MOORLACH UPDATE — Black Star Canyon — July 19, 2011

The OC Register printed its piece on Black Star Canyon opening to the public on July 23rd.  Please feel welcome to attend.  No sign ups are required and there are no party size limits.  Just put on your walking shoes, bring a bottle of water, a hat, and some sunscreen.  Drive on Santiago Boulevard until you hit Black Star Canyon, go north and veer to the left for the trailhead.  You’ll have a choice of hikes.  If you have no specific plans for Saturday morning and want to enjoy the County’s natural resources, this is a must opportunity.

The second piece is this month’s lead story for the OC METRO.  The Orange County Chamber of Commerce contributed the maximum amount possible to Robert Citron in 1994.  As you can imagine, I was not a fan of this chamber or of its new iteration as the OCBC (the Orange County Bureaucratic Council, as I used to refer to it).  In recent years, under the direction of Lucy Dunn, the OCBC (the Orange County Business Council) has morphed into a dynamic and powerful organization.  It has its fans and, with successes, some detractors.  I’ve appreciated the organization during my time as a County Supervisor.  As to the article, the OCBC and I are on the same page:  this is a wonderful county, it’s just too bad our host state is in shambles and an international embarrassment.  Better to light candles than to curse the darkness. 

The LOOK BACK provides for celebration as this is the tenth anniversary of the conclusion of my wild ride during the infamous energy crisis of 2001.


O.C.’s ‘Red Rocks’ will open to public

The ‘Red Rocks’ section of Black Star Canyon that is usually closed to all but guided tours will be opened to the public July 23.


The ‘Red Rocks’ section of Black Star Canyon that is usually closed to all but guided tours will be opened to the public July 23.

OC Parks officials announced Wednesday that hikers and bikers will be permitted to explore Red Rocks — known for its sandstone cliffs, stunning views of Irvine Lake and the Santa Ana Mountains, and native scrub habitat with abundant wildlife — with no guide required.


The ‘Red Rocks’ section of Black Star Canyon that is usually closed to all but guided tours will be opened to the public July 23. OC Parks officials announced that hikers and bikers will be permitted to explore Red Rocks — known for its sandstone cliffs, stunning views of Irvine Lake and the Santa Ana Mountains, and native scrub habitat with abundant wildlife — with no guide required.


But guided tours by naturalists also will be available.

It is part of a 20,000-acre expanse of rugged canyons and native landscape donated to OC Parks by the Irvine Co.

The first-ever day of unguided access is meant to celebrate the year anniversary of the donation.

The area also will eventually become part of a brand-new county park, Black Star Canyon Wilderness Park, that will span about 2,000 acres. For now, tours will remain docent-led after July 23.

Access is from 8:30 a.m. to 1 p.m., with speeches expected by Orange County Supervisor Chairman Bill Campbell and Vice-chairman John Moorlach starting at 9 a.m.

"In the backdrop of where in the event is going to be held, you’ll be able to see the prominent sandstone formations of the Red Rocks," said OC Parks Division Manager John Gannaway.

The event also will include information booths with live birds of prey on display.

The event and parking on Black Star Canyon Road are free.


O.C.’s not-so-secret weapon

How the Orange County Business Council and CEO Lucy Dunn have become O.C.’s (maybe California’s) most powerful economic voice


Lucy Dunn has done the math, and things just don’t add up. The population, the jobs, the will to grow and expand and the sheer economic might all tilt in favor of Southern California. But the fact is that every major statewide elected official, including the governor, hails from Northern California.

“What’s wrong with this picture?” asks Dunn, her trademark smile punctuating the moment. “Maybe, just maybe, we should be our own state.” The possibility hangs in the air, but not for long. Within seconds, she’s marching on to the next topic with her mission front and center: business first.

Dunn, who is equally commanding and comfortable with governors and shopkeepers, is the first lady of business in Orange County. She’s the president and CEO of the Orange County Business Council (OCBC) and, as such, she carries the burden of selling the county’s virtues as the economic engine driving the Golden State’s recovery and leading an organization that is a national model for business development and retention.

Dunn is the business council’s point person, the top gun of a nonprofit that has few peers in California when it comes to championing initiatives to protect business interests and fostering a climate for economic expansion. At a time when California ranks near the bottom in multiple indices measuring the state’s friendliness toward business, Orange County is a sharp departure. In terms of creating new jobs, the county is first in the state and third nationally among the 35 largest metropolitan areas. When it comes to infrastructure – roads, mass transit and utilities – the county excels at planning and execution. Diversity in terms of industry and ethnicity are strengths, not obstacles.  And education, a key to economic development, has been a magnet for attracting business owners and skilled labor to set up shop in this 798-square mile county sandwiched between two better-known neighbors, Los Angeles and San Diego.

