Photo by Jim Coit

John Davies

This is a story about John Garfield Davies, a wealthy and influential man known vaguely, if at all, by the public. It is also a story about some of his friends, one a powerful land developer and another the mayor of San Diego. Hard work, diligence, enterprise, and connections all play a role here. In combination, they tell a mostly private saga of the accumulation of great wealth and quiet power. It is perhaps not that uncommon a story, as many men have become rich during the last twenty- five years of San Diego’s remarkable growth. But it differs from the rest, in pan, because John Davies is the chairman of the city planning commission, and in that role he has taken a major pan in molding the future shape of the city. As such, he has been faced with the dilemma of avoiding a clash between his personal financial interests and his service to the city.

John Davies was bom forty-seven years ago in Chula Vista, into a family whose patriarch was Lowell Davies, the successful attorney who, as president of the Old Globe Theatre for twenty-nine years (1947 through 1976), helped to build it into the renowned establishment it has become today. The Davies family was comfortable, to be sure, but John and his brother and two sisters were taught to work and instilled with a fierce drive to succeed.

During his years at Chula Vista High School, John worked on the irrigation of his family’s lemon groves; in college at USC he fastened himself to his academic work, enrolled in the NROTC program, and worked as a “hasher” for a sorority. After graduation from USC in 1956, he served his required three years as a Navy officer, and he won a coveted place at Boalt Hall, the University of California’s law school in Berkeley. He did not disappoint: he graduated third in his class. He went on to a clerkship with state Supreme Court Justice Roger Traynor and then returned to San Diego to practice law in 1962.

That same year Davies was joined in San Diego by a fellow Boalt classmate. His name was Pete Wilson, and he had been an undergraduate at Yale and had similarly paid off his obligation to NROTC before entering law school. The two of them had been friends at Boalt, partied together, endured the exams, downed gallons of bitter black coffee, staying awake night after night. “Law school is like hell week,” Davies remembers. “You get to know people in a hurry because you’re with each other and you're under duress together for an extended period.” Wilson went into practice for himself in San Diego in 1962 and did volunteer work as an advance man for Richard Nixon, who was running for governor that year. Lowell Davies told the young Wilson that there was no better place than San Diego for an ambitious, upwardly mobile Republican.

Christopher D. Sickels was bom in 1938 in Mercy Hospital. He grew up in an old wooden bungalow in Normal Heights, a working-class neighborhood. His father, a policeman, and his mother, a schoolteacher, were divorced when their son was twelve, and from then on, Sickels says, he was on his own, earning money with odd jobs, including a paper route. But none of it interfered with his school work, and he aspired to great things, although he didn’t quite yet know what they would be. After Hoover High, he went to San Diego State College and studied to become a teacher. His first assignment after college was in the State College area, working with a class of emotionally disturbed but smart elementary school children with average IQs of 148.

The psychiatrist who worked with the children Sickels was teaching was a man named John Robuck. He and Sickels got along well inside and outside of the classroom, and soon they were talking about things other than education. Robuck wanted to build a psychiatric nursing home in Alpine; he had some of the money necessary, and the idea, but he needed somebody to put together the business deals and run the operation. Sickels had been getting interested in real estate, reading up on how basic real estate transactions were made, looking around him at the potential for growth that San Diego in 1960 seemed to hold. “All I knew at that time was that real estate seemed to be an exciting place to go,” Sickels says. “I was curious about it, and I think [Robuck] probably fed that curiosity.”

Sickels’ career with the San Diego City Schools system lasted three years. Then Robuck agreed to advance him enough money to live on while Sickels oversaw the development of the nursing home. The former teacher wasn’t on salary; he was a partner in the new venture, and he agreed to pay Robuck back for his advances as soon as the home was making money. “He took a chance on me,” Sickels says of his mentor. “I’m not sure now I would have backed somebody as green as I was then.’ ’ In 1964 the nursing home was finished, and some way had to be found to fill the ninety-nine beds of the Alpine Convalescent Center with patients. The task fell to Sickels, who launched into it with characteristic tenacity. It was in this pursuit that one day he walked through the enormous bronze doors of the San Diego Trust and Savings Bank on Sixth and Broadway.

