What I did and didn’t recommend

STEVE SMITH

One of the tips that is given to students prior to taking the SAT is

to use only the information given to answer a question. In other

words, don’t create a rationalization for your answer if the facts

aren’t in the question.

Now hold that thought while I describe what should not be done

about Newport Beach City Hall.

I have believed for many years that chief financial officers make

lousy chief executive officers. That is because too often CFOs are

focused on cutting costs and saving money.

Cutting costs and saving money is not a bad business philosophy,

unless it is the driver for every direction taken by the company.

When that happens, everything becomes a cost center and investment in

new technology, new people, new products and new markets grinds to a

halt or, at best, is financially micromanaged and eventually stifled.

Almost anyone who is not a CFO will tell you that the worst

business meetings are with the bean counters, who insist on knowing

in which column or row on the company spreadsheet the new project

will fit.

Oh, if only life were that easy.

A good example of a good idea gone bad thanks to cost-conscious

development is the California Adventure theme park in the Disneyland

Resort.

Here was a really good idea: a theme park showcasing the

incredible wonders and variety in the Golden State. But when it was

finished, it lacked charm, mainly because it lacked style. Style, you

see, costs extra.

As a result, California Adventure has failed to live up to its

attendance projections, even though it posted last year’s largest

attendance gain in all theme parks in the nation (that was most

likely due to the fact that a small attendance left it no where to go

but up).

A few days ago, I wrote a column supporting the development of a

new city hall for the city of Newport Beach. I did not write that the

City Council should get a blank check to fund the project. I did

write that they should not build the Taj Mahal. I also wrote that the

new city hall would not be a revenue center as much as it would be a

cost center; that is, it is unlikely to bring any significant return

on the investment except for efficiencies in workflow.

Friday, April 15, a day that really should be a national holiday

for bean counters, the Daily Pilot published a letter from J.P.

Hannan of Crystal Cove who not only disagreed with me but who went on

to describe in great detail a column I never wrote -- one that

advocated “fiscal irresponsibility.”

Hannan wrote, “The idea that potential tourist revenues brought on

by increased image and stature alone is simply not enough to justify

this expense.”

An interesting connection, however, I never wrote any of that --

never mentioned anything about increased tourism revenues. What I did

write was that a beautiful city such as Newport Beach deserves a

better hall, not the eyesore that is the current facility.

But my favorite line in the letter is a comment on another thing I

never wrote: “However, Smith’s dot-com mentality of ‘build it and

they will come’ without thorough and complete financial analysis is

destined to cost this city dearly and pass a huge debt onto future

generations ... “

I shudder to think where our society would be without the genius

and vision of people such as Walt Disney, Gene Autry or the

Segerstrom family, all of whom are responsible for developing Orange

County icons, all of whom had the “build it and they will come”

courage that it takes to be successful.

Newport Beach Mayor Steve Bromberg said it best.

“What we’re trying to do here is build a city hall that is both

efficient and productive,” Bromberg told me. “We’re on two parallel

courses. We’re looking at replacing some of the buildings or

replacing everything and building a new city hall.

“Personally, I don’t think that [replacing some of the buildings]

is going to be very productive. I think that the cost of doing that

is going to be close to the cost -- if not more than the cost -- of

razing the entire facility and building a new city hall.

“I don’t see the cost driving or not driving this issue. We will

need it or we won’t need it. And if we do need it, it is unlikely

that we’ll write a check for it. We’d wind up writing a bond and the

debt on the bond would probably be about $2 million a year, and in a

$175 million budget, we can do that.”

So, there’s some fiscal responsibility and some answers that would

make any SAT scorer proud. Now, can someone please break ground?

* STEVE SMITH is a Costa Mesa resident and a freelance writer.

Readers may leave a message for him on the Daily Pilot hotline at

(714) 966-4664 or send story ideas to [email protected].