Gafcon Statements Regarding Daily Pilot Article (August 6, 2014)

Gafcon Statements Regarding Daily Pilot Article (August 1, 2014) – August 6, 2014

“Once Larry Agran and his group took control of this thing, there were no budgets,” testified former
Irvine Co. CEO Richard Sim, who served on the Great Park board. “It was like the sky was the limit.”

This allegation is false. Mr. Sim was on the Board for a very short while before the Design Studio won the
International Design Competition. He was not on the Board when the City negotiated the contracts with the
Design Studio.

The Master Plan and Schematic Design contracts had specific budgets that were negotiated and approved
by the City of Irvine and Great Park staff. The Design Studio contract for the Master Plan consisted of a
total of six major tasks, each with a defined budget and list of deliverables. The Great Park Corporation and
its Program Manager, Bovis Lend Lease, reviewed and approved the final budget for the Master Plan
contract. All subsequent budgetary transactions under this contract were approved by Great Park
Corporation staff or the Great Park Board of Directors. In 2009, Diehl Evans & Co. was hired by the City of
Irvine to perform a contract compliance review of the Master Plan agreement. In regard to the budgetary
transactions that occurred on the project, Bill Morgan of Diehl Evans, & Co. indicated in his presentation to
the Great Park Board of Directors that “the staff or the Board is approving all of these things.”

The Design Studio contract for the Schematic Design phase consisted of a detailed line item budget that
was negotiated between the Design Studio and the City’s team of experts hired to assist the Interim CEO
Sharon Landers in the negotiation of the contract. The line item budgets were reviewed in detail by the City
and its team of experts. Moreover, the City negotiated a fixed fee agreement with the Design Studio for the
Schematic Design agreement. In addition, the Design Studio fees were reviewed by two separate City paid
experts including the Program Manager Bovis Lend Lease and a separate consultant, who advised the City
Council that the fees were favorable to the City.

In addition, while Gafcon will not speculate on who Mr. Sim is referring to when he references “Larry Agran
and his group,” the company wants to make clear that neither it nor CEO Yehudi Gaffen had a relationship
with Mr. Agran prior to working on the Great Park design.

Sim said contracts were not properly put out to bid and instead were steered to the councilman’s
associates — people whom city staff members derisively referred to as “FOL,” or “Friends of

This allegation is false. Gafcon had no previous connections to Larry Agran or other members of the Great
Park Board or Irvine City Council prior to working on the Great Park design. In 2005, the City of Irvine
initiated an international design competition to select a master designer for the park. The selection process
included two independent juries, input from the public at large, and interviews performed by the Great Park
Board of Directors. Ultimately, Ken Smith Landscape Architect was selected as the Master Designer, along
with a “core” team of consultants, including Gafcon, who were all identified, vetted and approved by the
Great Park Board of Directors.

“We had a saying amongst the insiders,” testified William Kogerman, a former Great Park board
member and a retired Marine. “We never seem to have enough money to do it right, but we always
have enough money to do it over.”

The implication by Bill Kogerman that the Design Studio’s work needed to be redone is false and
misleading. None of the work performed by the Design Studio was redone or revisited as a result of having
been previously done incorrectly. All of the change orders awarded to the Design Studio contracts were
authorized by the Great Park staff and Board of Directors and were for additional work requested by the
Corporation and City that was not anticipated under the original scope of work. Furthermore, changes to
the designs that were performed by other design entities after the Design Studio left the project were
performed at the direction of the Corporation and were largely due to changes in the financing for the park
and a resulting change in vision for the various components of the overall park.

“The idea of being able to build a canyon and a lake and a cultural center and stay within what
everybody was talking about at the time, a $1.3 billion budget, was lunacy,” Kogerman said.

On March 1, 2007, the Design Studio presented a detailed Master Plan cost estimate and overview of the
estimated costs of the various park elements, including the canyon, lake and cultural terrace. At this
meeting, the Great Park Board was pleased with the information provided, and Mr. Kogerman supported
the Design Studio’s proposal to include the park-wide infrastructure as part of the initial phase of
development. In addition, no concerns were raised by Mr. Kogerman indicating “lunacy” in the Design
Studio’s estimated cost for the various park features.

It was not until the recession and complications with state funding that the City did not have the
funding to complete the park as planned and decided to scale the back project to meet the fiscal situation.