Others Present: Pasmant, Alvarez-Glasman, Bachman, Freeland, Yauchzee, Chung, Lee, Rush
ORAL COMMUNICATION John Scheuplien, West Covina resident, supported the developer’s request for an extension.
Mayor Pro Tem Herfert requested a staff report before continuing with further oral communications.
Request by Hassen Imports Partnership and West Covina Motors, Inc. to Extend the Completion Date of the Hummer Dealership by 90 Days to June 15, 2006
Finance Director Bachman presented the staff report, which briefly outlined the background and scheduled timeframe surrounding the project.
Mayor Pro Tem Herfert inquired for clarity, what will happen to the $3.5 million sales tax incentive that Mr. Alhassen would receive, if the development of the dealership is not complete by the scheduled date of March 15, 2006, and the Council does not grant an extension.
City Attorney Alvarez-Glasman stated the amount would not be due or owed. Mayor Pro Tem Herfert inquired about all debts prior to that date and Mr. Alvarez-Glasman stated the debts would be collectible.
Councilmember Touhey initiated discussion regarding a default in sales tax revenue outside the current agreement but related to the same ARDDOPA, building permits, and whether the developer is required to pay prevailing wages. Mr. Bachman responded to the default and stated the City had been waiting for documentation from the developer to justify any offset to the debt and to date the City has not heard from the developer and the debt is owed.
Norman Hoffman, representing Mr. Ziad Alhassen, stated that Mr. Alhassen would not be in default on March 15, 2006, due to a provision within the ARDDOPA, which provides for the extension of completion in the event of occurrence of force majeure. Mr. Hoffman elaborated on the events beyond the developer’s control. Mr. Hoffman also addressed the issues of default, a variance request regarding the readerboard and issues of prevailing wages.
City Attorney Alvarez-Glasman explained the force majeure concept as a common law concept that is presented for extensions of time for delays due to circumstances beyond control and triggering events. It is the position of the City that the delays are within the control of the developer.
City Attorney Alvarez-Glasman suggested the City Council, unless they grant the extension, receive and file the report.
John Shewmaker, West Covina resident, acknowledges positives of the developer, but does urge Council to hold the developer to his agreement.
Herb Redholtz, West Covina resident, supported staff recommendation to deny any extension.
Katherine Castucci, West Covina resident, supported the denial of the requested extension.
Discussion ensued regarding sales tax generated from all dealerships. Mr. Bachman stated sales tax generated cannot be publicly disclosed.
Mr. Hoffman approached the podium and addressed retail sales pertaining to Clippinger Chevrolet. Councilmember Touhey requested a copy of a memo from the State Board of Equalization regarding an audit of the sales tax allocation between the City of West Covina and Covina in respect to the dealership’s relocation.
Motion Motion by Herfert and seconded by Touhey to receive and file the report.
Following further discussion regarding the obligation of the developer, Mayor Pro Tem Herfert called for the question.