“He was selling beds in a nursing home,” recalls John Davies, who maintained a law office in the San Diego Trust building. “He was just walking around, knocking on doors, making cold calls on offices, talking to lawyers and trust officers who might know people who needed a nursing home to go into or who knew people who had relatives who needed to go in, so he just walked into my office.” Sickels today can’t remember if his first contact with Davies yielded any new patients, but there was no question that the pair were friendly almost immediately. First only socially — a cocktail party, a dinner party — then as lawyer and client, and finally as business associates. Over the next fifteen years as Sickels embarked on other nursing home ventures and then branched into medical office buildings, the personal ties between Sickels and Davies grew stronger. In the early Seventies, they moved in next door to each other on Bayside Walk in South Mission Beach, an area known for its high-living singles. “That was my interim bachelorhood,’’ says Davies fondly of the time between his second and third marriages. ‘‘We had fun.”

Opportunities to do business together soon presented themselves. A hard- driving executive named Richard Cramer had set up a new company called Imed to manufacture an array of medical hardware, including intravenous infusion pumps which would soon replace traditional intravenous systems. Sickels knew Cramer and introduced him to Davies. Davies soon found himself on the board of Imed, and he invested heavily in the company, which turned out to be an extremely provident move. The gross sales of the privately held corporation soared from $241,000 in 1973 to $55 million in 1981. The three men also put together partnerships to lease some of the medical equipment produced by Imed, and it was Davies who handled the legal details.

Thanks to Sickels, Davies was doing more and more real estate work — the complex financial transactions required by the medical office buildings as well as investments in homes and condominiums (in Mission Beach, Point Loma, La Jolla, and Steamboat Springs, Colorado). Other young men joined in. Louis Wolfsheimer and developer Ted Odmark were partners with Sickels in buying the Sixth Avenue Medical Center in 1978; Davies acted as attorney in the deal. Attorney James Milch, a real estate specialist who had married Davies’ sister Estelle, was one of Sickels’ partners in the purchase of the Center City Building on Third and A streets downtown in mid-1977; the building was sold two years later for $3.3 million — three times what the Sickels partners had paid for it. Even Neil Morgan, the Tribune columnist and aspiring editor, came to Davies for help. Morgan and attorney David S. Casey, Sr. and their wives in the late 1970s wanted to develop industrial land on Clairemont Mesa Boulevard into what would become the Freeway Industrial Park; Davies was the logical choice to tie the deal together.

Before they knew it, Sickels and Davies discovered themselves in the midst of a new San Diego aristocracy — the young, bright beneficiaries of the real estate boom Sickels had so accurately prophesied. Another promising member of this circle was Pete Wilson, whose friendship with Davies and his family had grown even stronger over the years since Wilson arrived in San Diego. For a short time in 1964 and 1965, Wilson and Davies were actually law partners, working out of the same little offices on the seventh floor of the San Diego Trust building where Sickels had met Davies. But Wilson was more interested in politics than the practice of law, and events were moving in his favor. It never had been a better time for a young politician in San Diego.

The old order, the “downtown establishment,” was reluctantly giving up its power. Indictments in the Yellow Cab scandal were filed in October of 1970 against four city councilmen, as well as then-mayor Frank Curran. The end soon came for the United States National Bank — owned by “Mr. San Diego,” C. Arnholt Smith — and it ultimately collapsed in 1973.

In 1966 Wilson had run for the state assembly from what is now the Seventy- seventh Assembly District (presently held by Larry Stirling) — and won. He was twice re-elected to the assembly and after the Yellow Cab indictments shook city hall in 1970, he saw his chance. Supported by friends such as Davies, Wolfsheimer, and Sickels, Wilson swept into the mayor's office in November, 1971, a young Republican who pledged to clean up city government, revitalize downtown, and stamp out urban sprawl.

Throughout most of the Seventies, as Wilson accustomed himself to his role as mayor and then set out on his campaign for the governorship, Davies remained quietly in the background. Then, in February of 1979, Davies was appointed to the city planning commission, the seven-member board responsible for deciding how and by whom the city’s lucrative inventory of raw land will eventually be developed.

