Contested development

Former city council member launches ballot measure to reverse city council’s K Street subsidy deal

Former City Councilman Josh Pane (center), along with son Evan Pane (left) and Matt Mohammed are launching a ballot initiative to stop public subsidies for a mermaid bar and other nightclubs on K Street.

Former City Councilman Josh Pane (center), along with son Evan Pane (left) and Matt Mohammed are launching a ballot initiative to stop public subsidies for a mermaid bar and other nightclubs on K Street.

Photo by anne stokes

The city may have to scrap plans to build a mermaid bar and other controversial nightclubs on K Street after all.

Josh Pane, a former member of the Sacramento City Council, is mounting a campaign to stop the project at the ballot box. He is collecting signatures for a ballot initiative that would repeal the city council’s decision to spend nearly $6 million to build several new nightclubs on K Street, including a mermaid bar, an “adult pizza” joint and an over-30 club called “Frisky Rhythm” (see “Frisky business,” SN&R Bites, February 26).

Pane called the subsidy a misuse of public money. “I’m serious about it, and a lot of people in the neighborhoods of Sacramento are serious about it,” he told SN&R.

At press time, Pane’s lawyer was looking over the proposed referendum. He said the next step would be the printer. Pane hoped to have the petition on the streets this week.

The $6 million subsidy came from a special fund set aside to support redevelopment projects by local developer David Taylor. Taylor bought the Sheraton Grand Hotel from the city last year, on the condition that $25 million of the purchase price be set aside by the city for him to use on future developments.

But many local business people complained that the subsidy would give an unfair competitive advantage to one business while driving other restaurants and bars out of business. Despite the outcry, the council voted unanimously on March 10 to go ahead and give the money to Taylor and his partner, San Francisco nightclub operator George Karpaty. The $6 million doesn’t count the value of the land and existing buildings the city is also giving those to Taylor and Karpaty as well.

“You’ve got to count on the citizens when you’ve got so much money against you,” said Pane, who served on the city council from 1989 to 1994. He said his referendum follows the tradition of progressives in the early 20th century, who created the initiative process to battle the railroad companies and special interests. “An octopus has a hold on the city and on the city council,” Pane explained—the octopus being the influential Taylor.

But reversing the council’s action is going to be extremely difficult.

In order to qualify the measure for the ballot, Pane and his supporters would have to come up with the signatures of 10 percent of registered voters in the city of Sacramento. That’s about 22,000 names, according to Sacramento City Clerk Shirley Concolino. But Pane will have to gather more than 22,000 signatures, because a big chunk of those signatures will turn out to be invalid. By law, he only has until April 9 to do it, 30 days from when the council made its decision to subsidize Taylor’s development.

Once the campaign has enough valid signatures, the city council has a choice: It can go ahead and reverse its earlier decision or it can decide to put the referendum on the ballot.

Pane said he’s been trying to drum up support among neighborhood organizations and local businesses, but at this point he isn’t sure how he’s going to fund the signature drive and a possible ballot campaign. “We’re going to start our effort and do the best we can.”

As a former city councilman and professional lobbyist, Pane knows the ropes. His firm, Pane & Pane Associates, which he owns with his wife, Donna, has represented several American Indian tribes, as well as the California Bus Association. He told SN&R that the referendum has nothing to do with his lobbying work and that he is not being paid for his efforts. This isn’t the first time he’s used the ballot initiative to overturn policies he didn’t like.

In 1992, while still on the city council, Pane led the successful effort to overturn a council decision to modernize the Memorial Auditorium with stadium seating and a new sound system. Pane, along with neighborhood groups and the Sacramento Old City Association, scrambled to put Measure H on the ballot, which was narrowly passed by voters. It nullified the council’s action and required the city to fund improvements but keep the auditorium’s original layout.

Pane had hoped to parlay the Memorial Auditorium campaign into a successful bid for the mayor’s office, but fellow Councilman Joe Serna Jr. grabbed 52 percent of the vote, easily beating Pane and businessman Ross Relles. His involvement in the K Street controversy doesn’t come as a surprise to those who know him.

“My first reaction was that Josh wants to get back in the political game,” said Richard Lewis, executive producer of the California Musical Theatre and the Cosmopolitan Cabaret, which opened last year near the site of the proposed project. Lewis is a strong supporter of the K Street project. “My feeling is that is it will absolutely benefit my operation.” Asked if he thought Pane would be successful with his signature drive, Lewis replied, “I certainly hope not. I really want to see this project done by the end of calendar ’09.”

City Councilman Rob Fong, who voted in support of the project said, “The general sense I’ve gotten is that people want us to take some positive action on K Street.” He faulted Pane for not speaking up before now. “He was never involved in any of the discussion we had about this at council,” Fong said.

But Jim Seyman, who owns the Tower Cafe on Broadway, did voice his opposition to the project to the council. He’s supporting the referendum, but understands the chances of success aren’t high. “The likelihood of getting 20,000 [signatures] in a month is pretty slim,” he said. “The only reason to take a stab at it is because it’s just so egregious.”

While Pane hopes to get support from restaurants and other local businesses, some of those who were most vocally opposed to the project before the council made its decision may find it difficult to support the referendum now.

“We don’t have a position on it,” said Rob Kerth, executive director of the Midtown Business Association. The association and several restaurant owners agreed to a compromise with the city that included restrictions on the size of any nightclub built with the subsidy, as well as more funds for marketing Midtown. “We shook hands and said we we’d work together. That’s where we are.”

Kerth said that the MBA has nothing to do with Pane’s signature drive. But he added that given his track record, Pane might be successful.

“If he sets his mind to it, he’s very capable of delivering it,” Kerth said. “This is definitely something people are not happy about. He’s tapped into a real vein of discontent. If it gets onto the ballot, that project is a goner.”