Paso Robles councilman accused of using position for profit

May 30, 2016

By JOSH FRIEDMAN

Paso Robles Councilman John Hamon is accused of violating conflict of interest rules because he participates in government decisions that allegedly impact his business interests and income. Hamon is currently running against three other candidates for the San Luis Obispo County District 1 supervisor seat.

Hamon leases property from Paso Robles at the airport industrial park and subleases some of it at much higher rates, earning him a yearly return of at least tens of thousands of dollars. Simultaneously, Hamon participates in government decisions on the airport and advocates against allowing new business into the industrial park, creating an alleged financial conflict of interest.

City officials have warned Hamon about the conflict of interest, but the councilman has continued to vote on matters relating to the airport, doing so as recently as Thursday when Hamon argued against expansion and new leases at the airport industrial park.

Critics say Hamon does not want investors to obtain new land leases where they could construct new industrial rental properties. New leaseholders could lure tenants away from Hamon’s old, aluminum structures.

In October 1979, Hamon signed a 50-year lease for four parcels at the airport industrial park, totaling 4.72 acres.

Shortly later, Hamon constructed multiple aluminum buildings on the city-owned lots. He leases out some of the space to manufacturing and industrial businesses. Hamon also operates his own business, Hamon Overhead Door, from his industrial park.

The original lease Hamon signed set the rent he pays the city at $1,048 a month with possible increases in rates not to exceed 8 percent per year. At a current rate of 1.5 cents a square foot, Hamon’s monthly lease runs approximately $2,450.

Hamon currently subleases some of the property for about 40 cents a square foot.

Last year, Hamon served on a city committee that selected consulting firm Airport Business Solutions to analyze the city’s leasing policy and rent rate structure. Then, as a member of the city council, Hamon made the motion and voted to hire Airport Business Solutions to conduct the analysis.

On his Statement of Economic Interests, known as a Form 700, Hamon stated that he receives $10,001 to $100,000 in rental income from property at the airport industrial park. The disclosure also states four businesses located at the industrial park each pay Hamon at least $10,000 a year in rent.

According to California’s conflict of interest code, if a public official has a real property interest of $2,000 or more, including leaseholds, the official cannot use or attempt to use his position to influence a government decision that could have a financial impact on his real estate interests. When an official has a financial interest in a government decision, he is required to recuse himself from the matter.

However, Hamon regularly participates in city council votes on matters relating to the airport. He also serves as the council liaison to the city’s airport advisory committee.

Paso Robles Councilman Jim Reed said Hamon’s actions create a clear conflict of interest.

“If you look at his 700 form, and what constitutes a conflict of interest, Mr. Hamon is right there,” Reed said. “How can he say he doesn’t have a conflict of interest?”

Reed said he informed City Manager Tom Frutchey, who notified City Attorney Iris Yang. Reed did not receive a response from them, he said. However, since then, Yang has asked Hamon to recuse himself during some discussions regarding the airport.

Cody Ferguson, a resident of the area since 1947, questions why Hamon participated in the discussion Thursday, including a discussion about opening up further land leases, when Yang has told him not to vote on airport issues and to leave the room during discussions about them.

“He should not be participating,” Ferguson said. “He has a huge conflict of interest.”

Hamon did not respond to request for comment.

On Thursday, Paso Robles officials held a joint meeting of the city council and airport advisory committee. In addition to arguing against the issuance of new leases at the industrial park, Hamon took part in a vote on a plan to transform the airport advisory committee into an airport commission. The change would give more power to the airport body, making it operate in a similar fashion to a city planning commission.

During the council discussion, Hamon argued against the creation of an airport commission. Critics say Hamon uses his position as council liaison to the airport advisory committee in order to lobby for his personal business interests.

When the other four council members said they supported the idea of an airport commission, Hamon changed his stance and opted to vote with his colleagues. The proposal to create an airport commission passed on a 5-0 vote.

Yang said the vote did not constitute a conflict of interest because it would not have a material effect on any financial interest that Hamon has.

Earlier this year, Hamon was accused of a separate conflict of interest involving his door company and his position on the San Luis Obispo County Air Pollution Control District (APCD) board. Since 2013, Hamon has cast several votes in favor of requiring state parks to implement the APCD’s Oceano Dunes dust rule.

While Hamon was casting votes on the regulation, Hamon Overhead Door received a contract for a door installation that was part of a project state parks needed to complete in order to comply with the dust rule. The contract called for Hamon Overhead Door to receive at least $18,699.

Kevin Rice, a critic of the APCD, spoke at an air district meeting in January and requested that Hamon refrain from voting on matters pertaining to the dust rule.

“You cannot vote for regulations and then make money on the back end from what you’re voting on,” Rice said.

However, APCD legal counsel Ray Biering defended Hamon, who voted on the dust rule matter minutes later.

Hamon is currently in a four-way race for the District 1 county supervisor seat that is being vacated by Supervisor Frank Mecham. The other three challengers in the race are attorney Dale Gustin, Paso Robles Mayor Steve Martin and businessman John Peschong.

If one of the candidates receives 50 percent or more of the vote in the primary, the race will end on June 7. If no candidate gets a majority of the vote, the race will move on to a November runoff.