Orange County’s spreading reputation as an economic destination where innovation and capital meet is the result of many factors and individuals.  But increasingly, and with a frequency that is hard to ignore, the OCBC has been at the intersection of business success in Orange County, especially during Dunn’s nearly six years at the group’s helm. In fact, the OCBC’s influence and importance as the county’s “voice of business” clearly widened as the recent recession deepened. Arguably the worst economic downturn since the Great Depression, the recession has created an opportunity for Dunn’s 11-member staff to shore up and advance the county’s position as a pro-business oasis in a state where it seems owning a business is a curse, not an opportunity.

“We live in a totally great county where nothing rhymes with Orange – we do things differently here,” says Dunn, whose reputation stretches from Santa Ana to Silicon Valley and the governor’s office in Sacramento. “There are other countywide organizations in other parts of the state that we partner with, but our model is rather unique.”  Thomas Phelps, a partner in the Costa Mesa based law firm of Manatt, Phelps & Phillips, and a longtime OCBC board member, is even more emphatic about the OCBC’s place in the business landscape. He claims the group “has become simply the most influential voice of business for O.C. and the region on federal, state and regional public policy issues. It is bipartisan, strategic and well informed, and is focused on issues that are critical to business, not social issues or partisanship.”

Will Kempton, chief executive officer of the powerful Orange County Transportation Authority and former head of the California Department of Transportation, agrees: “The OCBC has played a key role in sustaining a reasonable level of economic development in a very serious downturn economically.”

It is high praise for an organization that is less than two decades old.  Although the business council is an offshoot of the 118-year-old Orange County Chamber of Commerce, this is not your grandfather’s chamber that meets primarily to network.

Formed in 1995 with the merger of three groups – the county chamber, the Industrial League and Partnership 2010 – the OCBC has emerged as the leading voice in Orange County on issues of business regulation, taxation and legislation. The consistency and effectiveness of the group in shielding business interests in recent years has clearly elevated its profile – regionally and statewide. Today it’s almost automatic for Dunn and her team of researchers, policy experts and economic-development specialists to have a seat at the negotiating table when it comes to major initiatives in the region.

“She carries a big bat in this state,” says Curt Pringle, former Anaheim mayor and speaker of the state Assembly. “She isn’t hesitant to step into a fight or speak her mind.”

Several years ago, Anaheim officials turned to the OCBC to help lure the National Football League to its city. Though Anaheim’s bid for a franchise and a new football-only venue next to Angel Stadium fell short, the OCBC’s advocacy work scored big points with local officials and the NFL commissioner’s office, signaling another milestone in the group’s rise. It’s one reason Dunn’s phone rings almost daily with calls from public and private sector leaders seeking advice and guidance on key economic proposals and speed bumps. In recent months, the OCBC has been credited with

playing a pivotal role in keeping nearly 2,000 jobs in Lake Forest and Irvine, including 900 high paying semiconductor positions.

“We were spoiled in this county when unemployment was 3 percent,” says Dunn, an attorney by education who has worked in both the private and public sectors. “We didn’t have to work at job creation or business retention. Our weather, roads and quality of life sold the county for us. But that’s not the case now. We have to battle for every job every single day, whether we are creating new ones or fighting to keep existing ones. It’s serious stuff.”

The creation of “red teams” by the OCBC to engage companies weighing opportunities to move operations outside of Orange County has been one of the group’s biggest achievements, says current OCBC Board chairman and UPS executive Eddie Northen. “These efforts are one reason O.C. has the

lowest unemployment in the state,” Dunn says.

A big part of the challenges facing Dunn and the OCBC are beyond her control. They rest with California itself and its worsening reputation as an address to do business. The state is viewed by many C-level executives as the “land of disincentives” when it comes to operating or starting a business.

To balance its teetering budget and finance its runaway public employee pension system, among other problems, California lawmakers in recent years have adopted more taxes than the Sheriff of Nottingham in medieval England. But rather than stay and pay, many companies have left the state or are seriously romancing relocating to other zip codes with far more favorable business climates. Add some of the strictest environmental laws in the nation to the toxic mix of taxes and budget woes, and California is failing in its effort to paint a promising picture for future economic investment and expansion. Try as it might, Orange County can’t escape being swept up in the tide of negative worldwide press about California’s business environment.

“On its own, Orange County is creating opportunity, jobs and embracing business,” Pringle says.  “But it is the state that is dragging us down.”

Attorney Michael Hornak, a partner at Rutan & Tucker and co-chair of the OCBC’s Advocacy and Government Affairs Committee, says California must look in the mirror. “Businesses just don’t view California as a place to grow,” says Hornak, who has traveled with OCBC delegations to both Sacramento and Washington, D.C., to lobby on behalf of O.C. and California business. “California ranks at the bottom, or near the bottom, as the best place to do business. This has to change.”

