by Louis A. Gonzalez, Jr.
The Davis City Council’s editorial in the March 7, 2012 newspaper was not only improper, as it spoke to confidential settlement communications, it was erroneous and a piecemeal (re)characterization of the events that have been ongoing since 2005.
In any event, while Twin Pines Cooperative Foundation and Neighborhood Partners, LLC have honored the confidential nature imposed by the law of such communications in the past, in order to foster an environment that is conducive to settling, they are now forced to respond to the Council’s editorial.
The January 27, 2012 Offer
The January 27, 2012 offer was, from my clients’ perspective, the first offer that the City and Redevelopment Agency have made to Twin Pines Cooperative Foundation and Neighborhood Partners. While Twin Pines Cooperative Foundation and Neighborhood Partners will not delve into each detail of the January 27 offer in order to preserve some respect for the confidential nature of such communications, they point out the simple unattractiveness of the January 27 offer.
As an initial matter, the two organizations simply cannot entertain an offer for $280,000, as this is less than the amount that Neighborhood Partners is already entitled to collect from its 2009 judgment against DACHA (who is also a defendant in this action). More bluntly, the offer gave Neighborhood Partners less than the Judgment it obtained against DACHA and offered Twin Pines Cooperative Foundation nothing on its pending lawsuit. Moreover, the January 27 offer reads very similar to the April 2010 “offer,” which, as explained below, was wholly inappropriate.
Was There An April 2010 City “Offer”?
The supposed April 2010 “offer” to my clients was not an offer at all. It was an April 7, 2010 email sent by one individual, Councilmember Stephen Souza, who wrote “I put forward this framework for settlement.” In an in-person meeting with my clients only four days later, Souza expressly made clear that he was not acting on behalf of the City Council.
On April 13, 2010 my clients sent Souza an e-mail asking whether the City Council had taken any action on the DACHA matter the previous evening. The response from Souza was, “No, and I send you all my framework for a settlement with correct and updated numbers.” On April 24, 2010, my clients obtained a subsequent e-mail from Souza stating “I, not the City or Agency, put forth a framework for settlement.” While Mr. Souza could not be more clear that he was not acting on behalf of the Council, in their editorial the Council finds it convenient to recast Mr. Souza’s solo effort as an “official” City offer.
So why the revisionist history? Clearly the City Council is under severe public scrutiny for wasting precious public funds on this. They hope to create the perception that the City tried to make a reasonable offer to settle these matters in April 2010, but have instead been forced by my “greedy” clients to continue to run up a legal bill of hundreds of thousands of dollars. Nothing is further from the truth. The City has rejected all efforts to mediate or engage in settlement discussion in connection with the Twin Pines Cooperative Foundation lawsuit and even required Neighborhood Partners to bring a separate action against the City and the Redevelopment Agency in 2011.
In his April 2010 e-mails, Souza offered (to Neighborhood Partners) that the City would pay Neighborhood Partners’ judgment against DACHA in exchange for Twin Pines Cooperative Foundation dismissing its legal claims. On its face, this statement was illogical, as it required Twin Pines Cooperative Foundation to dismiss its lawsuit and receive nothing in exchange for Neighborhood Partners receiving less money than it was entitled to under the Judgment. What did Twin Pines Cooperative Foundation stand to gain in accepting such a ridiculous “offer”?
Below the surface, the “offer” is completely inappropriate- Souza was essentially asking David Thompson, one of the owners of Neighborhood Partners, who is also an unpaid Board President of Twin Pines Cooperative Foundation, to get the rest of Twin Pines Cooperative Foundation’s Board to dismiss the legal claims of the nonprofit tax-exempt organization in exchange for personally receiving money to put in his own pocket.
Had Thompson accepted such an offer, he would not only breach his fiduciary duty to Twin Pines Cooperative Foundation, he would be engaging in an unlawful self-dealing transaction. Thompson immediately disclosed what he considered to be Souza’s improper offer and the conflict to me as the attorney for Twin Pines Cooperative Foundation. In response, we provided Thompson with a statement to read to Souza at the opening of his April 11, 2010 meeting with Souza and advised Thompson not to participate in any agreement that did not take the needs of Twin Pines Cooperative Foundation into account. However, even after Mr. Thompson’s statement at the April 11, 2010 meeting and after the April 13, 2010 City Council meeting, Mr. Souza’s offer never changed.
DACHA’s Reserve Funds
Twin Pines Cooperative Foundation and Neighborhood Partners also point out that the April 2010 proposal from Souza had the City and Agency making available half of DACHA’s Reserve Funds ($143,000 of $286,000) to pay a portion of Neighborhood Partners’ judgment. This was money DACHA borrowed from the City but, without reason or explanation, was being held in reserve by the City.
In this email, Souza is confirming that in April 2010 DACHA had $286,000 in reserve funds. The City has repeatedly claimed that Neighborhood Partners’ October 2009 $57,000 levy on DACHA’s bank account drove DACHA into foreclosure. In reality, the $286,000 in DACHA’s reserve funds that were apparently still available in April 2010, could easily have been allocated to cure the foreclosure, but were not. Why did the City not release these funds so that DACHA could prevent foreclosure? Perhaps some light is shed on this by realizing that the City has gained all of DACHA’s assets (including the 20 homes) by foreclosing on DACHA. .
The Claims
If the public requires a further understanding as to why the January 27, 2012 offer was one that neither Twin Pines Cooperative Foundation nor Neighborhood Partners could have credibly entertained, the organizations remind the people of the City of Davis of the ongoing factual claims in both cases. By way of background, in 2005 DACHA Members asked the City Staff to find a way for them to own their own homes. City Staff knew that it is against state law for members of a limited equity housing cooperative to dissolve a co-op for personal gain. Rather than tell the DACHA Members that they could not own the homes outright, City Staff helped DACHA’s Members pursue the illegal dissolution of DACHA.
The Unlawful Acts of the City Staff
Due to their tens of thousands of dollars in unpaid rent and personal delinquencies, the Board and Members of DACHA were ineligible to be seated as Board Members, to take Board action, to be part of any legal quorum, or to vote. Nonetheless, the illegal Board and illegal Membership violated various DACHA Bylaws and State laws, with the help of City Staff, to pursue the illegal objective of owning the homes outright, and reaping an equity windfall of $200,000 for each household over time which they were not entitled to receive. The equity belongs to Twin Pines Cooperative Foundation which initially invested and created the cooperative. Upon dissolution, which could have been avoided by DACHA’s own reserve monies, the equity was required, under California law, to pass to Twin Pines Cooperative Foundation. In turn, Twin Pines Cooperative Foundation is required to use it to create other affordable cooperative housing.
City of Davis residents must ask themselves why did City Staff spend hundreds of thousands of public funds to help DACHA violate its own Bylaws, State law, and various existing contracts? Moreover, why did the City Staff take equity away from Twin Pines Cooperative Foundation, which is required to and would use its equity in DACHA to help fund and create more affordable cooperative housing?
The Citizens of Davis are paying a heavy price for City Staff helping DACHA commit illegal acts. The expenditures of public funds on legal costs by City Staff are far higher than admitted to recently by the City Attorney. Despite my clients’ public records requests for full disclosure of the public funds, the City has refused to provide full documentation. From the detail we have, the City Attorney has directed about $700,000 of public funds towards defending DACHA and its illegal acts. In addition, two law firms asked by the City to represent DACHA spent another $130,000 defending DACHA’s illegal actions with the likely anticipation of being paid by the City. DACHA still owes them that $130,000. As residents of the City of Davis, your readers may wish to look further into these matters themselves. More information is available at the following website: www.community.coop/davis (click on “DACHA”). Some of the points of interest at the website include the Arbitrator’s Report awarding Neighborhood Partners a $331,000 judgment (which was later turning into a court judgment), and a set of 20 Points of Evidence, which were provided by Twin Pines Cooperative Foundation to the Attorney General.
Louis A. Gonzalez, Jr. is an attorney who represents Twin Pines Cooperative Foundation and Neighborhood Partners LLC
This is an incredibly complex issue and errors were most likely made on both sides of this “deal”. The LAW and contracts probably favor TPC and NP (I have read quite a lot of what’s been written for the public to see, from both sides). However, looking at the bigger picture, this is another example of the way people were taken advantage of in the whole housing bubble. Most people would not understand the complexities of such a convoluted deal when they signed up and the masters of the deal know that and use it to their advantage.
