Pacific Grove >> Don’t blame Pacific Grove for the failure of the proposed luxury hotel development Project Bella.

That was the main sentiment expressed in the city’s official response to the recent civil grand jury report, which investigated the mishandling of the 160-room hotel development at the site of the American Tin Cannery Outlets. The city’s response was posted to the civil grand jury website (https://bit.ly/2LB7h5f) Wednesday.

The grand jury’s 18-page report released in June determined the city’s mishandling ultimately cost Pacific Grove $100,000, which was never reimbursed. The civil grand jury initiated the investigation in response to a citizen complaint.

“The core concern we had was that implication that the city’s handing caused the demise of Project Bella and we feel that is absolutely not true,” said Mayor Bill Kampe.

As stated in the response, “The report implies and comes very close to stating an opinion that the cause for the termination of Project Bella rests with the City. On the contrary, City reviews of the project suggest that the outcome would have been the same regardless of the City’s actions.”

While the report had the unreimbursed cost of Project Bella to the city at $101,402.47, the response has the maximum unreimbursed expenses at under $40,000.

Additionally, the city addressed each of the report’s assertions of facts and the grand jury’s findings individually as they related to the project’s reimbursement agreement, the city’s documentation process and any perceived conflict of interests by Pacific Grove City Manager Ben Harvey.

Officials partially agreed with the findings there was a lack of clearly defined systems in place that contributed to public criticism of city administrators and partially disagreed with the findings that the city lacked adequate procedures to track documents and processes to account for employee time on the project.

“The other thing that was noted in the report was a helpful confirmation about the needs for time tracking if we are going to be charging time against projects,” said Kampe, noting that the city now has (and had before the grand jury report came out) software that allows such time tracking. He also noted the meeting that was held as an open council session addressing the need to be careful about document management and the importance of document preparation and tracking.

“We need to make sure procedures for managing projects of this scale are followed diligently,” said Kampe.

When the grand jury report was released in June, it also listed findings concerning Harvey — mainly that the city manager had shown a “lack of sensitivity to the appearance of conflict of interest created when he joined Jared Ficker’s group membership in Surf Air.” Ficker was a sub-contractor of Domaine, the development company behind Project Bella. As part of Harvey’s employment benefit contract he commutes back and forth from Southern California where his family resides and he has used Surf Air to do so. The city partially disagreed with the grand jury’s opinion on this issue.

“There were a number things investigated and no wrong doing was established,” said Kampe.

“We felt some of the comments stated regarding travel benefits that are a part of his benefit contract were simply unfounded and there was a lack of understanding of the nature of it. Also, there’s a cap in place so it wasn’t an unbounded benefit by any means.”

To back up Kampe’s point, the response stated, “… Mr. Harvey was provided a monthly allowance from the City for transportation and housing, in a not-to-exceed amount. This amount was part of his compensation, and available for him to use at his discretion – for travel and housing. Any spending more than the allowance would be a personal expense and not a cost to the city.”

Additionally, Councilwoman Cynthia Garfield noted frustrations with the report in terms of the lack of documentation included when it came to its conclusions.

“They give you a list of conclusions and no opportunity to find out why or what the basis is for that conclusion – there’s no reference to better understand some of the recommendations they made and without understanding how or why a conclusion was reached it makes it hard to say ‘Oh yes, you’re right, we agree.’”

Still, both Kampe and Garfield acknowledged the lessons to be learned from every project and noted the city would embrace those lessons moving forward with future projects like the Hotel Durell and the development at 520-22 Lighthouse.

“We do a lot of residential remodels in this city but projects of this size are rare,” said Kampe. “Now there’s the Durell, the Holman and the (520-22) Lighthouse project approved – all are pending and will be coming before the city and we need to learn the lessons that we need to use there.”

Said Garfield, “It’s the city’s job to deal with all those who want to do business with the city. There’s lots of things we learned and hope we’ll take that into account … and some day I’m highly optimistic that owners of the (American Tin Cannery) will find another developer and we’ll all work together.”

Carly Mayberry can be reached at 831-726-4363.