Enter the OCBC and Lucy Dunn. It is this backdrop of business unrest and uncertainty that has opened the door for Dunn & Co. to emerge as the county’s most formidable weapon in its push to compete for new business – not just in California or the nation, but globally. During the past five months, Dunn and her staff have hosted 13 delegations of Chinese business leaders who have toured major Orange County companies and landmarks. On another front, the business council is reinforcing efforts by Santa Ana officials to help permanently relocate Chivas, a Major League Soccer franchise, from Carson (just up the 405 Freeway) to the county seat, and with it a worldwide base of 45 million fans, particularly south of the border in Mexico and Latin America. The marketing exposure for Orange County, some speculate, could be enormous.

“We will be the Orange County welcome wagon,” Dunn proclaims, her mind racing as she ponders the possibilities. “We get lots of inquiries from the Pacific Rim, France, Turkey, Dubai. We’ve hosted international delegations interested in investing in Orange County; there is a very strong global market here.”

Dunn’s road map to rebuilding the region’s economy and boosting Orange County’s own business fortunes is not a one-way street ending at the OCBC’s Irvine headquarters. She is clearly constructing a superhighway that is carrying the group’s influence well beyond the county line. Her keen

sense of collaboration and rich resume of public service on the state level has led her to form ties with some of the most powerful business development organizations throughout the state, including the Silicon Valley Leadership Group. Together, Dunn and others crusading on behalf of business have won passage or key endorsements for legislation on education reform, water policy and public-private partnerships, all in the name of jump-starting California’s stalled economic outlook.

Closer to home, Dunn and her team helped land $457 million in state transportation funds for O.C. last year and saving taxpayers $20 million in 2009 by proposing a faster timeline adopted by local transit officials for construction on the 91 Freeway.

“Am I bullish on California?” she asks. “Absolutely. I have to be. I have to be a cheerleader.  There is no choice. Look at California as a whole, with 2 million people out of work and how many hundreds of thousands more who are underemployed or who have just given up looking for a job. I believe with all my heart that Orange County is the economic heartbeat of California. But to be successful we need California to get better.”

Dunn, who sharpened her executive skill sets by working for two decades in the region’s rough-and-tumble real estate industry in the 1980s and ’90s, knows California’s economy will not heal overnight.

“I’m a realist and understand there is more trouble ahead,” she concedes. “But you have to push and strive every day to try and effect change.  We have young people to care for and such great opportunities for success for future generations.  I just want to make a difference here in Orange County and in this state. That’s my job.”

Dunn, who was named CEO of OCBC in 2005 and then named director of the California Department of Housing and Community Development by Gov. Arnold Schwarzenegger in 2008, is not working alone on this mission.

In fact, many suggest that the OCBC’s success is the result of what Dunn calls her “rock star” board of directors. The business council has 250 members, or “investors,” and an annual operating budget of $3 million. But it is the 50-member board, a who’s who of corporate Orange County, that gives the OCBC an enviable advantage in tackling issues and moving pro-business policies. Current board members include The Irvine Co., AT&T, Kaiser Permanente, UPS, Toshiba America Information Systems, Cox, Lennar Homes, Wells Fargo, The Disneyland Resort, Allergan, Bank of America, Chevron, Goodwill Orange County, Porter Novelli and Experian.

“The OCBC is really the story of Orange County,” says Dr. Wallace Walrod, the group’s vice president of economic development and research, and a staff member almost since the OCBC was formed in the mid ’90s. “We have companies here for the long term. They can’t pick up and move. They are vested here. They not only want to shape the landscape today, they have an enlightened self interest in what Orange County will look like in 50 years. So they are willing to think big. It’s one of the problems we have elsewhere in the state. There are not enough long term thinkers, particularly in Sacramento.”

Kate Klimow, a colleague of Walrod’s and vice president of government and community affairs, agrees that the OCBC’s success is a reflection of Orange County’s emergence as a major economic center. “Our business community has an appreciation of where we have been and, most importantly, what it takes to stay relevant and competitive.  This is a community of entrepreneurs, whether it’s Broadcom, First American or the surf industry.  We are surrounded by innovators, and we simply reflect that spirit here at the business council. We want to protect this unique market.”

Dunn is a renowned vocalist in her private life (she calls it her other job), and it has been her ability to dance around being tagged with a partisan label that has been her most impressive performance. It would be easy in a community like this, with deep conservative Republican roots, to play to the majority for resources and support. But Dunn has avoided the political pothole so far and remained true to her “business first” marching orders.

“We are not pro-Democrat or pro-Republican.  We are pro-business,” Dunn asserts with a steely authority. “Our initiatives transcend political parties. Tell me: Who is against state-of-the-art infrastructure? Who is against a student graduating from high school with a high-tech education?  Who is against affordable housing for their work force? These are issues that cut across all political boundaries. Business owners, unions, government … everyone should be pro-business, because when business thrives everyone shares in the results.”

