Kim Cranston Los Altos – city wastes $93K commission on Morrisgate

Written by lalahpolitico

In the City of Los Altos Morrisgate coverup, Kim Cranston says he uncovered that the city spent $93,000 on a realtor commission, even though the original RFP prohibited such a commission. You can read in full the update on the lawsuit — Kim Cranston Los Altos vs. City of Los Altos, a request for a memo under the California Open Records Act– as written by Mr. Cranston himself.

Cranston v. City of Los Altos – update +

By Kim Cranston


The City of Los Altos has spent at least* $30,000 so far attempting to prevent the public from seeing a public record evidencing that city staff misled the city when it approved the option agreement with the Jeffrey A. Morris Group to purchase the city-owned property at First and Main.  On May 8, I filed a legal action against the city of Los Altos for violating the California Public Records Act by refusing to release a February 2010 memorandum from the city’s then-economic development coordinator, Anne Stedler, to then-City Manager Doug Schmitz and Assistant City Manager James Walgren that I believe shows City Walgren misled the city by claiming the city was open to proposals from other developers when city staff actually prevented other developers from submitting proposals for the property.  (Walgren also misled the city when he said the Morris Group submitted its proposal for the property in response to a 2008 Request for Proposals (RFP). Contrary to the RFP, which prohibited brokers’ commissions, the Morris Group’s proposal and its option agreement with the city include a requirement that the city pay a $93,000 brokers’ commission. In addition, the Morris Group’s letter of intent was submitted more than a year after the RFP deadline.)


As a result of my legal action, the City has acknowledged that:

  • The memo exists.
  • There was “a new development proposal regarding the First and Main Property” from a different developer, apparently in February 2010 (I now know of three developers the City effectively prevented from submitting proposals), and
  • Morris did not submit his proposal in response to the 2008 Request for Proposals.


I’m not seeking a monetary judgment, just release of the public document that proves the city was misled. My attorney, Dennis Winston, is President of Californians Aware, a potent force in preserving and enhancing the rights of Californians to have an open and transparent government. Winston agreed to take this case on a contingency basis and will only receive attorney’s fees when we win (the City will pay pursuant to the California Public Records Act).


The City’s legal fees include $25,697 for a “Peer Review of Disposal of Los Altos ‘First and Main’ Property” that concluded the City could dispose of the property in any way it chose if the City could “make findings the disposal will benefit the citizenry.” The City apparently sought this “Peer Review” in the mistaken belief I questioned the legality of the deal with Morris.  I did not; I know governments can be misled into making bad decisions that cannot be overturned.  I filed my legal action to expose how the City was misled into making this bad decision that may have cost the City millions of dollars.
My review of the City’s legal bills shows it also incurred:


Over $20,000 in legal fees for the sale of First and Main to Morris, When added to the $93,000 in brokers’ commissions, the city will net less than $3 million of the $3.1 million purchase price paid by Morris.


Up to* $1,740 in attorneys fees related to Councilman Ron Packard’s June of 2012 threat to sue the city and his fellow councilmembers (Packard got caught trying to mislead a newspaper reporter covering the story into believing it wasn’t his attorney who made the threat).


Some unidentifiable* amount for an opinion Councilmembers, e.g., Ron Packard, can run for City Council again after serving two consecutive terms, which was received by the Council September 25.


I hope the next council will seek to restore trust and increase transparency and accountability in City Government. I believe that is a recipe for good government and reducing legal expenses.


* On October 2, 2012 I submitted a Public Records Request for “all bills and statements for legal services performed for the City of Los Altos in the last three years,” but was only provided statements for services through June 30.  There are certainly additional costs for most, if not all, of these matters since June 30, and the City’s legal statements do not always identify specific matters to which they relate so unidentified costs are not included in these amounts.


About the author


Norma Schroder is an economics & market researcher by trade and ardent independent journalist, photographer and videographer by avocation. Enthralled by the growth of the tech industry over the decades, she became fascinated with the business of local politics only in the past couple of years.