Majestic’s letter (yes, the actual one) blasting Walnut

Forgive us.

Thanks to a mishap, we didn’t post a copy of a letter pertaining to a story we wrote. Last week, the company hoping to build a National Football League stadium complex in the City of Industry presented this letter to the Walnut City Council, which has sued the developer. The letter refuted, among other things, claims made against the company, Majestic Realty, and its project.

An issue emerged the day following Wednesday’s city council meeting. After this newspaper filed a public records request for a copy of the letter Thursday, Walnut said it was consulting its attorney concerning the release of the letter, which included a confidential attachment, because of its pending litigation. (The attachment, according to the letter, documented Walnut’s settlement items in the now-terminated negotiations with Majestic.)

Majestic, however, provided this newspaper with a copy. And now, so do you. (See the text of the letter after the jump.)

Walnut has ten days from the public records request to make a decision of the release. So, we’ll see what emerges. But here are two facts to consider: The letter was presented at a public meeting and the first page of it was read publicly.


Mayor and City Council
City of Walnut
21201 La Puente Road
Walnut, CA 91789-2018

Re: Communication Re My May 27, 2009 Letter To You

Honorable Mayor and City Councilmembers:

I want to respond to you regarding your concerns about the letter I sent you on May 27, 2009 regarding the settlement meeting for the lawsuit you filed against the Industry Business Center project and the letter I received from your counsel, Jan Chatten Brown, dated June 1, 2009.

Ms. Chatten Brown seems to be under the impression that I violated an “agreement” by releasing my letter to the press. Although I have no objection to my letter being given to the media, out of respect for the settlement process I did not release it. Not only did I not release the letter to the press, I did not read it in my oral remarks to the Council. I did not publicly disclose the contents of the discussions, and I was careful in my oral remarks not to discuss the details of our discussions. The City of Walnut decided to release a copy of my letter and it was made available by the San Gabriel Valley Tribune on its website.

In addition, there is no agreement which prevents the City of Walnut from releasing the City of Walnut’s own demands against the Industry Business Center project, in fact we encourage the release of the information. The public should know what the City of Walnut is asking for. In our settlement meeting, we agreed to keep confidential what was said in that meeting, and we agreed not to release the written offer of settlement that the City of Walnut provided to us. We have honored that agreement. We have no objection to the City of Walnut releasing to the public the written offer they presented at the settlement meeting

However, I want to respond to a number of incorrect statements made by Ms. Chatten Brown in her letter. I believe it important for the Mayor and the City Council of Walnut to have information on these inaccurate statements that Ms. Chatten-Brown has made on your behalf. In addition, it is inappropriate for her to discuss her legal justifications for the lawsuit in her letter to me. She should address all of those issues directly with my attorney.

Unfortunately, Ms. Chatten-Brown’s letter to me goes into detail about the terms of the City’s settlement offer, and in addition makes several inaccurate statements that can only be refuted by referring to the City’s written offer of settlement.

I will address each of Ms. Chatten-Brown’s statements:

1. “. . . Walnut engaged in a careful process to quantify, to the extent possible, the economic impacts the proposed Stadium and Entertainment Complex would have on the City of Walnut and its residents.”

Response: We find this statement puzzling. This seems to confirm that Walnut’s lawsuit has been brought for “economic impact” purposes, and not a legitimate environmental purpose under the California Environmental Quality Act. The Industry Business Center project has no obligation to provide “economic” benefits to the City of Walnut. That being said, the proposed Industry Business Center project will in fact provide significant economic benefits for the region and for Walnut including over 6,735 permanent jobs and nearly 12,000 construction jobs in the region and will generate $21,189,000 million in revenues for state and local governments and over $762 million in economic output, not including the benefits that would come from any Super Bowl held at the Stadium. When the State’s unemployment rate is exceeding 11% and virtually every level of government is suffering economically, we find it amazing that the City of Walnut chooses to stand in the way of this project.

2. “sports stadiums across the country have not achieved economic benefits for surrounding communities.”

Response: We are surprised that the City is so focused on the economic issues and not the environmental issues. The evidence is clear: the Industry Business Center project will be a huge economic benefit to the region. Despite the fact that numerous cities, Chambers of Commerce, School Boards, Water Boards, Elected Officials, Educators, Unions, Law Enforcement and Firefighter Associations, Business Associations, Governmental Agencies, Community Leaders, Economic Development groups and thousands of Citizens throughout the regions have endorsed the project, Walnut is preventing economic opportunity for the entire region. Regardless, Ms. Chatten Brown’s statement is based upon stadiums that are constructed with public funds and is therefore not relevant for the stadium planned for part of the Industry Business Center project, which will not receive a public subsidy

3. “Without discussing any of the specifics, the list of mitigation measures that have the potential of resulting in a settlement of the pending litigation were designed to address the Direct Impacts (which included Traffic & Roadway, Public Safety, Noise) and the Quality of Life Impacts (Light, Aesthetics, Air Quality, Community Facilities, Mobility) of the proposed project.”

