Legal Fight Spotlights Mayor’s Role in Project

Within a week after the Santa Ana City Council approved an $8.3-million bond issue to buy eight dilapidated apartment buildings on South Minnie Street, Hermandad Mexicana Nacional of Santa Ana filed suit to try to stop the redevelopment project, alleging a conflict of interest because the mayor had ties to a part owner of the buildings.

Hermandad leader Nativo Lopez said he filed the lawsuit a week after the council’s March 5 vote because Mayor Miguel A. Pulido “didn’t follow the law and do a full disclosure” about his partnership with Kris Kakkar, owner of the 127 units on Minnie Street.

Pulido and Kakkar are partners in two real estate ventures in neighboring Garden Grove. Pulido said he has distanced himself from the Cornerstone Village project on Minnie Street and all studies and discussions related to it.

“The minute I saw any potential conflict of interest, I walked away from any decision or vote,” he said in a recent interview. But last year, he signed a city contract for the exterior renovation of 46 buildings in the 1100 block of South Minnie Street, including the eight owned by Kakkar.

The city’s bond will finance the purchase of Kakkar’s buildings by Avalon Communities, a Latino-owned, for-profit company that builds low-income housing, and Civic Center Barrio, a nonprofit group that will manage the properties.

Santa Ana housing manager Patricia Whitaker said the units are valued at $50,000 each, meaning that Kakkar stands to make $6.35 million from the deal.

But Kakkar said he and his partners will barely break even. He said that the investors paid $6 million for the properties in 1989 and that there is an existing $4-million mortgage.

“I’m only a 10% owner,” Kakkar said. “There are eight partners in the properties. I’ll be lucky to get my original investment back.”

Kakkar said he began discussing the sale of the properties with Avalon before Cornerstone was approved by the Santa Ana council.

Lopez contents that Pulido’s signature on the renovation contract--even though he did not cast a vote for it--still constitutes a conflict of interest because the mayor failed to reveal his business ties with Kakkar. Pulido did file a public disclosure form last summer indicating a financial interest in properties in Garden Grove, but he didn’t name the partnership or its principals.

Pulido said he has requested “a formal opinion” from the state Fair Practices Political Commission about whether that omission violates conflict-of-interest laws.

In any case, Pulido said, he did not actually sign the contract. “Somebody stamped my name,” he said. “I don’t know how or why it happened.”

He said his stamped signature is frequently put on proclamations and letters issued by the city. “This is the only time I can remember it [being] used on legislation,” he added.

Pulido also said the stamped signature is a “ministerial function” and denied that he did anything to influence the council’s decision to approve the renovation project.

Minnie Street resident Victoria Zaragoza said the whole controversy smacks of politics and wondered if “this dispute should be settled at City Hall” instead of through a lawsuit.

Lopez disagrees.

“There’s nothing political about the lawsuit,” Lopez said. “Nobody has had a longer commitment to improving that area than [Hermandad]. We organized rent strikes in 1984 and 1987 to force landlords to repair their properties.”

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Conflict Zone

A $5-million restoration project on South Minnie Street in Santa Ana is the target of a lawsuit filed by an immigrant rights group. Residents fear the suit will stop the much-needed work.