“Perhaps this is a knee-jerk reaction to the Yolo County Superior Court’s latest ruling that both lawsuits would proceed to trial- despite the hundreds of thousands of dollars of City and Redevelopment Agency funds that City Attorney Harriet Steiner spent attempting to avoid both of these meritorious cases.”
What is the date of the court’s “latest ruling”? Is there any way for us to read online copies of the two lawsuits to which you refer?
Is there some legal authority for requiring that such negotiations (or alleged negotiations) be kept confidential, or is it just bad form?
Without divulging anything confidential, can you discuss whether parties’ attorneys tend to have continuing contacts over the years to discuss possible settlements of if settlement attempts just pop up from the blue?
“The City has rejected all efforts to mediate or engage in settlement discussion in connection with the Twin Pines Cooperative Foundation lawsuit and even required Neighborhood Partners to bring a separate action against the City and the Redevelopment Agency in 2011.”
The City Council’s op-ed claimed two City-offer attempts, but neglected to suggest that you or your clients made any “efforts to mediate or engage in settlement discussion.” Does your statement contend that the Council’s oversight ignores your efforts? What do you mean that the city “required” you to bring a separate action?
Dlemnongello: have you seen the materials given to the potential DACHA residents? All of it was vetted by City Staff and Attorney. From memory, the figures were reasonable, and accurate.
The problem started in the middle of the housing bubble frenzy, when some members of DACHA decided they wanted to take ownership of their member homes, and staff encouraged and facilitated that process.
So no, this is not complicated.
I read the pleadings, and they are clear and simple. It’s why the Superior Court recently wrote an opinion allowing Twin Pines and NP to take their complaint to trial, with the City as a defendant due to misfeasance of city afforadable housing staff.
I have a feeling after depositions are taken, the plaintiffs are going to win summary judgment on a number of counts due to the black and white nature of some of the facts.
You all realize that Twin Pines alone is owed several million dollars? (David, you should post up a pdf listing the claims, and expected damages.)
NP is owed in the seven figures, including damages, interest on liquidated damages, and attorneys fees.
I think the costs to date to the city for attorneys fees expended to litigate staff and city attorney conduct and advice are north of $800K, and will soon hit seven figures.
Meanwhile, until I see that this DACHA mess is resolved, and the appropriate staff are held accountable, I dont take seriously anything I see coming from the CC or senior staff. (Same for water: there has been ZERO accountability for the disaster that happened to the CC on Sept 6.) The issues are linked by lack of accountability.
The recent CC Editorial was yet another botched attempt to cover things up as to how the City, acting through staff and the city attorney, attempted to give away millions of public dollars, and to destroy NP, its principals, and the good name of coops in Davis as a housing model.
From the posts to the Vanguard over the weekend it is now more clear that the City was aware and behind the offer that Stephen Souza made.
We always wondered about the City role but had no confirmation from Souza about the City role. He continued to tell us it was only him.
Now different remarks made by Joe Krovoza and Stephen Souza to other people make sense that the City was behind the offer.
I am just not sure why Stephen Souza continued to mislead everyone?
Perhaps Sue Greenwald can clarify the role of the City.
Was Souza told by the City Council and City Attorney not to reveal that the Council was behind the offer?
On my part I am glad that it is finally confirmed that the City was behind the offer.
David Thompson, Twin Pines Cooperative Foundation
Mike, I think it is pretty clear that this model, with mandatory expansion, was not feasible.
As for Stephen Souza making an offer, who else could have been behind it but the city?
dlemongello:
I have helped write the laws governing capitalization in California’s food co-op. I wrote the two laws in California which changed the capital requirements to allow food cooperatives such as the Davis Food Co-op to have stronger capital. I led the efforts for the DFC to go from $10 lifetime to $300 max. As a result, the DFC has one of the strongest capital bases in the country.
I helped to create the Dos Pinos Housing cooperative under the same guidelines that were used for DACHA. Dos Pinos has worked well for over 25 years with almost 200 families moving in and out.
The share prices at Dos Pinos are well above the share prices at DACHA. The same law firm was used and the same documents were used and approved by the same City Attorney and City staff.
The difference pure and simple is greed. Under oath the DACHA members have stated they wanted to own their own homes. They would each have made
$200,000 over time in personal gain.
The Dos Pinos Members could have attempted to achieve personal gain but they honor the practices and principles of limited equity housing cooperatives, they follow the bylaws and they follow the law. Dos Pinos is meant to be a permanent cooperative forever serving people.
I am proud of the members of Dos Pinos and of their contribution to cooperatives.
If you want to allow DACHA members to break the law and dissolve a co-op for personal gain then where will we be with all of our efforts to develop cooperatives?
David Thompson, Twin Pines Cooperative Foundation
The part about them wanting to OWN the homes after joining a cooperative is one of their errors, I did say I believe there are errors on both sides.
Will this appear in Davis Enterprise?
dlemongello:
You say above [i]”I think it is pretty clear that this model, with mandatory expansion, was not feasible.”[/i]
What are you relying on to come to this conclusion? Have you reviewed the financial statements of the organization? Are you relying on the “audit”? If so, did you carefully read the audit and review the assumptions that Jeff Dale, the auditor, made to come to his conclusions? Did you read the Arbitrator’s ruling that dismissed the conclusions of the “audit” as inaccurate. Why would you think that growing the cooperative from 20 houses to a better economy of scale at 60 would be infeasible? Let’s discuss the economics of your opinion, since you are so confident.
In order for the residents to dissolve DACHA and take personal ownership of their units, there had to be the “big lie” put forth that the organization was in a financial shambles and further growth would make it even worse.
Please tell us what specific economic details about DACHA made it infeasible to grow?
The proposal made by Council member Souza (now we learn the City) required me to engage in a self-dealing transaction, as I am a principal in Neighborhood Partners and President of Twin Pines Cooperative Foundation.
If I had accepted the offer I would have personally gained $150,000 but Twin Pines Cooperative Foundation would have received nothing. Except I was asked by the City to get The Twin Pines Cooperative Foundation to drop its law suit against DACHA and its member for breaking numerous California laws.
I brought this legal conflict (self dealing transaction) up to Council member Stephen Souza at our first meeting on April 11 as an offer I could not participate in unless it recognized the rights of Twin Pines Cooperative Foundation.
Mr. Souza did not respond at the meeting nor was the offer ever changed. At the April 13 closed session Council meeting I assume Mr. Souza would have brought up my concerns.
Even after the April 13 Council Meeting, the offer came back without it still being addressed to Twin Pines Cooperative Foundation and with no change in the offer, i.e.: $150,000 in personal gain for David Thompson as part of Neighborhood Partners and I had to get Twin Pines Cooperative Foundation to get nothing but drop the lawsuit.
The City has continued to make the same offer of personal gain to me with the requirement that I must get TPCF to drop the suits. I have not been able to speak about this issue given communication from the City stating they were: Confidential; Settlement Communication. By the City’s breach of their own confidential communications I am now freed from the restrictions.
So $150,000 to me personally with the requirement I get Twin Pines Cooperative Foundation to drop its lawsuit and get nothing. To engage in the City’s offers as presented is against nonprofit law and corporate law in California as a self-dealing transaction. I take my duties to Twin Pines Cooperative Foundation seriously and have always thought that the Souza and subsequent City offers amounted to a personal bribe at the expense of Twin Pines Cooperative Foundation. That is a reason why the Souza and City offers have never been acceptable.
After more details came to light through the discovery process in the Twin Pines Cooperative Foundation lawsuit, the Yolo Superior Court overruled the City’s objections and added the City and the Redevelopment Agency as defendants to the suit against DACHA. Details provided over the weekend warrant a further review of our rights.
The eight causes of action now in the Twin Pines Cooperative Foundation lawsuit are:
1). BREACH OF CONTRACT;
2). BREACH OF GOVERNING DOCUMENTS;
3). INTERFERENCE WITH CONTRACT
4). BREACH OF FIDUCIARY DUTY;
5). VIOLATION OF CALIFORNIA HEALTH AND SAFETY CODE §33007.5;
6). CONSPIRACY;
7). DECLARATORY RELIEF;
8). UNJUST ENRICHMENT
David Thompson, President, Twin Pines Cooperative Foundation March 12, 2012
Luke, how many EMPTY UNITS would it take for it to be realized that growth was not in the best interest of solvency?
dlemongello:
You seem to think there was a vacancy problem at DACHA when the residents illegally seized control of the Board of Directors in Fall 2005. How many vacancies do you think there were at that time? And from which document have you confirmed that?
