Because of the missed deadline, Stanislaus County supervisors will vote during their Aug. 21 meeting on whether to continue working with PCCP West Park developer Gerry Kamilos, according to District 5 Supervisor Jim DeMartini, a West Park critic whose district includes the West Side.
“I think the board has enough egg on its face now that it’s going to have to face reality,” DeMartini said.
Other supervisors — including stalwart West Park supporter Dick Monteith, who was on vacation — could not be reached for comment this week.
Kamilos, who also could not be reached for comment this week, said July 18 that he was working with investors and attorneys to secure the deposit, which would pay for environmental studies and an airport land-use plan.
He said at that time that his company, West Park Holdings LLC, had recently negotiated an agreement to take over the project from the legacy company left in the wake of the failure of its former financial backer, Lehman Bros.
The legacy company kept ownership of the project when Lehman Bros. declared bankruptcy, preventing Kamilos from seeking funding alternatives but also preventing the project from being funded by the bankrupt company, according to the developer.
He has blamed West Park’s failure to meet project deadlines on its backer’s collapse and on an unsuccessful lawsuit filed by the City of Patterson in 2008 regarding the county’s selection of a master developer and project description before an environmental impact report was completed.
County supervisors have granted Kamilos two project extensions to give him more time to complete West Park’s environmental studies. They initially voted in 2007 to give him exclusive negotiating rights to develop the former U.S. Navy airfield in Crows Landing.
The extensions were approved in March 2011 and in June.
A couple of supervisors said they were convinced to support the most recent extension when West Park investors placed $1 million in a trust account June 18 and pledged to the county to provide a full $2.75 million deposit July 10. As of Wednesday, Aug. 8, the county had not received any of that money.
County CEO Monica Nino warned Kamilos in a letter July 11 that the county would consider terminating its agreement with him if the $2.75 million was not in its treasury by the end of that day. Her letter also noted that the county’s contract agreement with Kamilos, either the county or the developer could terminate the contract “for cause” after a 30-day wait. That waiting period ends today, Aug. 9.
Kamilos said last month that he expected to get the deposit into the county before the 30 days was up.
However, Stanislaus County Counsel Jack Doering said Wednesday that doing so might not make a difference. Kamilos already has breached his contract with the county by missing the July 10 deadline, and Doering said it is his legal opinion that the developer cannot cure that breach even by submitting the deposit within 30 days of the missed deadline.
The deadline was particularly important, Doering said, as the promise of turning in the $2.75 million on time was a material inducement that persuaded some supervisors to vote in favor of granting Kamilos an extension last month.
“No one expected a breach, particularly of that provision,” Doering said.
He noted that Kamilos had told the board during its June 19 meeting that Lehman Brothers had nearly finalized an agreement to release its interest in West Park, when in fact that did not occur until July 9 — a day before the deposit was due.
He also said that Kamilos indicated during the meeting that he was well aware that supervisors could seek other alternatives for developing the airfield if he missed the July 10 deadline.
County officials recognized in June that Kamilos was already under a tight deadline to get his environmental impact report completed by Jan. 31, and it now appears he is at least two months behind schedule, Doering said.
Even if the money were deposited this week, DeMartini said Monday that he thought it would be impossible to complete an environmental impact report on time.
“Generally speaking, the board’s got to realize that this project is not going to happen,” he said.
While Monteith could not be reached this week, he has said in the past that Kamilos could not control the downturn in the economy, describing the developer as a visionary. He suggested that the project could be a boon for an area that suffers from high unemployment.
Kamilos’ West Park proposal would entail building a 2,930-acre industrial park on and around the 1,528-acre former Crows Landing naval airfield between Fink and Marshall roads south of Patterson. It would include a 250-acre solar energy facility and a 157-acre inland port connected to the Port of Oakland by two trains each day.
The most recent figures from Kamilos indicated that the project would provide 13,000 permanent jobs and 3,000 temporary construction jobs.
Doering said that supervisors are not obligated to end their contract with Kamilos after last month’s breach, but at this point, the onus will be on the developer to persuade them otherwise, he said.
“Can he still pull it off? I guess that’s up to Kamilos to convince the board that he can do it,” Doering said.
Contact Jonathan Partridge at 892-6187, ext. 26, or firstname.lastname@example.org.