City government

City, Neighborhood Partners and Twin Pines reach settlement, forge resolution to DACHA case

By From page A1 | January 10, 2013

After six years of legal back-and-forth, the city of Davis, Twin Pines Cooperative Foundation and Neighborhood Partners LLC have finally reached a binding settlement that globally resolves the dispute over the Davis Area Cooperative Housing Association Wednesday.

Twin Pines, the nonprofit cooperative financier that fronted cash to help start DACHA, and Neighborhood Partners — DACHA’s original developer — each lodged a constellation of lawsuits against the city and DACHA in 2011.

Among other allegations, the two organizations were suing the city and DACHA for misappropriation of public funds, breach of contract, fraudulent transfer, conspiracy and breach of governing documents.

The terms of the settlement, delineated in a press release sent out by the Davis City Manager’s office Wednesday, include that the city will give $315,000 to Twin Pines and Neighborhood Partners, to be split as the two groups see fit.

The payment is to cover the remaining balance on the judgment owed to Neighborhood Partners from its successful lawsuit against DACHA for the illegal termination of its contract with the association in 2009.

Additionally, the settlement stipulates that all other pending lawsuits and claims against the city of Davis, its successor agency and redevelopment Agency, DACHA and its members will be resolved.

“To facilitate the settlement and future policy discussions of affordable housing in Davis, the parties agree to resolve this matter amicably and not to disparage each other about DACHA or to continue to rehash the issues that led to these lawsuits,” the press release said.

“However, the parties will remain able to participate in policy discussions related to affordable housing and cooperative housing and to discuss DACHA on a ‘looking forward’ and ‘lessons learned’ policy basis.”

The settlement goes on to state that the city of Davis will return the $15,000 that Neighborhood Partners paid to the city as part of a recent court ruling.

All parties also will bear their own attorneys’ fees and costs.

In the end, it appears that both the city and the two organizations are breathing a sigh of relief that both cases were resolved before they reached trial in June.

“I’m relieved the parties have settled the matter,” Mayor Pro Tem Dan Wolk said in a statement to The Enterprise on Wednesday. “Now, instead of litigation, we can concentrate our collective energy and resources on what DACHA was fundamentally all about: providing affordable housing to individuals and families in our community.”

Mayor Joe Krovoza added: “I am very pleased and impressed that our current council stepped up to resolve a major issue that blossomed long before our respective elections.”

Louis Gonzalez, attorney for Neighborhood Partners and Twin Pines, said Wednesday that while his clients could have been awarded more, they’re happy to finally reach a resolution on the case as well.

“I think we’re glad to have been able to reach a settlement with the city, which (my clients) have been trying to do for a well over a year,” Gonzalez said.

As for future housing developments, Luke Watkins, co-owner of Neighborhood Partners, said that if the opportunity presented itself he could see working with the city on a new project.

“I (would) look forward to the opportunity to work with the city again, if possible,” Watkins said.

DACHA was created in 2002, as a limited-equity affordable cooperative housing association. Prospective members would pay $20,000 up-front — and then subsequent carrying charges — to join the association and live in one of the 20 homes scattered throughout the city.

The members would receive their money back in full if they chose to leave the cooperative.

In 2005, however, the DACHA board decided to terminate its contract with Neighborhood Partners, which was later deemed illegal in court.

The city, which had refinanced DACHA ’s assets in 2006, making them the lending agency for the association as a result, was forced to foreclose on the 20 homes in 2009 when Neighborhood Partners successfully sued the association for about $332,000.

The city has since bought the homes outright and re-purposed them as affordable rental units, now called the GAMAT Homes. Fourteen of the 20 houses are occupied and each tenant is up to date in rent, according to the city.

The average rent is $1,084 for two-bedroom units and $1,162 for three-bedroom units.

— Reach Tom Sakash at [email protected] or 530-747-8057. Follow him on Twitter @TomSakash

Tom Sakash

Tom Sakash covers the city beat for The Davis Enterprise. Reach him at [email protected], (530) 747-8057 or @TomSakash.
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