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By Brian Hews
Hews Media Group-Community News has obtained a 2011 Reimbursement Agreement (agreement) between the Citadel Outlet Mall and the City of Commerce, outlining improvements to that part of Telegraph Rd. immediately in front of the Citadel, containing questionable and shoddy documents submitted by Citadel owner Steve Craig as reimbursement for the project.
In 2011, Citadel owner Steve Craig approached City Administrator Jorge Rifa and “proposed” that the City repair Telegraph Rd. in front of his Citadel Outlet Mall.
The City, as written in the agreement, “had not planned to proceed with the project at the time.”
But the very next line of the agreement stated, “The City is willing to allow the work to be completed by Craig and provide reimbursement.”
The agreement authorized Craig to proceed with the paving and restriping of Telegraph Road south of the Atlantic Avenue off ramp and ending at Gaspar Avenue, which was immediately in front of Craig’s Citadel Outlet Mall.
The agreement put Craig in complete control as the General Contractor, against all City transparency laws, which allowed him to choose any subcontractor he wanted and to go forward with the project.
No documents were included as an estimate of the cost of the project, only a line was included in the agreement saying, “It was estimated that the cost would be $150,000 and that the city agreed to reimburse Craig for that expense.”
The city agreed to remit all 2011 fourth-quarter tax revenue from the sales of the three new outlet stores located inside Craig’s Citadel Outlet Mall as reimbursement.
The stores included Michael Kors, Fossil, and Coach.
On March 27, 2012 Craig wrote a letter to Commerce City Administrator Rifa stating that the Telegraph Rd. project ended up costing almost $163,000 and that he wanted his fourth-quarter sales tax reimbursement per the agreement.
Craig submitted a half page letter to Rifa outlining the sales of the three companies.
But the document submitted did not come from the corporate offices of the three companies, but from Craig himself, and contained typographical errors.
According to sources inside the city, no audits were performed and no one inside the City checked whether Craig’s numbers were correct or not. 84% came from one store-Coach.
In spite of the improper submittal of revenue numbers, which totaled over $13.7 million, the city reimbursed Craig 1%, which amounted to over $137,000.
Four months later on July 31, 2012 Craig emailed Mr. Danilo Batson the Assistant Director of Public Services for the City of Commerce describing an additional $26,000 invoice from Ben’s Asphalt “representing the work that was completed in regards to the Telegraph Road project.”
Craig then demanded a check for $26,000 and asked that it be sent immediately.
Danilo subsequently forwarded the email to the City’s Accounting Department asking for payment of the invoice.
The email was not sent to Rifa, yet the check was paid to Craig, in spite of the project over budget by $13,000.
Received Preferential Treatment Prior to Telegraph Project
This is not the first instance where Craig has received questionable treatment from the City Council.
In February of this year, HMG-CN learned that the Citadel Outlet Mall’s large double-faced digital signs located off the 5 freeway in Commerce were in violation of City, State and Federal outdoor advertising laws and that Mayor Tina Baca Del Rio, Mayor pro tem Lilia Leon, Councilmember Ivan Altamirano, Councilman Joe Aguilar, and City Attorney Eddie Olivo have been aware of the violations yet failed to take action.
At a February City Council meeting, they tried to cover their tracks by passing a sign ordinance amendment that brazenly read, “Conversion Of Citadel Digital Display Signs To Off-Site Digital Signs.”
In reviewing the new section, HMG-CN confirmed that the City Council approved the amendment to the exclusive benefit of the Citadel and Steve Craig.
The code exempted the Citadel as the only business in the City to be free from most sign requirements.
The proposed code gave digital billboard permits to the Citadel despite a rule that had been the law in Commerce for over 30 years.
The City could have sued Craig, and likely won, for over $1 million in past billboard revenue, but chose not to initiate any action.
Many residents were also angered over the Citadel Bus deal that was spearheaded by Councilman Ivan Altamirano.
In that deal, the city obtained a bus that is used almost exclusively to shuttle Citadel customers back and forth.
Altamirano said the bus would “pay for itself, with no impact on the city budget.”
Documents obtained by HMG-CN showed the city is paying for the bulk of the expenses of the bus to the direct benefit of Steve Craig and his Citadel Outlet.
In June of this year, once again the City Council, consisting of Mayor Lilia Leon, Mayor pro tem Tina Baca Del Rio, Councilmembers Ivan Altamirano and Oralia Rebollo, favored Craig and the Citadel by entering into a contract to hire two L.A. County Deputy Sheriffs to work exclusively inside the Citadel Outlet Mall.
Since that hiring, there have been several shootings and deaths in Commerce.
With only Councilman Argumedo objecting that Craig should pay for both deputies, the remaining Council voted for a deal where Craig would pay for one deputy, Commerce will pay for half of the other, with the remaining balance picked up by a grant from the state.
But, after one year, to the ire of Argumedo, the City would pay the entire salary plus benefits of one deputy who will work exclusively at the Citadel Outlet Mall.
The cost to the city, including salary and benefits, is well over $110,000.
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