A year later, Wilson elevated Davies to the chairmanship of the commission to replace their mutual friend Louis Wolfsheimer. Davies turned out to be an extremely strong chairman, imposing stem limitations on the amount of time a given issue could be discussed.

At least one critic, a local architect who wishes anonymity, says Davies’ behavior as chairman is “officious. He’s just like Pete Wilson, allowing only ten minutes per item [on the agenda], making sure all the votes are unanimous — his way.” The architect argues that Davies, as a close Wilson friend, dominates the commission because its other members owe their appointments to the mayor, and they know that Davies is a Wilson confidante and thus privy to the mayor’s views. But for his part, Davies says he has on occasion talked with the mayor to get an idea of where Wilson stands on such land-use issues as urban growth and downtown redevelopment. “It’s a natural and proper thing to do,” Davies says. “Pete was elected with a great deal of support from the people, and he represents them.” But the commissioner denies that he has ever “railroaded” projects through the commission over the objections of other members. And the other commissioners agree with him. “We make up our own minds,” says commissioner Fil Chavez, a professional land-use planner. “If a consensus comes out of it, it is an honest consensus. No pressure is brought to bear.”

Christopher Sickels

By most accounts, the planning commission is a fairly close-knit group. Last summer, for example, a minor furor erupted when it was disclosed that the commissioners had been in the habit of lunching together privately and taking noon-time field trips without public notice to the sites of projects pending before them. Reporters for both the Los Angeles Times and the San Diego Union inquired as to whether the practice might be a violation of the state’s Brown Act, which requires that the public must be invited to attend meetings of government panels such as the planning commission. But the San Diego city attorney said that, in his opinion, there was no violation of the law and the question was not pursued.

One of the most recent field trips, however, seems to illustrate the fairly congenial nature of the commissioners in general and a business relationship between Davies and Homer Delawie, another member of the commission, in particular. Delawie, a noted local architect, was commissioned by Davies two years ago to design two residential condominium units he wanted to build on property he owned in South Mission Beach. Davies says he was aware of the potential conflict of interest in having Delawie, a member of the planning commission, dealing directly with city planning and building officials, so the project was carefully designed to allow simple approval without special variances from city hall. When the units were completed earlier this year, Davies, Delawie, and the rest of the planning commission had a small luncheon party during commission recess to inspect the units, which are half owned by Sickels.

In spite of the commissioners’ insistence that they are careful to allow enough time for full public discussion of the complicated issues which come before them, some members of the public who have dealt with the commission complain that they have not received a fair hearing. Perhaps predictably, this sort of complaint comes from homeowner groups who have been unsuccessful in their opposition to large new housing and industrial developments in their neighborhoods.

An example is furnished by the opposition to a project called Miramar Ranch North, a 2,000-acre development just north of Scripps Ranch along what has come to be known in planning circles as the “1-15 Corridor. ” First proposed in late 1979, Miramar Ranch North is to be a virtual “new town,” featuring shopping centers, houses and condominiums, and a fifty-six-acre industrial park, all of it carved out of what are now rugged hillsides. Eventually, more than 10,000 new residents are expected to live there.

The schematic drawings for Miramar Ranch North received quick approval by the planning commission. “Look how easy this hearing is,” Bill Rick, the engineer who shepherded the plan through city hall, was quoted by the San Diego Union as saying after the commission voted unanimously in favor. “I think it’s going to be easier for everybody than North City West.”

Some residents of Scripps Ranch, the already existing residential community to the south, were not as delighted. Nada Borsa, a real estate agent and Scripps Ranch activist, helped launch a battle against the proposed industrial park when it came before the planning commission early last year. The industrial park would be built by the edge of Miramar Lake, a city-owned reservoir, and would require moving massive amounts of earth to create the lots on which the industrial buildings would be constructed. It was not a prospect Borsa relished.

“That site was a prime spot for residential development.” she says, “but the developer was determined to put an industrial park right next to the lake. It was entirely insensitive and inappropriate.” Borsa and several other Scripps Ranch residents attended a special planning commission , workshop on the industrial park and three huge housing developments proposed nearby.