You see Luke, for me the legalities are not the main issue. The residents were in a vice, but legally they had nowhere to go, so out of desperation they did some things that put them in breach of contract. The law is on your side, I get it. You have the contract they agreed to even if what they agreed to was foolish of them, it does not release them. So you and David can take it all to the cleaners, they probably don’t have a legal leg to stand on. Neither do lots of people who are being foreclosed on by banks, but the system that drove the housing bubble frenzy is at fault too. I know my arguments are too squishy to matter, so just write me off, OK?
dlemongello:
The DACHA residents were in no way similar to people who were foreclosed on by banks that offered them low interest rate loans that adjusted upwards a few years later, at which time the people couldn’t afford the higher payment.
The DACHA residents could give 60 days notice, and get their share back.
Why didn’t the unhappy DACHA residents simply do that? Because they were trying to sieze control of their homes in order to enrich themselves, at the expense of Twin Pines Cooperative Foundation, a 501c3 charity. They were hardly innocent victims of scammers.
By the way, I don’t appreciate your implication that I am a scammer. What kind of person accuses someone of that, but then can’t back up their malicious attack with any actual facts? This is particularly disappointing because you and I have known each other for more than 30 years, and you have never once communicated with me about this.
The only entity that foreclosed on DACHA was the city of Davis. We went to bankruptcy court and halted that foreclosure. And then DACHA fought us (with a lawyer funded by the city) to have the bankrupcy protection lifted, so that they could be foreclosed on by the city. Why? They were colluding to cheat a charity out of its asset.
dlemongello Just got back.
You might say “legalities are not the main issue”. But I think they are.
Would you say the same thing if that happened at the Davis Food Co-op, at the Artery, at Dos Pinos?
Vacancies at DACHA (in October of 2005) for the last board meeting where NP advised the board were ZERO. I will meet with you and show you the rent rolls.
At the October 2005 meeting that the members (illegally) removed Dallas Kassing (former President of the Davis Food Co-op).
In October of 2005 there were no vacancies of any DACHA homes. All 20 homes were occupied.
City staff (Foster & Garcia) declared at the October DACHA membership meeting there was a legal quorum (the rent rolls show there was not a legal quorum).
Later in 2005, the board now composed (illegally) of residents ineligible to serve broke the contract with NP. (residents cannot serve on the board if they are delinquent more than 30 days and cannot vote if they are delinquent more than 30 days).
After NP was let go things went downhill. A board were 100% of the resident members were delinquent was hardly going to pursue the other 17 members to stop their delinquencies.
On September 30, 2005 Member Delinquencies were $17,000.
By December 2007, Member Delinquencies had skyrocketed to $54,000.
The DACHATreasurer owed $4,390 dollars (Auditor missed the Red Flag Treasurer)
And the delinquencies went up and up and the board did nothing and City staff did nothing.
No housing organization in Davis would allow such abuse. No lender should tolerate such debt in an organization borrowing public funds. These levels of debt are called self-dealing transactions and related party transactions.
If the board members of the Davis Food Co-op had run up bills of $54,000 for groceries they had not paid for that is a lot of bad debt from members and the legalities do matter to me.
All worked well until the members saw making it not work well would rid them of the Co-op and allow them each to make $200,000 over time.
But to do that they had to:
illegally fire NP from monitoring them, and illegally,
Remove the one board member that kpet his eyes on the finances as he did at the DFC
allow delinquencies to go up and not fill the units
We’re all paying a heavy price for member greed and staff neglect.
David Thompson, Twin Pines Cooperative Fopundation
The Arbitrators report is the only document about DACHA where both parties agreed to the choice of arbitrator and both parties could supply materials and give testimony and both parties had the presence and particpation of their lawyers.
Even after this report approved by the Yolo County Superior Court City staff continued to meet with the illegal members of the DACHA board.
Quotes from the Arbitration Award filed with the Yolo County Superior Court in June, 2009. Quotes by Kenneth M. Malovos, the attorney jointly chosen by DACHA and Neighborhood Partners and approved by the Yolo County Court.
“What is curious is that representatives of the City of Davis were present throughout the entire time when the new Board took these untoward actions and they did little to discourage the Board”. (Page 5 of Arbitration Award)
“The testimony by three members from DACHA who appeared at the arbitration can only be described as cavalier. For the most part their testimony was characterized by failures of memory, contradictions and a certain inability to admit even their own written words. Two of theses members appear to have been in serious arrears in their fees during times that they were members of the Board, in direct contravention of the bylaws”. (Page 7 of the Arbitration Award)
When we depose people in a couple of months I expect we will harvest another basketful of tasty testimony. This week has been a cornucopia of contradictions.
David Thompson, Twin Pines Cooperative Foundation
Someone on the Davis Enterprise website–not me, I am too uncreative to post under a fake name–posed some good questions ([url]http://www.davisenterprise.com/opinion/opinion-columns/dacha-tale-is-revisionist-history[/url]) to Lou Gonzalez. Perhaps Mr. Thompson or Mr. Watkins or Mr. Gonzalez would be willing to reply to that Enterprise post: [quote] Are you the attorney for Neighborhood Partners, the for-profit affordable housing developers whose principles are David Thompson and Luke Watkins, or for Twin Pines Cooperative Foundation, the non-profit whose president is David Thompson?
Are you really saying that Twin Pines Cooperative Foundation believes that they are entitled to the twenty homes that were provided by the City of Davis affordable housing program and on which the City of Davis held the first mortgage? These houses have affordability covenants on them. The outstanding loans were worth no more than the value of these houses. There were no assets. The houses were provided at low cost to be part of the developers’ contributions to the City’s affordable housing program.
Why does Twin Pines think it is entitled to these twenty houses when the city provided them and when the City loaned the money for them? [b]Does Twin Pines want to acquire these units and strip off the affordability covenants and sell them at market rate and reap the profit?[/b] Because otherwise, there is no value in these units.
Does Twin Pines feel that they have the right to do this because Neighborhood Partners, whose principles are David Thompson and Luke Watkins designated Twin Pines, whose president is David Thompson, as the residual beneficiary? Residual beneficiary of property that is worth no more than outstanding mortgages? [/quote]
David and Luke
From my questions, I am sure that you can tell that I am quite naive with regard to matters legal and financial, so I intend no disrespect with my questions. There is one thing that I do find curious at this point. When there is the possibility of a medical lawsuit, it is not unusual for an initial offer to be made. If that offer is found wanting, it is usually countered, not just ignored. I am curious about what happened after Souza’s second email. Was a conscious decision made to not pursue a compromise solution with the city in a fashion which would have met all the legal constraints ? If so, what was the reason for not pursuing a non judicial solution ?
Rich, the only person who has said anything about the two Bad Boys wanting all of the DACHA inventory has been….Elaine. Maybe she’s got some inside scoop. When questioned, though, she refused to say where she came up with the claim.
I don’t see anything in Mr. Gonzalez’s write up that would lead anyone else even to come up with the assumption, although I wouldn’t know anything myself. Maybe if we can get a look at the lawsuits themselves we could determine something.
Other the “are you after the houses” query, what do you think represent “good questions”? Certainly not “Are you the attorney for…?” which is answered by the writer credit line. I’m sure you see that these alleged questions are really statements to suggest the Bad Boys are bad. This is a technique Sue and Elaine have carefully honed during these weeks of name-calling about DACHA.
I’m curious about the “question” on affordable covenants. Why would the city have foreclosed if the covenants stuck with the property? The city staff would have to have had remarkable short-sightedness to lock in such a covenant as part of its foreclosure. I don’t think this could be an accurate “question.” I guess we might see as this unfolds.
Dear medwoman:
Suggestions were made, for example that
– The offer had to respond to Twin Pines Cooperative Foundation’s issues
– an independent investigation should occur
– DACHA had to remain a limited equity housing cooperative as requred by
law and not just for three more years and then get turned over to
the residents (an action prohibited by law and IRS Regulations)
– TPCF had to stay as charitable beneficiary to protect the asset against
any illegal dissolution
– If you could use the $286,000 in reserves to pay our judgement why
could you not use it to cure the unneeded foreclosure
The whole thing could and should have been settled a long time ago. But solution was the furthest action from the minds of City staff.