Response: This statement is not correct. In Attachment A, (which is a confidential settlement communication from the City of Walnut), we have listed each item requested by the City and have described how those items are not related to the “direct” or “quality of life” impacts of the Industry Business Center project or the Stadium specifically. Many of these items have nothing to do with the environmental impacts of the Industry Business Center project. A banquet center?? An aquatics center?? A request for 48 acres of land?? These do not even pass the red face test. Attachment A also lists our estimate of the total cost of the items included in the City’s settlement offer.

4. “For example, the intersection improvements— the largest cost item — were based directly on mitigation measures identified in the City of Industry’s Supplement to the 2004 Industry Business Center EIR.”

Response: This statement is again not correct. Intersection costs are not the largest cost item. First of all, the value of your requested relocation of the Metrolink Station alone probably exceeds the $64 million in intersection costs you requested. In addition, your request to add a roof to the building will not only make it virtually impossible for us to qualify as the first LEED Certified (Green) Stadium in the NFL, it will cost an estimated $500 Million. Second, the City of Industry has already adopted specific mitigation measures providing for intersection improvements listed in the EIR as enforceable legal commitments. The fair share of these improvements will be paid. There would be no need for the City of Walnut to have an additional settlement agreement listing those same intersection improvements. We have estimated the cost of intersection improvements included in the EIR including necessary right of way acquisition and the project’s share of those improvements which is significantly less than the amount requested in the City’s request. The City also has requested street improvements that have nothing to do with the project and which have not been environmentally cleared (such as connecting Meadow Pass street through the neighborhood, a pedestrian bridge at Mt. San Antonio College and the relocation of the Metrolink station mentioned earlier) and has assumed that the Stadium would be responsible for 100% of the cost. In Attachment A, the additional intersection and road improvements included in the City of Walnut Settlement Offer are listed, and the description of the additional improvements demanded by the City of Walnut, unrelated to the impacts of the Industry Business Center project, is set forth. Somehow, in your calculations this number for 7 intersections grew to over $76.9 million dollars not including the Metrolink station and future maintenance of roadways. All of this appears to be an attempt to solve what appears to be all of the City of Walnuts existing traffic problems.

5. “the settlement reached with the City of Diamond Bar certainly includes amenities intended to offset certain quality of life impacts.”

Response: This statement misstates the settlement agreement with Diamond Bar and demonstrates a lack of understanding of the impacts of the project on Diamond Bar and the mitigations necessary to eliminate those impacts. For example, the agreement re the disposition of the former Honda dealership site is directly related to the Industry Business Center project because realignment of a road, construction of a westbound on-ramp and reconfiguration of the Honda dealership site is part of the specific traffic mitigation requirements of the Industry Business Center project. The payment to the Community Facility Fund is to offset the game day costs perceived by the City of Diamond Bar along with the City of Industry’s desire to be a good neighbor. The one million dollar contribution for a new athletic field at Lorbeer School involves a grant from the Majestic Realty Foundation to demonstrate up front what the project proponents have stated all along, that the project will generate charitable funds for local schools, charities and community organizations.

6. “While you criticized Walnut for, . . . requesting “tens of millions of dollars of projects that have nothing to do with our project’, Diamond Bar may obtain a similar amount of money for the development, operation and maintenance of community facilities.

Response: This statement is again incorrect. Diamond Bar will not receive tens of millions of dollars, and certainly will not receive “tens of millions” of dollars “for project that have nothing to do with our project.” Under the agreement with Diamond Bar, it will receive specific funds for road improvements and noise mitigations that are specifically related to the Industry Business Center project. Attachment A to this letter contains an analysis of the hundreds of millions of dollars of payments and projects demanded by the City of Walnut which have nothing to do with the Industry Business Center project.

7. “The City of Walnut has a duty to its residents to project the City’s fiscal health and environment.”

Response: While I understand that the City of Walnut has substantial issues related to its fiscal health, such issues have nothing to do with the Industry Business Center project. Interestingly you are spending hundreds of thousands of dollars on attorneys and consultants on this lawsuit. This money could have been spent for many of the Quality of Life developments requested in your demand of the project. The value of commercial property within Walnut should increase with the completion of the Industry Business Center project, which should substantially increase the tax revenue received by the City of Walnut in comparison to the absence of the project.

8. “..Walnut has now had two formal sit-down meetings with you..”

Response: Again an untrue statement. I recognize that we have been working on this project for over 2 years, but our meeting on May 27, 2009 was the first settlement meeting that the principals of Majestic Realty Co. have attended.

We do not want to give the impression that we are not interested in discussions with the City of Walnut. In fact nothing could be further from the truth, however, as you can see from the discussion herein we do not currently believe that the City of Walnut is interested in meaningful and realistic negotiations regarding the true impacts on the City and what mitigations should be provided to ensure the impacts on the City and the quality of life of its citizens are taken care of. I hope we will be able to have a meaningful discussion in the future.


John H. Semcken III
Project Executive

Cc: City of Industry (w/confidential Attachment “A”)
Members of the Public (without confidential Attachment “A”)