KA-BOOM: For those of you who regard train
wrecks as a spectator sport, we currently have two such collisions
unfolding before our very eyes. The first and more obvious crash
involves the Santa Barbara News-Press, whose owner
Wendy P. McCaw has proven yet again her
willingness to cut off her head to spite her face. Citing disgust
with McCaw’s poisonous management style, two more reporters walked
off the job this past Friday, bringing the number of resigning
editors and reporters to 13. The latest are Josh
and Chuck Schultz. With seven
years under his belt, Molina was a heavy lifter in the newsroom and
one of the News-Press’s rising stars. Schultz worked just
about every beat during his 25 years at the News-Press
except City Hall. Most recently he covered the courts with an
understated ease that belied the complexity of the assignment.
McCaw and her spin
blame the mass exodus afflicting her paper on the
alleged sour grapes of disgruntled newsroom employees intent on
using the news pages of her paper to vent their own personal
political beliefs. But anyone who’s spent five seconds with Schultz
knows what nonsense that is. With Chuck there is no hidden agenda;
what you see is what you get. While Wendy talks about restoring
ethics, fairness, and
professionalism to the newsroom, she has, in fact,
been doing the exact opposite.

Last Tuesday, for example, the paper ran a mysteriously unsigned
article about the permanent restraining order that
McCaw and the News-Press sought four weeks ago against
former business editor Michael Todd, one of the
first five editors to resign. The article detailed allegations made
by a News-Press photographer that Todd had made
threatening remarks to her on two occasions some
time in May, and her dissatisfaction that Todd was not disciplined
in return. For the record, Todd has never denied making the
comments attributed to him, insisting they were made in jest. When
the photographer first brought her discomfort to his attention,
Todd claims he apologized profusely. This is not new news. In fact,
we reported all this four weeks ago and included both the
allegations and Todd’s response. (We also reported that the paper’s
management never saw fit to express concern about the issue until
just after Todd wrote a stinging letter to McCaw late in June,
rebuking her for interfering with news coverage on behalf of the
rich and famous.) Last week’s unsigned article was
conspicuously — and unprofessionally — one-sided. That’s fine for
editorials, perhaps, but not for news articles. Todd told me he was
never contacted for his version of events, nor was his attorney.
Given that the story was already moldy by the time the
News-Press got around to reporting it — four weeks after
the fact — one might wonder why the newspaper couldn’t have waited
just one more day to get Todd’s response. According to
persistent — if unconfirmed — reports emanating from the paper’s
gossip mill, the Todd story appeared out of the blue just minutes
before deadline and the editor in charge feared for his job if he
did not run it. If the Todd story reflects the new professionalism
of the News-Press, perhaps the paper’s new motto should
become “Burn Every Bridge, Reward Every Friend, and Punish
Every Enemy

The other train wreck involves developer Bill
’s last-gasp efforts to build 62
Ritz-Carlton time-share condos
on lower State Street. The ever
ebullient Levy has worn out his welcome even among his City Hall
protectors, embarrassing himself and everyone else associated with
the high-gloss enterprise by his chronic failure to obtain funding
necessary to get the project underway. Two months ago — just
moments before allowing one of his many permit deadlines to
expire — Levy revealed that he’d finally obtained financing from an
outfit called Mountain Funding, which specializes
in extending short-term, high-interest loans to developers in
distress. It may as well be called “Bank of the Short Hairs,”
because that’s typically the anatomical region by which Mountain
Funding exercises its grasp.

But two weeks ago, on July 22, Mountain Funding entered a notice
of default against Levy for his beachfront pipe dream. The legal
document declares that unless Levy pays $35 million within 11 days,
he’s in default and the project is theirs. Given that the project
is officially DOA if construction does not
commence by December 12 — no more extensions are possible — this
news could be kind of a bombshell. As Levy is not returning phone
calls and folks from Mountain Funding have declined to comment, I
don’t pretend to understand exactly what this means. But the
legions of trained Levy watchers contend it’s a kamikaze game of
high-stakes chicken between Levy and Mountain for
control and how much Levy makes on the deal. Conventional wisdom
suggests that the costs of the project have risen perilously close
to the $250 million Ritz Carlton had pledged to pay for it. That
means there won’t be much, if anything, left over for Levy or his
many and much-abused investors. Given that Levy’s been working on
this deal for roughly 15 years, you can imagine this might not sit
well for the former Boy Wonder of high-rolling
finance. One school of thought holds that by precipitating a
default action, Levy — always the consummate bluffer — has
initiated a legal conflict that could entangle the project well
past the December 12 deadline. If that came to pass, Mountain
Funding’s position in the deal would be worth precisely zero. By
keeping his finger on the self-destruct button, Levy hopes to
negotiate a deal that will enable him to ride off into a golden
sunset. The other school of thought holds that Levy — having burned
so many people over the course of his career — has simply run out
of wiggle room and his comet is about to crash and burn. Should
Humpty Dumpty finally fall, City Hall will find
itself in a mad scramble to reassemble the giant egg. As for
myself, when that happens I expect to be eating omelets for some
time to come. But I won’t be getting any of my recipes from the
pages of the News-Press.

— Nick Welsh


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