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Shipyards pay $1.4M to defeat Props. B and C

Over the past eight months, San Diego's shipyards have raised nearly $1.4 million to overturn the Barrio Logan zoning plan in Tuesday's primary election -- collecting nearly 20 times as much as the $70,000 donated by backers of Propositions B and C, which would lead to the plan's enactment.

Opponents of the zoning plan -- led by the General Dynamics NASSCO shipyards -- say it is designed to destroy ship repair operations along San Diego's southern waterfront by setting too many restrictions on industrial sites.

"Proposition B and C is just a bad plan," said former Mayor Jerry Sanders, president of the San Diego Regional Chamber of Commerce, which has contributed $20,000 to overturn the zoning.

But backers say the shipyards have misrepresented the plan both in their campaign ads and public statements. An independent fact-check earlier this month by Voice of San Diego found that some of the shipyards' claims were "a stretch."

In the meantime, City Council President Todd Gloria -- who has contributed $5,000 to support the propositions -- fears the campaign could set a precedent in which large corporations launch heavily funded campaigns to overturn measures that are not precisely to their liking.

“The Propositions B and C campaigns are unfortunately a challenge of facts versus funds," Gloria said. "Every community in San Diego should be alarmed at the setback to the planning process that is playing out in Barrio Logan if the all-or-nothing approach of a wealthy special interest can so easily derail a sensible plan that was years in the making.”

The ballot measure was triggered after the City Council cast a hotly disputed 5-4 vote last September to create a five-block commercial zone in Barrio Logan, which was intended to act as a buffer between the industrial areas surrounding the shipyards and residential neighborhoods nearby.

At the time, opponents of the plan -- including then-City Councilman Kevin Faulconer -- said they agreed with 90 percent of the new zoning, which had been hashed out through more than five years of negotiations between the shipyards and Barrio Logan residents and businesses.

Among other things, the plan guaranteed that the shipyards and their existing industrial suppliers could be grandfathered into their current locations, and protected from encroachments by residential developments.

But opponents objected to some of restrictions that the zoning plan imposed on business expansion in the neighborhood, as well as increased permitting requirements the plan set for new industrial businesses entering the neighborhood. The shipyards claimed those permits would threaten their very existence.

"The people behind the zoning plan got 96 percent of what they wanted," said Chris Wahl, president of the political consulting firm Southwest Strategies. "They had the opportunity to make changes that would have prevented these ballot propositions. They chose not to."

But Gloria said that after repeatedly compromising to meet the shipyards' interests -- and then being told that further compromises would be necessary -- the council majority felt that they needed to go forward, spurring the shipyards to push the measure onto the ballot.

Based on the most recent filings at the San Diego City Clerk's office, NASSCO -- a subsidiary of General Dynamics (NYSE: GD) -- has provided slightly more than half the funding for the campaign: $656,758 out of $1,354,183.

Other heavy hitters included:

+ BAE Systems (OTC: BAESY), $225,000;

+ Virginia-based shipbuilder Huntington Ingalls Industries (NYSE: HII), $100,000;

+ IMS Recycling, $70,000;

+ Continental Maritime, $50,000, and;

+ SA Recycling, $50,000.

Thirteen other businesses, associations and individuals have each contributed between $5,000 and $30,000.

The largest chunk of money was $430,260 to National Petition Management, which distributed the petitions that forced the City Council to put the measure on the ballot; $246,496 to a bevy of political consultants, led by $165,813 to Southwest Strategies; $118,831 to produce and air TV ads.

Supporters of the zoning plan say that many of the ads and fliers are inaccurate.

For instance, the TV ads say that the zoning plan would allow homes "right next to" the shipyards -- a charge that is echoed in the fliers.

But the closest residence permitted under the zoning would be more than 1,100 feet away from the shipyards -- a fifth of a mile away.

Wahl defends the claim, saying that "the difference between 'right next to' and 'nearby' is just a matter of semantics."

The Voice of San Diego dinged the shipyards on another claim, which was that the zoning plan would create more pollution in Barrio Logan.

The fact-checkers noted that an environmental impact report suggests that pollution will go up under the City Council's plan – but it would have at least the same under the plan preferred by the shipyards.

Both plans would allow more development in Barrio Logan, which would bring in more cars and therefore increase pollution.

But that is part of a citywide strategy to create more density in neighborhoods, which could theoretically be offset by setting up buffer zones between homes and industrial spaces – an item the EIR did not address, but which is one of the core reasons behind the zoning plan.

"The point we were trying to make is that the pro-Prop. B and C campaign is not telling the truth about this," Wahl said.

But the Voice fact-checkers rated the claims as a stretch, saying that even though there was an element of truth in the claims about rising pollution, the campaign literature left out "critical context," resulting in the risk that voters would be misinformed.

Supporters of the propositions say they have been hamstrung in responding to the claims, because of the funding disparity between the two campaigns.

Other than a $15,000 contribution from PowerPAC, a liberal political action committee in San Francisco, the biggest donations in support of the zoning plan include $12,500 from Frank Carrillo, head of SIMNSA, a cross-border health plan; $12,000 from Lawrence Hess, who heads the Lehbros Ltd. real estate investor firm; and $10,000 each from Mel Katz, a co-owner of the regional operations of the Manpower Inc. employment firm, and California Assembly Leader Toni Atkins.

At last count, the campaign had aired no TV commercials and spent only $3,400 on campaign literature, compared to more than $40,000 spent on creating and mailing campaign literature by the opposition.


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