After presumably sharing our response with City Council and City Attorney they sent him back with the same offer.
I had already gone over with TPCF’s attorney that the offer was not just unethical but was against California law. Unless that part changed there was no offer I could accept.
I have spent my whole life starting, creating and defending cooperatives.
I was not going to end my cooperative career by accepting what looked like a bribe to have me get TPCF to drop its suit about the breaking of numerous laws.
Souza and the City left me no choice. We have tried numerous other options but the City has only offered me cash and asked me to get TPCF to drop the lawsuit and get nothing.
I am ashamed of the City Attorney’s practices.
David Thompson,
President, Twin Pines Cooperative Foundation
“On April 13, 2010 my clients sent Souza an e-mail asking whether the City Council had taken any action on the DACHA matter the previous evening. The response from Souza was, “No, and I send you all my framework for a settlement with correct and updated numbers.” On April 24, 2010, my clients obtained a subsequent e-mail from Souza stating “I, not the City or Agency, put forth a framework for settlement.”
This still is very much an open question. Councilman Souza has posted his reply email, which does not the way you quote it here. In fact, he’s stated that he made it clear his “framework” was an official offer from the City Council itself via him. We’d expected to have the rest of his email exchange posted by now in order to make the setting clear.
The councilman has retracted the current council statement about WHAT the email represented (a “framework” for an offer rather than an offer). But, whether it was clearly advanced on behalf of the council (rather than coming from one member acting alone trying to get negotiations going) has not been resolved yet. I guess it cannot be answered until we see the prior email and know whose version of the “framework” email is legitimate.
From the Grand Jury report (http://cityofdavis.org/cmo/dacha/pdfs/grand-jury-report-2011-05-19.pdf) we know that over the 30+ year life of the City’s low/moderate income housing program, approximately 700 homes have been provided by developers to the City to administer, and of those, 90 currently remain in the inventory. That is roughly 13%. The remainder have been sold at market rates, most without any sort of equity restriction or share, and consequently neither the home, nor the increased value, was put to the benefit of the people of Davis as a whole, but was rather given to a few select individuals as windfall profits.
David T. or Luke, if you count the total number of homes that you helped put into cooperatives in Davis, what percentage currently remain as part of the low/moderate income housing inventory?
David,
Thank you for your response. One more point of clarification. Was the offer made to you, David Thompson, private citizen, or to you David Thompson, President Twin Pines Cooperative Foundation ? If the latter, could you not have accepted the settlement on behalf of the foundation of which you were president ?
“The remainder have been sold at market rates, most without any sort of equity restriction or share, and consequently neither the home, nor the increased value, was put to the benefit of the people of Davis as a whole, but was rather given to a few select individuals as windfall profits.”
Sue has pointed out that the city doesn’t have the staff or the funds to manage affordable housing projects, apparently suggesting that looking out for the city’s interests in the DACHA matter was beyond our capabilities. Her observation combines with your stats and my own knowledge of city staff beneficiaries of the windfalls you’ve described to make me realize Davis has no business being involved in the affordable housing business.
Thanks for the questions. Sorry cannot answer all.
SODa Justsaying here you go
SODA Believe the OpEd will be in the Enterprise tomorrow.
Justsaying Email of 4/14/ amd 4/24 headers
Subject: RE: Any announced action by Agency last night
Date: 4/14/2010 9:04:29 AM Pacific Daylight Time
From: SSouza@ cityofdavis.org
Reply To:
To: DThompCOOP@ aol.com, jeanne.jhnsn@ gmail.com, chuff@ ucdavis.edu, chuff485@ gmail.com, randombagcheck@ gmail.com, MelinaC71@ yahoo.com, lukewatkins@ sbcglobal.net
Hi David, No and I send to you all my framework for a settlement with correct and updated numbers. Thanks, Stephen
Framework for settlement – all this requires that DACHA be part of this process and that DACHA and NP agree and consent (and the city and the agency as well).
Public Posting of Framework for settlement
Date: 4/24/2010 8:18:09 AM Pacific Daylight Time
From: SSouza@ cityofdavis.org
Reply To:
To: dcgreenwald@ comcast.net
CC: chuff485@ gmail.com, randombagcheck@ gmail.com, dthompcoop@ aol.com, lukewatkins@ sbcglobal.net
Hi David, in the interest of looking forward not backward and everyone buys their peace and then walks away, I, not the City or Agency, put forward a framework for settlement. I facilatated a meetings with Cat, David and Luke to work on it. The framework is still on the table as far as I am concerned. If Cat, David and Luke think it should be made public at this time I will send it to you. Thanks. Stephen
The TPCF law suit in on our web site at http://www.community.coop/community/davis click on DACHA.
Dvvid Thompson, Twin Pines Cooperative Foundation
Let us look at two different quotes made by Louis Gonzalez:
[quote]
(as quoted in 3/12/12 Vanguard) “The supposed April 2010 “offer” to my clients was not an offer at all…”
(as quoted in 4/28/10 Vanguard) – “The [April 2010 settlement] deal was unacceptable to TPCF [Twin Pines Cooperative Foundation] because there was no assurance that the LEHC [Limited Equity Housing Cooperative] would proceed beyond three years and no way for TPCF’s concerns about DACHA’s corporate misconduct to be remedied let alone come to light or TP being re-named the charitable beneficiary. Our goal was to have a viable, properly running LEHC and the City’s offer was to buy off NP at TPCF’s concerns expense.”
[/quote]
Curiously in the 3/12/12 quote (today’s article), Gonzalez denies there ever was a 2010 offer by the City. Yet in 2010, Gonzalez concedes there was an offer made by the City, but that it was not acceptable.
Now let’s take a look at what Mr. Gonzalez’s objections to the City’s 2010 offer were. What I get out of it is that Thompson (wearing two company hats) would not have been satisfied unless there was no less than:
* $$$ for Thompson’s company NP AND $$$ for Thompson’s other company TPCF;
* AND that the lawsuit against DACHA continue unabated as punishment for perceived misdeeds;
• AND return of the foreclosed affordable housing units to the same flawed LEHC model conjured from the dead (and created by Thompson in the first place); reinstating one of Thompson’s companies (NP) as its developer/consultant and the other (TP) named as its charitable beneficiary — regardless of questions over conflicts of interest.
Now should a deal like that be contemplated in settlement by the City? I’ll let you be the judge…
INTERESTED: [i]”Are you really saying that Twin Pines Cooperative Foundation believes that they are entitled to the twenty homes that were provided by the City of Davis affordable housing program and on which the City of Davis held the first mortgage?”[/i]
JUST: [i]”… the only person who has said anything about the two Bad Boys wanting all of the DACHA inventory has been….Elaine.”[/i]
D. THOMPSON: [i]”The [April 2010 settlement] deal was unacceptable to TPCF [Twin Pines Cooperative Foundation] because there was … no way for … TP being re-named the charitable beneficiary.”[/i]
I never understood how TP fit into this before. However, that question posed by INTERESTED and the claim by David Thompson that TP would be the “charitable beneficiary” sure sounds to me like David Thompson thinks that Twin Pines should get the 20 houses that the City paid for.
[img]http://visitindianacountypa.org/wp-content/themes/indianna/images/graphics/twinpines.jpg[/img]
[quote]“… of the City’s low/moderate income housing program, approximately 700 homes have been provided by developers to the City to administer, and of those, 90 currently remain in the inventory. That is roughly 13%. [b]–Mark West[/b] [/quote] The information provided by Mark West suggests to me that the City ought to abandon the low-income housing market enitrely. It was a bad idea from the start. No economists have ever found that these schemes ever help the housing needs of low-income people as a class. (See Powell and Stringham, 2004.) And when you mix in a greedy middleman who sets up a biased scam and who is trying to suck every last dime out of the poor schlubs who got mixed up with his shady outfit, it’s no wonder the Davis program has been such a disaster.
If there is anyone left in Davis beside me who wants to help low-income residents and is not about scamming them, the most important thing we can do is encourage developers to construct more and more for-rent apartments, so that the vacancy rate rises to 5% or more and renters as a class would have leverage in negotiating their rents.
Most of the money that Davis has spent in the past for low-income programs came by way of the RDA. That source of funds no longer exists. But if the City ever has any cash and it wants to help house people who are short of funds, the City could (unless it is illegal to do so*) subsidize the market-rate rents for those down and out. The model for this notion is the same as is used with food stamps.
