Petrovich to improve the Highway 99 offramp at Sutterville Road.

Safeway offered to provide jobs for more than 200 Oak Park residents if the city allowed the gas station. Without the gas station, Safeway said it would not build the supermarket. Schenirer, in an email to the mayor, said dangling the jobs was an attempt to divide the community along social, economic and racial lines.

In one email to a supporter, Petrovich expressed an almost epic sense of himself, saying God had bestowed him with amazing gifts that allow him to create jobs and help the poor.

“This is what I do. This is who I am. That is what no one understands about me,” Petrovich wrote about the jobs. “It’s so out of the norm, the established political process and press interprets it as nefarious when it’s really a take-no-prisoner approach to breaking the cycle of poverty I once experienced.”

In contrast, “the Schenirers of the world … are mere speed bumps,” he wrote. “He is a cynical and shallow politician surrounded by shallow people who can’t see the big picture and have egos too large to take what is handed to them. … It’s his mistake to assume I am like the rest. He does that at his own peril.”

In another email, he bemoaned the “god awful sausage making” at City Hall, although at the same time he was pushing numerous city officials to work on his projects or help him resolve business disputes.

The developer’s demanding ways appear to have put some city officials on edge in dealing with him. A few weeks before the gas station vote, Assistant City Manager John Dangberg agreed to help Petrovich deal with a neighbor problem on another project, but Dangberg pointedly told Petrovich he would only do it if the developer was civil, honest and willing to “work through disagreements without discrediting or undermining those we disagree with.”

Petrovich responded by asking Dangberg to get on the phone so that they could “jump to the chase on what can or can’t be done by the city.”

Pharaoh and Moses

City Manager Shirey’s text about Petrovich’s mental state came after Petrovich blasted Schenirer in an email to City Hall officials, including Schenirer and Shirey.

In it, Petrovich accused Schenirer of trying to start a race war and appeared to reference Schenirer’s Jewish faith. He complained about a Sunday meeting Schenirer had set up with some pastors: “Holding this on a Sunday is about the worst slap in the face to the faith-based community one could make. Why not Saturday (get the point)?

“The only explanation is that he (Schenirer) is looking to create a race war and truly pit one neighborhood against the other or he is tone deaf.” He added, “Many pastors have told me it reminds them of Pharaoh when Moses begged for him to free his people and wouldn’t. We all know how that turned out.”

Two weeks later, just before the council vote, Petrovich switched his tone, sending a formal and polite letter to Schenirer, cc’d to the rest of the council, requesting a last-minute meeting. “Let’s work together to get this right,” he wrote.

Schenirer did not respond. He told Petrovich why from the council dais the following week, before leading a 7-2 council vote to deny the permit.

“Just to be honest, I mean with some of the other emails that you’ve cc’d me on where you’ve been very derogatory about me, I told Rob (Fong, a Petrovich representative and former city councilman),I’m not going to meet with you anymore because of that behavior. It’s just, there are consequences, and I’m not trying to preach to you, but that is my choice.”

Councilman Larry Carr, who voted for the gas station, sent Petrovich an email two days later, saying, “There was no rational reason to deny the use permit. Obviously the final vote was influenced by other factors. Public policy by personal animosity leads to bad results.”

But Councilman Hansen put the onus on Petrovich in an email after the vote: “It was sad to see the way you handled this, which left us with little choice.”

Petrovich wasn’t done trying. He met with Mayor Johnson and some pastors soon after and proposed a compromise that would allow Safeway to build a gas station if its sales numbers at the proposed new store were to slump and if a nearby Raley’s planned for Freeport Boulevard ever requested a gas station permit. That effort appears to have ended abruptly, with Petrovich sending an email to Johnson accusing him of backing out of the deal. “It’s on you if this goes sideways,” he wrote the mayor.

In February 2016, Petrovich filed the first of two lawsuits against the city seeking to overturn the council decision. A second lawsuit seeks financial damages. At this point, the city has spent $330,000 to defend itself, according to the city attorney’s office.

A final hearing date in Sacramento Superior Court is likely this fall. Meanwhile, the Petrovich legal team continues its push for emails and texts. A judge has given them the go-ahead to take depositions of several people, including former Mayor Johnson, to see if any erased texts or emails on their personal devices dealt with the Crocker Village issue.

The Petrovich attorneys point out this is the second time in a year that Johnson has had to deal with the question of deleted emails or texts during a lawsuit. Johnson was called out in court last year for failing to maintain all required texts during a lawsuit regarding the downtown arena.

With the dispute in court, Petrovich had some advice for Schenirer earlier this year. He sent the councilman an email calling him arrogant and telling him to turn over emails and texts or face a dark “stain” on his record. “Perjury will apply here Schenirer, and do you really think after going this far I am going to rest until this all comes out?”

There’s no record that Schenirer answered him.

Tony Bizjak: 916-321-1059, @TonyBizjak

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