“It was unbelievable,” she remembers. “One of the commissioners wanted more time to study whether that much grading was needed, but the chairman [Davies] wanted to move ahead, fast. He said it wouldn’t be worthwhile to hold another workshop, that it would just be a waste of time. ” Dennis Downs, the chairman of the Scripps Ranch planning group, was equally put off. “The zoning of that industrial park above the lake was a travesty,” he claims indignantly. “It was a complete and total land-use disaster.”

Despite such testimony, the planning commissioners voted unanimously to schedule the development proposals, including the industrial park, for an August hearing, during which they were to decide whether to grant final approval. It was a hearing which neither Borsa nor any other Scripps Ranch residents attended. “There wasn’t any reason to go, ’ ’ she says. ‘i was so disgusted with the way the workshop was handled, I decided I didn’t want to get involved in that sort of thing anymore.” Residents like Borsa stormed away from city hall, convinced that something was not quite right, that for some reason they had not been listened to.

Without further public dissent, then, the planning commission, headed by Davies, unanimously approved all four development proposals, and the issue was, for most purposes, closed. Some of the Scripps Ranch residents theorized that the DAON Corporation, the Canadian-based developer of Miramar Ranch North, had a special advantage because it had hired local engineer William Rick as its representative. Rick is the son of a former city planning director, a friend of the mayor, and a member of the Port Commission.

But there was another connection of which they were not aware: planning commission chairman John Davies, since January, 1980 — a month after his initial vote to approve the Miramar Ranch North schematic plans — had been acting as attorney for his friend Sickels in a partnership with DAON. This deal involved a seventy-five-acre industrial park in Oceanside, sponsored jointly by Sickels/ O’Brien (another Sickels partnership) and DAON, the huge development firm from Vancouver, British Columbia. Davies helped Sickels draw up the joint venture agreement with DAON to build the park, and he has served as secretary since the venture’s inception.

Borsa, informed of the DAON-Davies link, now says she feels “deceived and outraged, but not surprised.” Another Scripps Ranch resident who followed the project and wanted changes in the proposed industrial park says she would have liked to have known about the DAON- Davies Oceanside venture, if only to have planned her “strategy” better. “I would have known that the deck was stacked against us, and I would have presented our case differently. When you get before the planning commission, you have to know just how far you can go, and when to begin compromising.”

Pete Wilson

Davies, on the other hand, says his relationship with DAON in the Oceanside project was indirect and played absolutely no role whatsoever in his decision to approve DAON’s San Diego plans. “I have no relationship with DAON,” he says. “My client is Sickels, and we may have helped him get into a joint venture with DAON, but all of my compensation for it comes from Sickels. I never had anything to do with DAON at all.”

The distinction which Davies draws is an important one, says John Meade, a spokesman for the state Political Fair Practices Commission in Sacramento. Meade says that there is no conflict of interest punishable by law unless it can be proven that a public official has somehow received compensation from the company whose project it is he voted on.

Davies himself says he is unclear about the financial arrangements of the Sickels-DAON partnership. “It [my compensation] probably comes out of the funds of the joint venture,” he says. “We do work for that project, but so what? I’m not an employee of DAON. Frankly, it never occurred to me I had any interest in what happened to DAON.”

But Sickels says that DAON put up the front money for the Oceanside project and used its own credit to obtain a loan to provide additional capital. “We put in the expertise,” he says of his and Davies’contribution. Only after DAON retrieves its original investment plus a profit agreed upon in advance can the Sickels group claim its own profit. Thus, according to Sickels, the Oceanside joint venture has been running on DAON’s money.

During Davies’ three-year tenure on the planning commission, he has voted on other projects of developers with whom he has dealt as Sickels’ attorney. In one instance, he voted to approve an industrial park sponsored by the La Jolla-based Me (Cellar Corporation. Although he didn’t disclose it at the time of the vote in August, 1979, Davies was helping to negotiate a land swap between a Sickels partnership and McKellar in another part of town. “Sickels and McKellar were adjoining property owners,” he explains, “and I was representing Sickels ... I had no relationship with McKellar at all. Whether their plans there or anywhere else were successful made no difference to me or to my client.”

