Arroyo advocates decry Rose Bowl upgrades

By Elizabeth Lee
Staff Writer

PASADENA -- The city acted appropriately when it used a fund intended for Arroyo Seco restoration to pay for more than $2 million in Rose Bowl and golf course renovations, according to a financial review by city staff.

But the review hasn't quieted Arroyo Seco advocates who believe the money was intended only for natural areas.

The Arroyo Seco fund, established in 1986 under a contract with Brookside Golf Course operators, is supposed to pay for "projects related to the development of the Arroyo Seco," according to the contract. The course operators agreed to devote 10 percent of greens fees every year to the fund.

But people disagree on what should be considered "Arroyo Seco" projects.

"The golfers generate the money, and to be excluded from any benefit of the money seems to lack a sense of fairness," City Councilman Paul Little said at a meeting of the council's Business Enterprise Committee.

Rose Bowl officials, meanwhile, say the 80-year-old stadium needs money to fund repairs.

But many Arroyo Seco supporters believe the stadium gets more than its fair share of funding. They say the money should be used solely to shore up public open space in the arroyo, Pasadena's largest park.

"My sense was the (fund) was truly intended to benefit the arroyo," Bogaard said at the meeting. "I'm going to be predisposed ... toward making up for some of the thirst and famine that recreational portions of the arroyo have suffered over the years as we exploit the arroyo for commercial purposes."

"The park uses of the Arroyo Seco have been starved for funds," the mayor said later.

Last week, the four-member committee could not agree on a recommendation to the full council regarding the future use of the fund. The full council will discuss it Feb. 26.

Nearly $3.4 million has been collected since the 10 percent set-aside was established 15 years ago. Until last year, the funds were co-mingled with the golf course fund, which is controlled by the Rose Bowl Operating Company.

The 10 percent fund came under scrutiny last year as the council was sorting through RBOC finances. Several hundred thousand dollars of the funds had already been spent on capital projects, most of them on the golf course, and council members thought there was $2.5 million left.

But they later learned that in 1992, the city had leveraged the funds to issue $2.7 million in Certificates of Participation. A COP is a financing mechanism similar to a mortgage.

The $2.7 million was supposed to "rehabilitate the Fannie Morrison Horticultural Center into a recreation and community facility and to complete the restoration work in the Lower Arroyo," according to a lending document. The interest and principal on the COPs would be paid using a portion of the annual 10 percent revenues.

Nearly $2.4 million of the COP proceeds has been spent -- but most has paid for projects elsewhere.

Once council members discovered that, Bogaard suggested an audit of the fund. But the council committee held off until staff could conduct a review.

Staff presented its findings last week. All of the expenditures were approved by the City Council over the years, according to Finance Director Jay Goldstone, including $1.66 million Rose Bowl improvements and:

-- $316,000 in design work on renovating the Fannie Morrison building complex for the proposed relocation of Kidspace Museum.

-- $359,000 for Brookside Park restroom improvements and field landscaping.

-- $65,000 for Central Arroyo and Lower Arroyo master plans.

City staff say the language in the original golf contract is unclear on whether "Arroyo Seco" projects include the Rose Bowl and golf course, so the expenditures were appropriate.

They point out that some COP documents say the money would benefit projects in the Lower Arroyo and "other designated projects in the Arroyo Seco."

Former Rose Bowl General Manager Dave Jacobs, who recommended some of the arroyo fund expenditures, said he was offended when council members implied the money could have been misspent. He didn't name them, but Steve Madison and Bogaard both suggested an audit.

"I was amazed they would be so unknowledgeable of their own financial process," Jacobs said in an interview. "If you review all those documents, there clearly was no sleight of hand, no concealment of any fact. There was never any misuse of city funds."

Jacobs represented the city in 1986 when it negotiated the golf contract. Everyone agreed all facilities in the arroyo -- including the stadium and golf course -- would be eligible for the 10 percent, he said.

In fact, "American Golf was (initially) asking us to spend that whole 10 percent on the golf course, and we said no, it could be spent anywhere in the Arroyo Seco," Jacobs said.

Madison questioned whether previous councils were adequately informed that the funds could be used elsewhere -- and whether they made their decisions with "the benefit of all the intelligence they maybe should have had."

But one City Council member who voted in 1995 to use $1.6 million of the COP proceeds for Rose Bowl improvements said he knew what he was doing.

"Steve Madison's been on the council two years and he has about that much memory," Little said.

When the council voted to spend $1.6 million of the funds at the stadium, work in the Lower Arroyo was being funded by other sources, he said.

"We knew we were moving money for things down there (in the arroyo) -- that were being paid for in other ways -- to things at the Rose Bowl," he said.

The question now facing the council is whether the Rose Bowl and golf course can use the fund in the future -- and whether the city should reimburse the arroyo fund for any of the COP debt service already charged against it.

Rose Bowl board President Porfirio Frausto said the council shouldn't limit its options by restricting the fund for natural areas only. Plus, he said the stadium needs the money.

"She's 80-something years old and there's no capital improvement budget," he said. "You're darn tootin' I'm going to be fighting for the 10 percent."

-- Elizabeth Lee can be reached at (626) 578-6300, Ext. 4461, or by e-mail at elizabeth.lee@sgvn.com.