UPDATE: West Park developer misses deadline for $2.75 million deposit
by Jonathan Partridge | Patterson Irrigator
Jul 16, 2012 | 3150 views | 0 0 comments | 9 9 recommendations | email to a friend | print
The remnants of the Crows Landing Air Facility's former air traffic control tower overlooks the former U.S. Navy airbase, which developer Gerry Kamilos hopes to turn into an industrial park and an inland hub for the Port of Oakland. Kamilos missed a deadline this week for turning in a $2.75 million deposit, though he said he hopes to have it turned in soon. Meanwhile, Stanislaus County's legal counsel has drafted a notice of breach of contract in response.--Photo by Lisa James/Patterson Irrigator
The remnants of the Crows Landing Air Facility's former air traffic control tower overlooks the former U.S. Navy airbase, which developer Gerry Kamilos hopes to turn into an industrial park and an inland hub for the Port of Oakland. Kamilos missed a deadline this week for turning in a $2.75 million deposit, though he said he hopes to have it turned in soon. Meanwhile, Stanislaus County's legal counsel has drafted a notice of breach of contract in response.--Photo by Lisa James/Patterson Irrigator
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JULY 18 UPDATE: Stanislaus County supervisors met in closed session Tuesday, July 17, to discuss their legal options after developer Gerry Kamilos failed to make a required $2.75 million deposit for the proposed PCCP West Park project by the July 10 due date.

No announcement came out of the meeting. However, Supervisor Jim DeMartini, a project critic, said he was "pretty happy" about the closed session and said it was likely that the board of supervisors would vote during their Aug. 21 meeting on whether to continue working Kamilos.

County CEO Monica Nino had previously warned Kamilos in a letter July 11 that the county may terminate its agreement with Kamilos if it did not receive the $2.75 million in its treasury by the end of that day. As of Wednesday, July 18, that money still had not been deposited.

Under the contract agreement with Kamilos, either the county or the developer must wait 30 days before either party can terminate the contract "for cause."

Kamilos said Wednesday that he expects to have all the money to the county by the end of that 30-day window. He and investors were working "seriously and diligently" to make that happen, he said.

Regardless of whether the money is in by that time, supervisors will have the option to vote once again whether they want to continue with Kamilos at that time, because the contract has been breached, county counsel has said.


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JULY 16 UPDATE: County officials still had yet to receive a $2.75 million deposit for the West Park project as of Monday afternoon, July 16, though West Park developer Gerry Kamilos notified the county that he was meeting with investors and attorneys Monday after hashing out an agreement over the weekend, said Keith Boggs, assistant executive officer for Stanislaus County.

The board of supervisors will attend a special closed session meeting at 5:30 p.m. Tuesday, July 16, to discuss their legal options after Kamilos missed a contractual deadline July 10 for making the deposit.

In the meantime, county officials are taking a wait-and-see approach to the matter.

"“We’re in a tread water position today, waiting to see how this all ferrets itself out,” Boggs said.


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The developer of Crows Landing’s proposed PCCP West Park industrial center failed to make a required $2.75 million deposit with the county that was due Tuesday, July 10, leading Stanislaus County CEO Monica Nino to send him a breach of contract notice.

Developer Gerry Kamilos had pledged to deposit the money to complete project-related environmental studies and to help develop the former Crows Landing naval air facility as part of an agreement with the county that supervisors approved along with a seven-month project extension June 19.

Kamilos said this week he hoped the deposit would be ready soon after his company, West Park Holdings LLC, negotiated an agreement with Lehman Brothers’ legacy company at about 2 p.m. Tuesday, July 10, to obtain full ownership of the project.

“I think it’s just a matter of a few days,” he said. “The major step here is the Lehman agreement, and we’re now able to move ahead with full control.”

The developer has been working for months with the bankrupt company, which was West Park’s former financier, and he said he faced further delays last week because some key signatories were on vacation. He said his investors are looking over paperwork now that the deal with Lehman Brothers has been approved, and he expects them to come forward within a few days, though it has yet to be seen what that means for the county.

“He’s breached the agreement, and whether or not depositing it makes it right or not, I don’t know,” Stanislaus County Counsel Jack Doering said Tuesday.

Doering described the matter as a technical breach, and he said supervisors could vote to end their relationship with Kamilos if they chose, though he was aware Kamilos is trying to remedy the matter. Doering was not sure whether the board would discuss the matter or how that may come about if they do, indicating he had more questions than answers.

“Let’s wait and see how things shake out,” he said.

Keith Boggs, an assistant executive officer for Stanislaus County who has worked on the West Park project, could not be reached for comment Wednesday.

Kamilos’ proposed West Park project 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.

The project would include a 250-acre solar facility and a 157-acre “inland port,” where two trains each day would carry goods to and from the Port of Oakland.

Most recent figures from Kamilos indicate that the project would provide 13,000 permanent jobs and 3,000 temporary construction jobs, a vast reduction from his initial plans to create 37,000 jobs on 4,800 acres.

Kamilos received board approval in 2007 to negotiate exclusively with the county to develop the Crows Landing Air Facility. Since that time, the board of supervisors has given him two project extensions — once in March 2011 and then again last month.

Kamilos blamed initial delays on the downturn in the economy and an unsuccessful lawsuit filed by the City of Patterson regarding the county’s selection of a master developer and project description before an environmental impact report was completed. He said more recent delays stemmed from the fact that Lehman Brothers’ post-bankruptcy legacy company had retained the project, preventing him from seeking funding alternatives but also preventing the project from being funded by the bankrupt firm.

At the same time, Kamilos faced lawsuits from contractors demanding payment on various projects, including West Park, though he said last month he was working out those issues.

Despite such financial difficulties, the county received a letter from a Roseville attorney representing one of Kamilos’ investors pledging $1 million on June 18 to ensure that the environmental review process would be completed by Jan. 31. While that money was placed in a trust account on June 18, Kamilos said Wednesday that the county has yet to receive any of it, though he soon hoped to have all $2.75 million in the county’s hands.

For project critics, including Supervisor Jim DeMartini, Tuesday’s missed deadline was the last straw.

“It’s time to just pull the plug on him and start over again,” DeMartini said Wednesday afternoon.

DeMartini has repeatedly chastised Kamilos for missing deadlines and has criticized him for having no successful major industrial projects that are up and running. The supervisor’s district includes the West Side, where many people have expressed concerns about the project’s size, the impact of increased trains on the region and various environmental issues.

DeMartini said he would encourage the Stanislaus County Civil Grand Jury to look into the matter if the county allows him to move forward with the project.

“I think a full investigation is really in order,” he said.

Supervisor Dick Monteith, a stalwart advocate for the project up until this point, said Thursday that he hoped Kamilos would provide the money and that the project would move forward. However, he said the board needed to find out what their legal options were and the county needed the $2.75 million deposit.

"I will say this, without the money, there aren’t many options," he said.

Despite this week’s setback, Kamilos remained optimistic, saying he already had a team of consultants ready to complete environmental studies for the project by the Jan. 31 deadline.

“There’s been a long partnership with the county, and we’ve achieved quite a bit, and I fully intend for this project to reach its full development,” he said.

• Contact Jonathan Partridge at 892-6187, ext. 26, or jonathan@pattersonirrigator.com.

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