In May of 1980, Davies voted in favor of a 17,800-square-foot shopping center project in San Ysidro sponsored by developer Ted Odmark, who is a limited partner in the Sixth Avenue Medical Center with Sickels. Davies says again that he only represented Sickels, the general partner, in the medical building and he never worked for Odmark. “I didn’t represent him, I represented Sickels,” he says. “The general partner [Sickels] hired me to draft it [the Sixth Avenue partnership] before we even knew who the limited partners were.”

And then there is the Grant Hotel. The dismal gray facade of the old building looms large over Broadway like the forlorn hulk of a battleship in mothballs awaiting another chance at war that may never come. Across the street is Horton Plaza, the site of a long-proposed, $100 million regional shopping center, but now just a grimy gathering place for winos and transients. The once-elegant Grant is almost empty, the retail tenants of the shops on the ground floor having abandoned ship because they say progress on the shopping center is too slow to make it worthwhile to hang on.

Three years ago, Sickels leased the Grant from owners Joseph Drown and Robert O. Peterson and pledged to return it to its former glory as a topnotch hotel. But economic hard times have interfered with his plans. Today, Sickels says he is counting on construction of the shopping center to hasten the hotel’s renovation. “I’m going to do the hotel with or without Horton Plaza,” he says, “but I sure as hell hope it happens.”

To redevelop the Grant, Sickels formed yet another corporation, this one called CDS-Grant, in which Davies serves as secretary. While in that position, he voted repeatedly to approve designs for the shopping center, and during one hearing last fall he argued forcefully against any delay in approval of the schematic drawings for the center, even though a planning department staff report had criticized them and a representative of the Gaslamp Quarter voiced serious reservations.

“If I were voting whether to select those six blocks [across from the Grant] as the Horton redevelopment project, and my client from whom I received fees for legal work owned property that adjoined it and would be impacted by it, then I would say that [would be] a conflict, an appearance of conflict,” says Davies.. “But to vote on schematics of redevelopment that had been in the works long before I was ever on the commission — just to pass it along to the redevelopment agency with conditions and suggestions as to how it can be revised — I don’t see that that is even an appearance of conflict because it happens that I have a client who has property that is near the redevelopment area.”

Nada Borsa at Miramar Lake

Controversies about alleged conflicts of interest by planning commissioners are nothing new to San Diego. Four years ago, commission members Homer Delawie and Oscar Padilla found themselves under fire on the editorial page of the San Diego Union after an investigative story by reporter Jon Standerfer ran in the paper. Standerfer revealed that both Delawie and Padilla had voted to approve a community plan for the Otay Mesa area, near the Mexican border, where both owned property. In spite of the revelations, City Attorney John Witt said he could find no overt conflict of interest and cleared the two commissioners of any wrongdoing.

But the Union was not entirely satisfied. “This episode should serve to remind all public officials of the strict code of ethics under which they must conduct their affairs,” the editorial said. “They must be extremely careful to avoid even the appearance of evil ... it means that members of the planning commission [should not] invest in commercial real estate.” Since then, most commissioners, Delawie in particular, have gone to great lengths to distance themselves from even the hint of conflict.

“Sometimes I think they carry it a little far,” says Davies. Soon after he was appointed to the commission in February of 1979, he says he became frustrated by the tendency of his fellow commissioners to make disclosures of connections which Davies felt did not represent true conflicts. “If you think there’s no grounds for disqualifying yourself, there’s nothing to disclose,’ ’ he declares.“The only time I did it [disclosing] was when I disclosed that [attorney James] Milch was my brother-in- law. I never did it again because it was pointless. I mean, so what?”

Although it was only a coincidence, in March of 1978, the same month the Delawie and Padilla case came to light, the city council adopted a sternly worded conflict-of-interest code for planning commissioners. It says, in part, that “any member shall avoid any action, whether or not specifically prohibited by law, which may tend to create the appearace of losing complete independence or impartiality.” The code also forbids commissioners from accepting “any gift or loan” from someone who is doing business with the city or who may come before the commission for regulatory approval.