Lastly, if Davis has a couple of bucks left that don’t go to the lawyers over this DACHA mess, the City could do worse than helping out first time homebuyers by lending them (at a low interest rate) the cash they need to make a down payment on a house or a condo in Davis. The lack of a downpayment has historically been a big obstacle for young families to purchase their first homes. And barring a lot of foreclosures, a program like that would recycle the money, so that over time more and more families could be helped out.
*I concede I don’t know what the laws are in this respect. It makes no sense to me that the City cannot have its own housing voucher program. However, when lawyers and unions and other greedy bastards get involved, it’s not unlikely they have already made this form of helping people impossible.
To Mark West:
The GJ report does not make any mention of the homes except that there are 700 of them.
Someone should ask the City Staff to make available a master list of the 70 homes so we can look at which ones they were and what did happen to them.
From the 1980’s Luke has played the key role in housing policy for Davis through his service on the various commissions and task forces. However, his focus was mostly on the multifamily permanently affordable housing.
We left it to the City staff to monitor the single family affordable ownership program.
In retrospect that was a huge mistake.
Until I blew the whistle on the City Attorney forgetting to get the City’s share of $11 million dolars of windfall at Wildhorse there were
No income requirements
No first time homebuyer requirement
No lottery
It was just family and friends and who you knew.
After blowing the whistle on the Wildhorse Windfall, the Marden Mess, the Absentee Owners at Green Terrace, the lost income from Sharps and Flats, and on.
I always link the DACHA problem and subsequent problems to my whistleblowing.
So not knowing what is counted I cannot easily answer your question.
However, the 60 unit Dos Pinos Limited Equity Housing Cooperative still operates exactly as it did when I helped start it in 1985.
The board have followed the articles and bylaws and California law.
They have not needed any monitoring by the City.
They are not trying to get the excess equity that every limited equity housing cooperative needs to be a steward of.
They never had public subsidy and never have needed it.
Green Terrace in South Davis (sometimes called Southfield Park)was meant to be another 60 unit limited equity housing cooperative. However, at the last minute the SF developer did a switch and turned it into a limited equity condo. However, the Planning Commission required it have some of the elements of Dos Pinos. As a result, Green Terrace is the only limited equity condo in Davis, it is unlike the other condos as it is 100% owner occupied and there is a 5.5% annual cap on gain.
A study by UCD showed that Dos Pinos continues to grow in effectiveness and lower in cost while Green Terrace topped out a couple of years ago and now looms to need substantial economic support from the City for it to remain viable.
So the 120 units I have helped create all retain their capacity for permanent affordability with Dos Pinos having a much stabler future without any need for city support.
You can see the study of Dos Pinos at http://www.community.coop/davis click on RYCA and go through the documents.
David Thompson, Twin Pines Cooperative Foundation
Dear Medwoman
“One more point of clarification. Was the offer made to you, David Thompson, private citizen, or to you David Thompson, President Twin Pines Cooperative Foundation ? If the latter, could you not have accepted the settlement on behalf of the foundation of which you were president?”
As you can see from the email it was addressed to DACHA and NP. It was to talk about the NP Judgement. There was no offer of anything to TPCF except that I as part of NP was expected to get TPCF to drop its law suit (Point 3)and get nothing.
As soon as the offer appeared in my email box I looked at all the components and then called TPCF’s lawyer. I said does this not look like a bribe? TPCF’s lawyer instructed me to stay away from the offer and I’ll write you a statement to read to Mr. Souza when he comes to your home.
That deal is illegal under California law where I am the President of TPCF and would get personal funds from the City.
The offer was never changed to accomodate the legal concerns of myself as President of TPCF.
So It was never legal for me to entertain such an offer.
Hope that helps,
David Thompson, Twin Pines Cooperative Foundation
Subject: Framework for settlement
Date: 4/7/2010 5:41:44 PM Pacific Daylight Time
From: SSouza@cityofdavis.org
Reply To:
To: chuff485@gmail.com, randombagcheck@gmail.com, dthompcoop@aol.com, lukewatkins@sbcglobal.net
Hi all, in the interest of looking forward not backward and everyone buys their peace and then walks away, I put forward this framework for settlement. I will meet with you all to work on it, if you so desire. Let’s find a place and time soon! Thanks. Stephen
Framework for settlement – all this requires that DACHA be part of this process and that DACHA and NP agree and consent (and the city and the agency as well).
1. NP agrees to compromise its judgment at $300,000, as a fixed and final sum that will not be increased by interest. The $300,000 judgment would be payable as follows: DACHA agrees to ask city to provide half of the reserve fund not to exceed $100,000 to pay NP up front. DACHA agrees to add between $10 and $20 per unit per month not to exceed the maximum affordable carrying charges to pay NP over time until full payment of the $300,000. (Note NP already obtained $57,000 when it attached DACHA’s bank accounts.) At 20 units and $10 per month, NP would get $2000 per month. And would be paid off in less than 6 years.
2. NP agrees to full waivers and releases against DACHA, the city and the agency.
3. Twin Pines agrees to dismiss its lawsuit with prejudice and agrees to full waivers as set forth above. If necessary, DACHA could agree not to seek a change from the limited equity format for the next 3 years, at a minimum. This, of course, does not mean that DACHA would change its format, that the City would approve a change or that the Attorney General would approve a change.
4. Agency agrees to release the requested reserve money and to work with DACHA to put loan back in good standing. Sale in foreclosure would be cancelled upon execution of formal settlement. It would be postponed if there were agreed upon deal points.
5. All parties agree not to disparagement each other (bygones are bygones)
6. Joint statement re settlement.
If DACHA fails to pay NP over time, NP can enforce this settlement.
There would not be any additional investigation into past actions or allegations.
DACHA also signs waivers and releases, as does the city/agency.
DACHA members have a short period of time to get back in good standing (90 days, for example) or DACHA will pursue remedies, including eviction.
Councilmember Stephen Souza
23 Russell Blvd.
Davis, CA 95616
530-757-5602 (Office)
530-681-7385 (Cell)
Steinermeter now moves above $700,000 in legal costs to defend an illegal board and an ineligible membership that broke its own articles and bylaws and numerous state laws and a City staff that helped in various ways.
David Thompson, Twin Pines Cooperative Foundation
“and I’ll write you a statement to read to Mr. Souza when he comes to your home. “
Is Mr. Souza coming to my home ? Perhaps you have information that I don’t. Since I am unacquainted with
Mr. Souza personally, I was unaware of his intended arrival. Should I prepare in some way ?
And I am still confused about how you could both “have not received an offer” and “received an offer that looked
like “a bribe”. Your thoughts ?
medwoman:
Don’t worry your home home meant my home so put away the tea service.
“And I am still confused about how you could both “have not received an offer” and “received an offer that looked
like “a bribe”. Your thoughts ?”
Your question is a useful one to point out.
The offer (now confirmed as being from the City)offerred me $150,000 as part of Neighborhood Partners which seemed like a bribe to get me to have Twin Pines Cooperative Foundation drop the lawsuit.
David Thompson, Twin Pines Cooperative Foundation
medwoman: “And I am still confused about how you could both ‘have not received an offer’ and ‘received an offer that looked like ‘a bribe’.'”
David T.: “The proposal made by Council member Souza (now we learn the City) required me to engage in a self-dealing transaction, as I am a principal in Neighborhood Partners and President of Twin Pines Cooperative Foundation.”
I think it’s clear that Councilman Souza’s efforts were not presented as city offers–in fact, that was insisted on by the councilman at the time–and were not received as city offers. I support a negotiated settlement or mediation, so think Souza (with encouragement from the other council members we’ve now found out) was engaged in a worthwhile “feeling out” effort while keeping the council at arms length from it all.
What stilll confuses me and troubles me is the present council’s op-ed effort to claim Souza presented an official city settlement offer to the two men and their businesses in 2010, blaming their supposed refusal for the city’s decision to foreclose.
What was our current council thinking when they decided to go on a public relations attack that Souza had to reword a day later and now relies on an apparently fraudulent email document?
Our mayor then responds to the Vanguard’s article asking whether the city really made an offer by saying, “It’s complicated…,” and then refuses further comment. Souza fails to deliver on his promise to provide the other emails that would sow the “offer” timeline and, most telling, goes completely quiet without a word testifying to the legitimacy of his email with the alleged missing, critical words.
