Council Accepts Embattled Wuo’s Resignation; Terms of Highlands Lawsuit Settlement Revealed
By Joe Taglieri
Amid escalating controversy, John Wuo resigned from the Arcadia City Council “due to personal and health reasons,” Mayor Gary Kovacic announced Tuesday.
After 12 years of council service and three mayoral terms, Wuo unexpectedly vacated his post via a letter the mayor received Tuesday afternoon just before the council meeting that evening.
“There is still a rough road ahead and difficult decisions will need to be made to ensure that Arcadia continues to run like a well-oiled machine,” Kovacic relayed as he read aloud from Wuo’s resignation letter. “I have total confidence in the current council to do just that. I love Arcadia, and it is time to say goodbye.”
Since July controversy has swirled around the former councilman after Arcadia Weekly reported on his ties to Gemcoin, an allegedly fraudulent investment scheme. Gemcoin boss Steve Chen and a number of his Arcadia-based corporate entities based are the subject of an ongoing probe by federal authorities.
Gemcoin investors have publicly accused Chen, Wuo and others affiliated with the cryptocurrency of defrauding them.
Wuo recently became the subject of an ethics investigation by the California Fair Political Practices Commission and was named as a defendant in a class action lawsuit filed on behalf of a Gemcoin investor.
Wuo did not mention the controversy in his resignation letter, nor did his former colleagues.
“I think the city council was an important chapter in John’s life, and to submit his resignation took a certain amount of courage,” Kovacic said in an interview.
“I don’t think it was a decision he was forced to make,” the mayor added. “I think it was a decision he made after some reflection on how his resignation would reflect on his reputation … and legacy. It’s a decision that’s not easily made, and he didn’t have to make it. He could have made another decision.”
Council members agreed to appoint someone to Wuo’s vacated seat at the next council meeting Oct. 20.
Kovacic and Council Member Tom Beck announced their support for Mickey Segal, a former Arcadia councilman.
In an interview Segal said the chances he would accept an appointment to the open seat are “better than 50-50.”
Wuo was up for re-election in April, and Segal said if appointed he doesn’t intend to run in the upcoming council contest.
Segal, an accountant, received accolades from council members and residents for serving as the arbitrator for the lawsuit residents of the Highlands neighborhood filed against the city in an attempt to block two council-approved construction projects.
Filed in March, the lawsuit highlighted the ever-contentious issue of mansionization.
The issue has pitted real estate investors in favor of building large homes to maximize profit and residents concerned about economic impacts on the city against homeowners concerned about issues such as privacy, a neighborhood’s architectural synergy, and environmental impacts. Both sides argue that property values are negatively impacted as a result of the other’s preferred policy direction.
For nearly an hour residents representing both sides of the issue expressed concerns during the public comments segment of the meeting, reflecting Arcadians’ growing level of attention to real estate matters.
The lawsuit settlement paves the way for resuming a citywide revamp of residential development rules as well as including the Highlands in a survey of Arcadia’s historical architecture.
“I’m very happy we were able to come up with a settlement,” said Council Member Sho Tay. “Now we can resume our city zoning code study, which was started June 3, 2014 and was put on hold March 12, 2015 because Save the Arcadia Highlands filed a lawsuit against the city.”
Kovacic also voiced approval for getting the zoning update back on track.
“I still think the split vote to stop the residential zoning update was a big mistake,” he said in reference to the council’s 3-2 decision to shelve the process pending the lawsuit’s resolution. “It unreasonably delayed a necessary process, it unreasonably exacerbated tensions between and among our residents and the city council, and it created a void in leadership.”
The lawsuit focused on 1600 Highland Oaks Drive and 29 E. Orange Grove Ave. After a lengthy appeal process involving the Highlands homeowner association, the Arcadia Planning Commission and the city council, both existing houses on the properties were slated for demolition and replacement with significantly larger dwellings.
Residents then sued the city in an attempt to block the council-approved designs for new homes.
City Attorney Stephen Deitsch announced the terms of the settlement, key highlights of which include:
–Bowden Development Inc. must submit a revised design for the Highland Oaks Drive home that doesn’t exceed 5,800 square feet and is a single-story rather than the originally proposed two-story design.
–The revised plan for 29 E. Orange Grove Ave. from Mur-Sol Construction Inc. must not exceed 5,775 square feet with a single story that doesn’t exceed 17 feet 6 inches.
–The council will approve or disapprove the revised plans.
–The developers must pay Save the Highlands’ attorney fees.
–The council will vote on resuming the residential zoning update and the Highlands portion of the historical survey at the panel’s next public meeting.