While the city code only defines in broad terms what conflict of interest is and violation of it is not a crime, the state Political Reform Act, passed in 1974, is probably the toughest law of its kind in the United States. The act requires all high ranking public officials to make annual disclosures of their income sources. It also defines conflict of interest in the strictest terms ever embodied in a law.

One of the earliest cases brought to trial under the state law was in 1977 when San Diego City Attorney John Witt sued to prevent then-councilman Floyd Morrow from participating in a decision about a city redevelopment project in Linda Vista. Morrow, it happened, was the attorney for an investment firm which owned land across the street from the project, and Witt charged that the councilman was taking advantage of his position by voting on a redevelopment project which might benefit his clients.

Morrow lost in Superior Court and appealed the decision, but the appellate court ruled against him as well, saying that even the appearance of possible improprieties, not the improprieties themselves, provided sufficient grounds to force Morrow to leave the council chambers whenever the Linda Vista project came up for discussion. “A public official who must make decisions which may affect his employer’s purse,” the court held, “is in a situation where he may not give full consideration to the merits of a decision made in his official capacity.”

Although there appear to be similarities between the Morrow case and Davies’ relationship with CDS-Grant, the planning commissioner rejects the notion that his votes on the Horton Plaza shopping center have benefited Sickels in particular. “There is a general impact, I suppose, on everybody downtown,” he says. “There’s no specific impact on my client.”

In recent years, Davies acknowledges, he has handled much of the legal paperwork which has accompanied Sickels’ burgeoning real estate empire. There are so many Sickels partnerships and corporations, in fact, that Davies says he uses a chart to keep track of them all. Davies, however, has not disclosed this relationship on the annual statement of economic interest mandated by the Political Reform Act. He maintains that he is not required to do so.

“If you state [in advance] that you will not vote on any matters that involve clients, or participate in any matters that benefit clients, then it is not necessary to disclose the names of your clients,” says Davies. He insists that disclosure of the identity of his clients would violate their right to confidentiality and make it impossible for him to serve on the commission.

Davies, who with his father practices law with the firm of Hahn, Cazier, and Leff, says he doesn’t keep track of how much Sickels’ account is worth to the firm. ”1 have no idea. I don’t remember what the fees to the firm are. Actually, by the time you put a fee through the firm and then try to figure out how much that winds up putting in my pocket at the end of the year, it’s chicken shit.” In any case, he says, because the Grant case and the Oceanside industrial park were billed to the law firm rather than to himself, they didn’t have to be reported to the public.

One disclosure that is on record at city hall shows that Davies has been the recipient of a $60,000 interest-free loan from Sickels, and that Davies has reported receiving an annual $12,000 “gift” from Sickels and his wife for the past three years. Davies says both the loan and the series of gifts are part of the same arrangement. “We did a deal where I did not come out with what I should have,” says Davies, “so I gave him a note for $60,000 and then each year $12,000 is forgiven on the note ”

Davies says Mayor Wilson knows about his close friendship with Sickels and Sickels’ connection with the Grant. Davies sees the mayor about twice a week, Davies says, and they talk about “a lot of things, about the campaign, about how our lives are going.” The planning commissioner has raised “between twenty to thirty thousand dollars” for the mayor’s U.S. Senate campaign, he says, and in addition he serves on a committee which screens contributions from others for possible conflicts of interest. “We go over all the contributions that come in and advise whether they ought to be returned.” One of the criteria for making that decision, according to Davies, is whether the donor has had anything to do with the city’s downtown revitalization projects. “We won’t accept contributions from anybody involved in downtown redevelopment,” he says, pointing out that the Grant Hotel is not within an officially defined redevelopment area.

Because of that, he says, the mayor is not troubled by the relationship between Davies and Sickels. “Pete’s well aware that Sickels owns the Grant, and he’s well aware that we represent Sickels,” Davies says. Asked whether Wilson had any concerns about naming Davies to chair the recently formed study committee which is looking into the possibilities of building a new convention center, Davies shook his head. “Apparently not. That’s pretty remote . . . unless you say anything that happens downtown [represents a conflict of interest]. There isn’t any [proposed convention center] site that’s conveniently located to the Grant. . . . They haven’t been a convention hotel anyway. It’s so remote that I think the mayor is correct not to be concerned about it.”