Then, our good correspondent, Sue–after weeks of mud-slinging on this issue–has made nary a peep while her colleague takes the heat for his memory lapses and questioned email presentation. Finally, there’s our two newest council members (both attorneys, I think) who must be wondering how they ever got talked into signing such a questionable op-ed document–and probably won’t have anything to say now that it’s been questioned and discredited.
Until someone decided it was somehow in the city’s PR interest to make a frontal media attack on the Bad Boys, all parties kept secret any efforts at negotiation–leaving Sue, Elaine and the last DACHA man standing to engage in a general, non-specific, public battle with NP/TP. While I agree that city secrecy usually is a bad approach–now, we see it contributed to a two-year misunderstanding between the parties–who came up with the strategy when the city decided to go public on DACHA?
Who drafted the op-ed, one council member or some city staffer whose been involved in past DACHA activities? Wouldn’t it have served the council well to have had a city attorney or public affairs director or SOMEONE to ask the simple question: “Before we put this out, have you all carefully checked it to make sure every word is true and that we’ve got something to back up charges that are under dispute?”
Being quiet usually is the accepted, cautious official approach. Going quiet after issuing serious public charges against city businesses is highly questionable, bad form.
Apparently Mr. Gonzalez considered there was an offer by the City in 2010 by his own words:
[quote]“The [April 2010 settlement] deal was unacceptable to TPCF [Twin Pines Cooperative Foundation] because there was no assurance that the LEHC [Limited Equity Housing Cooperative] would proceed beyond three years and no way for TPCF’s concerns about DACHA’s corporate misconduct to be remedied let alone come to light or TP being re-named the charitable beneficiary. Our goal was to have a viable, properly running LEHC and the City’s offer was to buy off NP at TPCF’s concerns expense.”[/quote]
Elaine, how many times do how many people have to say the “framework” or “offer” advanced by Stephen Souza was not seen as an offer from the city, but was being presented by the councilman on his own behalf. This has been verified by the councilman’s own contemporary email.
There is nothing in the “his own words” quote that suggests he knew Stephen’s “offer” had been ratified by the council, although the present council in its op-ed that Stephen was operating at the old council’s behest, contrary to what he wrote in his email at the time.
I haven’t spotted this wording in Mr. Gonzalez’s statement. What’s the source?
Rifkin: [i]”The information provided by Mark West suggests to me that the City ought to abandon the low-income housing market enitrely.”
[/i]
Rich, I didn’t provide the information. It was gleaned from the summary section of the Grand Jury report that the Mayor previously suggested we all read. What I provided was the link to the document on the City’s website. You are welcome to read the report in its entirety at your leisure.
The report provides a brief history of the City’s program, which I would agree was ‘bad from the start’ as you put it. The City requires developers to provide a percentage of their homes to the City at below market rates so that the City may in turn sell those homes to low/moderate income buyers, either directly, or through some intermediary. A well designed program would have some means of preventing the properties from being ‘flipped’ either through residency requirements or equity caps. From the beginning the City program had neither, and as there was no lottery or other means of equitably distributing the homes, the City staff was given the freedom to select their preferred buyers who could then resell the homes at market rates and pocket the windfall profits. That is how the program ran for the first 10 to 15 years or so.
The program was changed by the City Council to require that shared equity liens be placed on the homes such that in the event of resale at market rate, the City would recover a portion of the windfall to be used for further moderate income housing development. In the case of Wildhorse however, City staff ‘forgot’ to add the required liens, once again allowing the selected buyers (still no lottery implement) to walk away with the money.
The end result according to the Grand Jury is, of the 700 homes placed in the program, only 90 remain as low/moderate income housing.
[i]”And when you mix in a greedy middleman who sets up a biased scam and who is trying to suck every last dime out of the poor schlubs who got mixed up with his shady outfit, it’s no wonder the Davis program has been such a disaster.”[/i]
Now let’s take a look at the programs run by your ‘[i]greedy middleman[/i]’ as you put it.
Between Dos Pinos (60) and DACHA (20), David T. has accounted for 80 of the 90 homes that the Grand Jury reported as remaining in the affordable housing program (plus another 60 condo units at Green Terrace).
To recap, of the 80 single family homes incorporated into cooperative housing programs, 80 remain as low/moderate income housing.
If we subtract those 80 units from the total of 90 that the City reported to the Grand Jury, we have a remainder of 10 homes that the City can count in the City staff managed low/moderate income program.
This is complicated, so let me simplify the math.
[b]Co-ops[/b] (i.e. ‘greedy middleman’): 80 / 80 = [b]100%[/b] remain as low/moderate income housing
[b]City[/b]: 10 / 620 = [b]1.6%[/b] remain as low/moderate income housing
Now how we assess the performance of these programs depends on your definition of success.
If the goal is to maintain a stock of affordable homes for a class of low / moderate income buyers then I think success would be to maximize the size of that stock over time such that the maximum number of residents could be helped. By this definition there is little doubt which program was successful.
Alternatively, if the goal of the program is to transfer public funds into the pockets of select citizens then clearly the alternate program was the overwhelming success.
One thing I like about the DACHA mess is I think, and hope, that part of the discovery process will bring out is all of the affordable housing malfeasance committed by city staff over the years. David touches on some of it above.
(I forgot about Sharps and Flats …. adding to the affordable housing issues, I think the staff or City Attorney failed to file the Mello Roos documents on that one, costing the city millions again, or am I mixing it up with something else?)
JustSaying: [i](as quoted in 4/28/10 Vanguard) [/i]
EM quote from the previous page. No matter the source though, as most if not all the comments and commentary on this topic are/were unofficial, unsworn, and wholly useless exercises in ping-pong advocacy by the principals. Better to wait for the outcome of the court cases, where the actual decisions will be rendered based on the facts, not the hints and allegations here.
Neutral: Five sitting members of the CC filed an Op Ed piece about pending litigation, a first so far as I can recall. I think all of the facts and history are wide-open at this point, and should be explored.
I can tell you from experience on the CC that in closed session, mostly it’s a disaster in terms of getting solid reliable advice from staff, and reaching a fair outcome. THis applies to a range of issues, such as the budget mess, the water debacle, DACHA, the 2000-04 Eoff litigation that cost the City $2.2 million due to staff errors (I still have that file handy in my office, if anyone wants to see it), etc. etc. So I think this public exchange of information sheds the light of truth on what staff and some CC members want to keep hidden and bury.
The link in all of this is malfeasance by some staff, and a total failure by past and current CCs to hold them accountable. It’s why I am going to put together a “good government” package for an initiative next year. It will include an Audit Commission with teeth.
The malfeasance in the water and DACHA debacles are also why we are including in the water initiatve for the November 2012 ballot a requirement for program and fiscal audits of the suface water project going back to at least 2000.
Mark, the “case” against the greedy developers has been driven by emotional outbursts from a few folks who’ve relied on the rest of us ignoring information such as what you’ve presented. Innuendo and unsupported charges about DACHA have abounded during the past weeks. Even Rich, usually the best at doing the research and interviewing to get to his conclusions, joined in the name-calling without providing any basis for it.
[quote]EM quote from the previous page. No matter the source though, as most if not all the comments and commentary on this topic are/were unofficial, unsworn, and wholly useless exercises in ping-pong advocacy by the principals. Better to wait for the outcome of the court cases, where the actual decisions will be rendered based on the facts, not the hints and allegations here.[/quote]
The only problem is DACHA has no money to hire an attorney to defend itself or its members in court. How’s that for justice?
“No matter the source though, as most if not all the comments and commentary on this topic are/were unofficial, unsworn, and wholly useless exercises in ping-pong advocacy by the principals. Better to wait for the outcome of the court cases, where the actual decisions will be rendered based on the facts, not the hints and allegations here.”
You’ve made a good point, Neutral, about the reliability of what’s appeared so far. Most everything from those who know what happened has to be weighed with its self-serving nature out front. I do, however, expect a higher level of openness, accuracy and completeness when we come across an official document carrying unanimous consent of our city council. What a failed attempt they’ve offered us!
Now that we’re seeing the extent of the disputes, it looks as though the courtroom will be the destination. I’d hoped the parties would agree on mandatory arbitration or just settle in order to get DACHA behind us. Now that we see how inept they’ve been at dealing with “offers” or “frameworks,” it’s become obvious the big winners will be the City Attorney and Mr. Gonzalez.
