Both Resumes Long on Business Experience

ELK GROVE, Calif. —  Phil Angelides is strolling along a grassy promenade inside Laguna West, offering his defense of the housing community he developed as a pedestrian-friendly antidote to suburban sprawl.

Critics contend that the 1,000-acre project south of Sacramento has achieved just the opposite -- a view its creator is trying to dispel with a tour of bike paths and greenbelts.

As if on cue, two joggers whiz past.

“I paid them” to run by, Angelides jokes.

Wisecrack aside, California’s state treasurer knows that his career as a private land developer is facing renewed scrutiny as he seeks the Democratic Party’s nomination for governor in Tuesday’s primary.

Angelides’ backers say he was a civic-minded, politically savvy businessman who drove himself and others hard to create a new kind of master-planned community that balanced the needs of people and the environment. The 52-year-old candidate counts 70-plus endorsements from environmental groups and individuals, and he touts a long list of awards for his work on behalf of green issues.

“I tend to think of him as an idealistic pragmatist,” said Peter Calthorpe, a Berkeley-based architect who designed Laguna West. “He’s very idealistic about finding ways to make things better, but also how to make them work. It’s not just abstract theory with him.”

Yet Angelides’ former occupation, which made him a millionaire several times over, has put him at odds with some environmentalists and local residents, who depict him as just another sprawl-happy developer. What’s more, his business career -- and association with Sacramento’s largest and wealthiest landowner, Angelo K. Tsakopoulos -- has become fodder for his primary opponent, State Controller Steve Westly, another wealthy former businessman.

Sacramento-area environmentalists claim that Angelides used his political clout and Tsakopoulos’ deep pockets to get cheap farmland and sensitive wetlands rezoned, clearing the way for lucrative housing projects. The criticism is featured prominently in recent Westly campaign ads.

Critics also point to Angelides’ continuing political ties to the real estate industry. He has raised at least $9.2 million since 1999 from developers, builders, title insurers and others in the business -- about a quarter of the contributions he has received since being elected treasurer in 1998.

Much of that came from Tsakopoulos, who gave fellow Greek American Angelides his start in the real estate business in 1984. Two years later, Angelides branched out and formed his own company -- River West Developments.

During his 15 years as a developer, Angelides had a hand in many of the major planned communities in and around Sacramento, helping to build more than 10,000 homes. He also faced at least two significant environmental confrontations.

In 1987, River West violated the federal Clean Water Act when it filled and graded 21 acres of federally protected wetlands for a housing project near Folsom. Although the company had local and state permission, the Army Corps of Engineers said it didn’t have federal approval and shut down the site. Eventually, an agreement was reached to minimize the damage and the subdivision was built to include 30 acres of wetlands.

Angelides called the episode a misunderstanding. “I had all the local permits and all the state permits. I believed absolutely and still do today that I had all the federal permits. But agencies disagreed. In a matter of weeks, we resolved every issue,” he said.

A decade later, while seeking to rezone farmland into another housing and retail project known as North Natomas, he made a point of including a habitat conservation plan. But environmentalists saw the plan as a scheme to open a large swath of open land north of downtown Sacramento to development, and criticized Angelides’ persistent lobbying to win City Council approval of the project.

Jude Lamare, a member of a group that sued to stop the development, cited North Natomas as an example of how Angelides “works the political system to build support so nobody looks closely” at his projects.

The plan was thrown out by a federal judge but was reapproved three years later after changes were made. Angelides defends his lobbying as key to protecting wildlife habitat in the region from future development.

Angelides sold River West in 1999, but he still earns millions from real estate investments. According to his tax returns, he made $11.6 million from 1998 to 2004, mostly from continuing real estate partnerships with Tsakopoulos and others.

When defending his business record, Angelides often points to Laguna West as the best example of his desire to be an environmentally conscious developer.

Fifteen years ago, despite having approvals in place for a tract-home subdivision, he decided to try a then-untested concept called New Urbanism.

The design was hailed as eco-friendly because it encouraged residents to get out of their cars and get to know their neighbors. They would be able to walk to workplaces, shops, schools, civic centers and parks, all of which would be incorporated into the community. And there was talk of extending the region’s light rail system to the development.

But his timing was off. The early 1990s saw one of the worst housing downturns in the state’s history. Plus, many builders resisted the community’s unconventional home plans, which featured large front porches close to the street and garages tucked in the rear.

“It was commercially unviable,” said John Wallace, a Sacramento-based real estate developer.

Angelides eventually agreed to incorporate more conventional designs.

Today, Laguna West is a partly realized dream. With its three lakes, meandering walking trails amid greenbelts and Mayberry-like town center, it has won accolades from its residents.

Angelides has “accomplished what he set out to do,” said Wes Bryan as he and his wife, Janet, sat on a bench overlooking a lake on a recent Saturday. “The parks, lakes and walkways bring people together. We’re down here sometimes twice a day.”

Laguna West’s mix of housing adheres somewhat to Angelides’ vision of meshing all income groups into one master-planned community. Today, the project includes subsidized rental units, market-rate apartments, 900-square-foot lakeside bungalows and suburban McMansions with prices ranging from the $400,000s to more than $1 million.

But other than a computer factory Angelides lured to the area, much of the commercial and industrial development that was supposed to bring jobs close to residents hasn’t panned out. Some neighborhood retail stores just now are starting to rise from long-vacant lots.

Meanwhile, the 10-mile commute into downtown Sacramento takes 40 minutes or more.

“It doesn’t look any different than any other Southern California suburb,” said Jim Pachl, an attorney for local environmental groups who has criticized Angelides’ green claims.

Angelides acknowledges that his vision for building a better suburb fell short, but considers Laguna West a work in progress.

“I see it very much as a significant achievement. This was a big risk, an innovative ‘smart-growth’ project before the word ever existed,” Angelides said while looking out at one of Laguna West’s lakes.

Nevertheless, he added, “we didn’t achieve everything we set out to do here.”

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Lifsher reported from Elk Grove and Haddad from Los Angeles. Staff writer Dan Morain in Sacramento contributed to this report.