The developer of the shelved 677-home West of Fairview project
has filed a lawsuit to force an extension to the company’s expiring
agreement with the City of Hollister.
Irritated by stalled talks with the city and allegations that
Hollister officials publicly discussed details of their secretive
negotiations, Award Homes recently filed the lawsuit with the San
Benito County Superior Court.
The developer of the shelved 677-home West of Fairview project has filed a lawsuit to force an extension to the company’s expiring agreement with the City of Hollister.
Irritated by stalled talks with the city and allegations that Hollister officials publicly discussed details of their secretive negotiations, Award Homes recently filed the lawsuit with the San Benito County Superior Court.
Award Homes is seeking an extension to a 3-year-old agreement that expires at the end of 2003, along with $60,000 in damages, according to court documents.
The city and Award Homes have been negotiating during the past seven months over the possibility of extending their deal – which had included added conditions favorable to Hollister.
Already mounting frustration over negotiations for Award Homes, however, worsened when the media obtained details of new proposals in mid-August, according to Michael R. Van Every, acquisition land development manager for Award Homes. The company alleges a city official leaked that information.
As part of negotiations, Award Homes had reportedly offered to increase the $250 million project’s slate of affordable housing units, $2 million up front and a large monetary contribution toward construction of Fire Station 2, according to unnamed sources and confirmed by Van Every.
“We believe it was a situation,” Van Every said of the talks for a new deal, “where we tried to work out an acceptable compromise and give more to the city.”
If Award Homes follows through on the lawsuit, progress made during the closed-door talks would be squashed and the city could lose millions from any potential inclusions to the deal.
The $60,000 sought in the suit would cover legal costs for those talks with the city now potentially deemed pointless. While Van Every said City Attorney Elaine Cass and other Council members had been “working in earnest” to complete a deal, he called an alleged breach of trust by one Council member “the last straw.”
City Council members would not comment because it would violate established bargaining policies and state law. Cass also declined comment, beyond saying she was disappointed by the lawsuit.
Award Homes pursued the legal route, Van Every said, largely because the city was asking for too much in a new deal. Aside from the city’s request for $2 million for the new fire station, Hollister officials petitioned for other conditions relating to sewer and street improvements, he said.
“When it got down to the nitty gritty,” Van Every said, “it started to add up. We had to ask ourselves: Is one project reasonable for all existing (problems) that transpired? Absolutely not.”
The West of Fairview project, proposed for the corner of Airline Highway and Fairview Road, has been in the works for more than a decade, Van Every said.
The Council initially approved the 127-acre subdivision in October 2000 – a concern to many residents and officials at the time who said the city lacked appropriate infrastructure to handle the development.
That deal was to hold up under the stipulation Award Homes would start the project by Dec. 31, 2003.
In mid-2001, the Local Agency Formation Commission – responsible for annexation of county property into city limits – agreed with that stance and delayed the project’s momentum. Subsequently, in May 2002 Award Homes filed a $56 million lawsuit against LAFCO.
At about that same time, a $15 million sewer spill at the city’s wastewater plant, to some, validated concerns about sewer capacity.
And a consequent state-ordered building moratorium halted any new constructions, including West of Fairview, until October 2005.
“We knew the day the sewer broke we would be on the shelf until they fix that,” Van Every said.
The sewer moratorium, according to Award Homes, is an “excusable delay” for the project. And in the litigation filed this past week, Award Homes is requesting the contract’s term be extended through the completion of the moratorium. The city, Van Every said, has not agreed with the “excusable delay” disposition.
“We are not going to give up and a deal is a deal,” he said. “We have the wherewithal to hang in there as long as it takes.”