[i]”…it looks as though the courtroom will be the destination.”
[/i]
At this point, given the extensive pre-trial publicity, they’d better ask for a change of venue.
“The only problem is DACHA has no money to hire an attorney to defend itself or its members in court. How’s that for justice?”
The city essentially assumed that responsibility when it foreclosed on DACHA, didn’t it. I hope the city assures the former DACHA members ultimately get fair treatment.
And, what of the attorney who represented DACHA, the one David T. claimed was being paid with–and may end up later being paid more–by city/RDA funds?
Subject: Re: DACHA TIME SENSITIVE PLEASE READ ASAP
Date: 4/12/2010 11:47:06 AM Pacific Daylight Time
From: jeanne.jhnsn@gmail.com
Reply To:
To: SSouza@cityofdavis.org
CC: DThompCOOP@aol.com, chuff@ucdavis.edu, chuff485@gmail.com, randombagcheck@gmail.com, MelinaC71@yahoo.com, lukewatkins@sbcglobal.net
I appreciate the response, Stephen. I knew you were not acting on behalf of the Council, etc. However, when I asked if the Council and City were aware of this, I was told they all knew a meeting was taking place this weekend. I respectfully put forward a similar proposal for consideration:
1. City releases $230,000 reserve monies to NP
2. The foreclosure continues
3. TP lawsuit goes away
4. DACHA is dissolved
5. Nobody talks about the settlement nor DACHA
6. These points are put into legalize and signed by all appropriate parties
I don’t think the proposal I received yesterday has enough DACHA Board votes for you to put forward.
By the way, who asked you to facilitate the meeting? I will remind you, with a smile, that no good deed goes unpunished.
Jeanne
Posted by David Thompson, Twin Pines Cooperative Foundation
A smoking gun?
David T., who is this Jeanne?
Could you guys please stop posting linked email addresses? Thanks.
Jeanne was a resident of DACHA.
She never owned a share in DACHA.
Her funds to buy a share were placed in a separate trust.
Yet she was elected to the board (against California law and the bylaws).
As this setaside of her funds is a self-dealing transaction of a board member it is I think against Davis Stirling Act.
The DACHA board was then composed of four residents of whom only one legitimately owned a share.
The illegality of this specific board is one of the causes of action in the TPCF lawsuit. http://www.community.coop/davis click DACHA.
She left the Co-op and unlike some DACHA members got her funds back because her funds were never owned by the Co-op.
David Thompson, Twin Pines Cooperative Foundation
Has anyone else beside justsaying spotted the smoking gun?
Dear Don:
I see your point.
However, the thread has been who emailed who about what. By showqing the emails as I have them I was able to show that Souza had deleted words from his before posting it.
Luke has now sent the same email (he too was a recipient) to David Greenwald as validation that the one I posted is the corredct one and the Souza one had deletions.
If you will agree perhaps from now on we can delete the info before the @ sign and just post that?
What do you think,
David, TPCF
Spammers get email addresses by using bots that go through web forums. Please just insert a blank somewhere in the email addresses. I’ve edited a few posts to do that now. Your suggestion also works. The purpose is simply to de-configure the email address. Thanks.
Mark West:
Bingo!
“Could you guys please stop posting linked email addresses? Thanks.”
Don, as an IT non-expert, I’m wondering if the linking might not be an automatic function of your website setup, like MS Word and mail programs automatically add the links when an email address-like series of letters is typed in. I’ll bet your site manager could fix this.
Let’s try:
DonS@goofytown.com
Suspicions confirmed, Don. It’s at your end.
The web site does automatically configure it. But my concern is that the spammer bots look for email addresses with the @ sign and common email addresses like gmail and hotmail without respect to that. My understanding is that it’s easy enough to disable them by adding a space. Or you see the common spelling out of @ into ‘at’.
I’m an IT non-expert, too, though.
I wonder if Stephen Souza was just trying remove some letters from email addresses, but deleted the first few letters from the body of his message text instead….
[quote]The city essentially assumed that responsibility when it foreclosed on DACHA, didn’t it. I hope the city assures the former DACHA members ultimately get fair treatment.
And, what of the attorney who represented DACHA, the one David T. claimed was being paid with–and may end up later being paid more–by city/RDA funds?[/quote]
When DACHA’s attorneys were not paid the money they were awarded, they withdrew representation. Now DACHA and its members are left completely defenseless, and the city is not helping either one. Some DACHA members have been served another set of massive discover requests…
As I have said before, DACHA members are caught in the middle of the crossfire between the City and Thompson/Watkins, and left defenseless…
[quote]Jeanne was a resident of DACHA.
She never owned a share in DACHA.
Her funds to buy a share were placed in a separate trust.
Yet she was elected to the board (against California law and the bylaws).
As this setaside of her funds is a self-dealing transaction of a board member it is I think against Davis Stirling Act.
The DACHA board was then composed of four residents of whom only one legitimately owned a share.
The illegality of this specific board is one of the causes of action in the TPCF lawsuit. http://www.community.coop/davis click DACHA.
She left the Co-op and unlike some DACHA members got her funds back because her funds were never owned by the Co-op.
David Thompson, Twin Pines Cooperative Foundation
Has anyone else beside justsaying spotted the smoking gun? [/quote]
Again holding up a specific person to public ridicule…
Including putting her email address out to the public…
“Again holding up a specific person to public ridicule…”
By “again,” I assume you mean talking about her role in DACHA in the same manner that your client, the city council and some other others have been talking about David T. and Luke? Is that the kind of “again” you mean? What do you see that ridicules Jeanne Whatsername, anyway?
Who started out posting emails without getting permission from addressees? Councilman Stephen Souza. Whose arguably fraudulent email copy required others to post their versions? Councilman Stephen Souza.
Are you suggesting the leadership people involved in the DACHA debacle have some expection of privacy for their roles? Maybe you should have spoken earlier to our elected city leaders, particularly…Councilman Stephen Souza. You remember him, the one who (along with Sue, I’d guess) likely talked their colleagues into going into public attack mode, assuring them that they had the evidence to convince the citizenry that the Bad Boys were bad.
I don’t want to sound unsympathetic about people getting caught up in the PR war declared by the Davis City Council, but we can blame Councilman Souza for this specific one. Remember, he promised to post the rest of the emails as soon as he found them. Should we assume he’s still looking and has been too busy to keep us informed about his lack of progress.
Shame on him for dropping this stuff in the public square, misrepresenting the significance of what he had and then hiding out while the collateral damage rumbles around him.
Before you get too offended, Elaine, consider how Jeanne W. got drawn into this discussion. The Council claimed that NP/TP’s refusal of an official “offer” acceptable to the City and to DACHA was the cause of the City’s foreclosure act. Councilman Souza then “proves” this charge with his email posting and comments, promising more proof to follow.
Faced with the Council’s op-ed charges and the 2010 email evidence, NP/TP posts their copies of the “same” email, which indicate that two Council charges are false. Three days later, still no Souza posts to support the claim that DACHA had accepted the “city offer.” So, David T. posts his copy of Joanne W.’s response, proving (among several very fascinating things) that DACHA did NOT agree and, furthermore, had been told by Souza that his concept/offer/framework was NOT from the council.
I know you’re aware that many folks have contributed to the DACHA mess, including (to some degree we don’t yet know) the DACHA board members. I don’t think anyone involved should get a pass.
But, I look first to the city government to do its job when it approves a city supported project. That responsibility includes not starting out approving a “failed model” and it includes continuing oversight to assure fair treatment of program participants and continuing success of the project.
The biggest failure here is by the people who had the most power to act at every step, our city staff and and council. For them to now abdicate and try to point the finger away from themselves is just a bush league approach to governing.
Cat Huff (President of DACHA) told us in early 2010 that Hefner were going to stop representing DACHA because Hefner was owed money and DACHA could not pay them.
Then on April 22, 2010, the bankruptcy case popped up and Hefner asked Harriet Steiner if we can get paid we’ll take the case on.
Then on April 23, 2010, Hefner asked the City to turn over funds to Hefner.
Then Danielle Foster of the City of Davis sends $30,000 to Hefner.
And the City Attorney claims $430,000 is all they spent on DACHA.
And the City Attorney announces at a Council meeting that DACHA could not use borrowed public funds to pay for lawyers.
DACHA lists that they owe Hefner $37,000 and they owe the previous law firm $93,000.