It is the OCBC’s focus on stakeholders and their issues that excites members such as Kaiser Permanente’s John Stratman. Stratman, director of public affairs, says the business council is about more than just improving the bottom line. Many of Kaiser’s 7,200 employees in Orange County live  outside the county and commute to work. Traffic, safety and road quality are major issues for Kaiser’s work force.  “We spend a lot of time talking about how to get our employees to and from work,” he says. “The OCBC is also worried about transportation. It’s why this organization is different and why we support it.”

Infrastructure, educating the work force, creating more affordable housing and economic development are the four key initiatives that Dunn’s team promotes and monitors. As part of the OCBC’s annual strategic plan, the group helps publish several annual research projects, the Community Indicators Report and the Workforce Housing Scorecard. The OCBC has also taken a leadership role in preaching the importance of education in Latino neighborhoods, particularly with parents, through its Latino Education Attainment (LEA) committee.  Not everyone has always been enamored with the business council and its operations. Orange County Supervisor John Moorlach recalls the OCBC as “too bureaucratic” when it first launched, and he questioned “the necessity of its existence.”  But he says Dunn’s arrival as CEO invigorated the organization, and he praises the group for walking “side-by-side” with county government as it has wrestled with the recession and budget cuts.

Clearly, Dunn has galvanized the organization and has set a course that has raised eyebrows and moved the business needle across the region. The reason, says longtime friend and former mayor of Costa Mesa Peter Buffa, is her personality. 

“I use words like ‘brilliant’ and ‘visionary’ as sparingly as possible,” he says. “But with Lucy, you will quickly run out of words if you don’t. She has a remarkable talent for striding into the middle of problems and issues that would send most people running for cover – and coming up with solutions that nobody else can imagine, let alone do.” Ocm

Steve Churm is publisher of OC METRO and CEO of Churm Media; Tori Richards is a Huntington Beachbased freelance writer who has written for the NY Times, Reuters, Bloomberg and the NY Post.

July 19


July 18 was the big date.  The media and others had made so much of the Edison International note purchase in the County’s portfolio.  Just like I had stated would occur from the get go, Edison paid its note on time and with full interest.  Front page news, right?  Wrong.  You’ve got to love a media that senses a little hint of blood in the water.  When the media is wrong or overzealous, you don’t hear much contriteness.  There were small articles in the LA Times and the OC Register with the titles “Second Edison Investment Ends” and “Edison pays off $20 million note” (by Chris Reed), respectively.  However, Dennis McLellan of the LA Times did do a nice B3 piece with “County’s Second $20-Million Note Paid by Edison – Finance:  Treasurer John M. W. Moorlach, who was criticized for investment of school money in shaky utility, is vindicated.”  Here it is in full.

The second of Orange County’s two $20-million Edison International investments was paid in full Wednesday, ending what county Treasurer John M.W. Moorlach called six months of "crisis management."

Moorlach, who was criticized by some earlier this year for investing $40 million in school money in the utility despite the state’s worsening energy crisis, said that all principal and interest payments were made according to schedule.

"This is one of those things where we said throughout that we’d be paid, and today Edison has paid us our principal in full," he said. "We executed our strategy, and we succeeded."

Moorlach said the $20-million medium-term note, which was purchased last September, earned $951,000 in interest for the county and school districts.

The other $20-million investment in Edison International, which was purchased in December, matured Jan. 31 and earned $210,834 in interest.

As a result of the full payment of principal and interest on the two investments, Moorlach said, the credit rating of the Orange County Educational Pool has been returned to AAA/V1+, the highest rating possible.

The rating agency Fitch Inc. had downgraded the investment pool from AAA to AA because of the Edison investment; about the same time, Southern California Edison’s credit rating fell to junk-bond status.

Southern California Edison is a subsidiary of Edison International.

Steve Lee, a Fitch analyst in New York, said payoff of the final $20-million note "is definitely good news for the pool participants and for the treasurer. From our standpoint credit-wise, the pool is right back where it was before the downgrade of Edison."

The county’s $40-million investment in Edison International represented 3.3% of about $1.1 billion in the county’s educational investment pool, which holds excess operating cash for every school district in the county. Interest earnings–about $80 million a year–fund a variety of school programs.

Moorlach’s office invested the first $20 million last September, three weeks after the credit-rating firm issued a warning about growing risks in the California utility market.

However, when both investments were purchased, they were rated at the highest possible levels by the various rating agencies, said Brett Barbre, spokesman for the county treasurer’s office.

The rating agency downgraded Southern California Edison notes on Dec. 11–four days after the county made the second $20-million investment in Edison International.

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