We have our problems with DACHA’s bill paying but why would any other lawyer represent DACHA when they owe their last two law firms
$130,000.
Is this how our public funds should be spent?
David Thompson, Neighborhood Partners, LLC.
[quote]By “again,” I assume you mean talking about her role in DACHA in the same manner that your client, the city council and some other others have been talking about David T. and Luke? Is that the kind of “again” you mean? What do you see that ridicules Jeanne Whatsername, anyway? [/quote]
No, I am talking about leveling specific allegations against a particular person by name (Thompson did this once before in the Vanguard and Don Shor pulled the name), holding that person up to public ridicule. Also Thompson has falsely accused all DACHA members as being “deadbeats”. It is unacceptable…
Thompson also is a specific person. You and others have leveled specific allegations against him by name. What allegations has he leveled that you think hold her up to public ridicule, which was your charge yesterday? You identified David Thompson be his full name.
David T. did not indicate Jeanne except by her first name–what is wrong with this? In fact, what is the problem in any case–Councilman Stanley Souza spilled the DACHA beans and people involved in the discussions first, right? Did you citicize his actions? Of course not, wouldn’t advance the continuing effort to vilify NP/TP.
How about focusing on the facts of the case instead trying to muddy reputations without providing evidence? Did you read Jeanne’s 2010 email? Do you see how many ways it contradicts the City Council’s op-ed charges? Do you see how it supports what David T./Luke’s have said here for weeks? And how it further discredits Councilman Souza’s unsupported claims about what happened in 2010?
“Also Thompson has falsely accused all DACHA members as being “deadbeats”. It is unacceptable.”
I don’t know about whether “all” DACHA members were called “deadbeats,” but certainly many were and still may be. This issue was thoroughly hashed out weeks ago, but please review the grand jury report summary several posts before this. The ground jury investigated and certified many members’ deadbeatness, right? It’s a shame that these folks couldn’t or wouldn’t pay their DACHA bills, but them’s just the facts.
If they weren’t being subsidized by our tax money, and it they weren’t partially to blame for DACHA’s very public failure, they wouldn’t be involved in the public discussion. But they were, and it’s acceptable and very appropriate that they are. Your own client has been very public in advancing his view of DACHA’s failure and hasn’t hesitated to citicize others in much nastier words.
[quote]David T. did not indicate Jeanne except by her first name–what is wrong with this? [/quote]
Her email address gave her full name…
[quote]you and others have leveled specific allegations against him by name. [/quote]
What “specific allegations” have I “leveled” at Thompson, as you put it? That the DACHA business model was flawed? I would say the proof is in the pudding – it failed bigtime, and for some pretty obvious reasons, not the least of which is the City failed to supervise Thompson. Furthermore, my statements have been ONLY IN RESPONSE to allegations made by David Thompson against DACHA members. And I have never called anyone NAMES, which is more than Mr. Thompson can say (“Deadbeats for Dollars” comes to mind). DACHA members are supposed to stand by and be villified in the media/at CC meetings without answering scurrilous charges leveled against them? DACHA members had been completely silent since the inception of these lawsuits, saying nothing publicly, while David Thompson/Luke Watkins smeared DACHA members in public over and over again. Not until I became tangentially involved in this case, have DACHA members been able to come forward and defend themselves at all against such an ugly and unconscionable onslaught. Are you trying to say that DACHA members should have kept their lips zipped and remained completely silent and just put up with the outrageous charges made against them by Thompson/Watkins and their attorneys? That only David Thompson and company have a right to express an opinion?
[quote]What allegations has he leveled that you think hold her up to public ridicule, which was your charge yesterday? [/quote]
Self-dealing…
[quote]How about focusing on the facts of the case instead trying to muddy reputations without providing evidence? [/quote]
I’m assuming you don’t think the DACHA model was flawed? That the city did not need to supervise Thompson? Is that the position you really want to take?
Elaine: There are a lot of assertions being made, such as the model was unique or flawed. I prefer that we prove our allegations rather than assume them.
[quote]Elaine: There are a lot of assertions being made, such as the model was unique or flawed. I prefer that we prove our allegations rather than assume them.[/quote]
FACT: the model failed miserably. FACT: the entire mess has ended up with two lawsuits. FACT: no one will come out the winner here. If the model had been set up properly, no such thing would have happened, bc there would have been proper safeguards in place, no? That is what good contract law is all about…
I’m willing to accept that the application of the model failed miserably, but I have seen no evidence offered that those failures are endemic to the model. How do you explain Dos Pinos which has a similar structure and yet has worked for 25 years or so?
[quote]“I’m assuming you don’t think the DACHA model was flawed? That the city did not need to supervise Thompson? Is that the position you really want to take?”[/quote]I don’t know what was “flawed” about “the model.”I know that the distinguished attorney who represented the city on the board for awhile made that comment, and Sue has picked it up and used it repeatedly without even trying to justify the observation. I just realized I’ve been using “failed model” for sometime (inaccurately quoting Sue); it certainly was a failed project.
This type of project has been successful around the country, from the online reading I’ve done What does “flawed model” mean, anyway? Why would our City Council approve something with a history of being a “flawed model”? Sue claims now that she was against it before she voted for it.[quote]“If the model had been set up properly, no such thing would have happened, bc there would have been proper safeguards in place, no? That is what good contract law is all about…”[/quote]I don’t know how you know what would or would not have happened if DACHA had been set up differently. We do agree that the city should have been on top of this both before NP/TP was sent packing–what, five years ago?–and ever since.
What we don’t agree on is the effort to paint NP/TP as money-hungry thugs who alone are responsible for DACHA’s failure–while ignoring the role of the DACHA members and the city staff (who both tried to get the co-op dissolved so that individuals could buy the co-op’s properties at a low price. This is now on the record in at least two documents prepared by a DACHA rep and the city staff, along with the constant chatter from David T[quote].”Are you trying to say that DACHA members should have kept their lips zipped and remained completely silent and just put up with the outrageous charges made against them by Thompson/Watkins and their attorneys?”[/quote]I’m not trying to say any such thing. People can say what they want to. I just was responding to you saying “unacceptable” to labeling DACHA members who failed to pay their bills as “deadbeats.” I wouldn’t say you were a hypocritical yellow-livered polecat, but I just thought you made an odd contention re. the D-word, considering all of the name-calling that’s been going here. And, I may have painted you with the same brush as your client and Sue when you actually were more kind, tossing in those odd questions the way you did.
And, speaking of Sue Greenwald, have you heard anything about why she signed on to the op-ed hit piece, then disappeared from the Vanguard along with the Mayor and Stephen Souza? Given the apparent phony email that was posted
[quote]“David T. did not indicate Jeanne except by her first name–what is wrong with this?”
“Her email address gave her full name…”[/quote] Now that I look more carefully, I can figure out what her full name is even if her email address does not give her full name. Of course, I got this (jeanne.jhnsn(AT)gmail.com) from Stephen Souza’s posting the first day.[quote]“What allegations has he leveled that you think hold her up to public ridicule, which was your charge yesterday?”
“Self-dealing…”[/quote]I don’t see where David T. is guilty of saying Jeanne was “self-dealing.” In response to my question about who she was, he wrote”[quote]“Jeanne was a resident of DACHA.
She never owned a share in DACHA.
Her funds to buy a share were placed in a separate trust.
Yet she was elected to the board (against California law and the bylaws).
As this setaside of her funds is a self-dealing transaction of a board member it is I think against Davis Stirling Act.
The DACHA board was then composed of four residents of whom only one legitimately owned a share.
The illegality of this specific board is one of the causes of action in the TPCF lawsuit. http://www.community.coop/davis click DACHA.
She left the Co-op and unlike some DACHA members got her funds back because her funds were never owned by the Co-op.”[/quote]
Elaine, on 18th reading, I finally see how you interpret the charge of self-dealing because “her funds to buy a share were placed in a separate trust.” I’d assumed this trust was set up by DACHA before she started serving as a board member. But, the word and implication is there.
The questions we should be dealing with in my opinion, however, is whether Joanne was operating legally, the board was operating legally and the city staff was doing its due diligence watching all of this play out and pumping tax money to the likely illegal DACHA board operation.
Since this “loan” is the thing the city was trying to “protect” by choosing to foreclose on the co-op, it’s not as though Joanne, the DACHA spokesperson, gets the level of privacy you suggest she should when she was actively involved in the “framework” discussions with Concilman Souza.