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Davis, California

Monday, April 15, 2024

City council approves DACHA dissolution

On Feb. 7, the Davis Area Cooperative Housing Association (DACHA) moved one step closer to dissolution and deeper into controversy when the Davis City Council approved DACHA’s application for dissolution in a 4-1 vote.  Now the decision has been passed on to the attorney general, lengthening a process that began on April 5, 2011.

DACHA was created in 2002 to provide affordable home ownership in Davis. It is one of Yolo County’s 30 cooperatives, or legal entities owned and democratically controlled by their members. DACHA is a limited-equity housing cooperative, meaning that shareholders must sell at a very low price when they move out.

Members of the co-op must also meet a maximum income requirement to buy in, which is 120 percent of the Yolo County median income. The maximum income to buy a share for a four-person household is $72,550. DACHA was modeled after the Dos Pinos Housing Cooperative on Sycamore Lane, the only other limited-equity housing cooperative in Yolo County. There are about 20 homes in the cooperative.

The controversy, known to some as the “DACHA mess,” began when DACHA decided to seek dissolution. They did this after Neighborhood Partners LLC, the developer that created DACHA, emptied the co-op’s remaining assets after winning a lawsuit against them for illegally terminating their contract.

Now, the Twin Pines Cooperative fund, nationally esteemed for its leadership and development of 32 cooperatives since 1964, has filed a complaint against DACHA’s application to dissolve and the city’s approval of it.

David Thompson, president of the Twin Pines Cooperative Foundation and Neighborhood Partners, said that the city council should never have been able to make the decision for DACHA to dissolve because the unsettled lawsuits biased the city’s judgment and resulted in a conflict of interest.

The city council can only make a recommendation to the Attorney General’s Office on whether dissolution is appropriate.

Thompson, who helped fund DACHA at its start, told the city council at its Feb. 7 meeting that “DACHA has become a landmark case of the largest looting of a limited-equity cooperative in the nation and [its] neglect of its corporate responsibilities as a public benefit corporation, the breaking of articles and bylaws and state laws, make DACHA the poster child of a board gone bad.”

Thompson also told the council that DACHA violated California state law in 2005 when its members asked to own their homes. Thompson’s urge for the council to reject DACHA’s application for dissolution was accompanied by about 20 other Davis residents and friends and family of Thompson.

“Not only does DACHA need to pay Twin Pines the money it owes from start-up funding,” Thompson said, “but it also needs to stop trying to make a profit off of a non-profit cooperative by dissolution.”

During public comment, Elaine Roberts Musser, DACHA’s attorney, told the city council that its job was not to put DACHA on trial, but to process the dissolution application.

“There is absolutely no legal basis upon which the city could refuse to make a finding that DACHA has not met all the requirements of California Civil Code 8172,” Roberts Musser said. “DACHA has done everything that is legally required and then some.

“DACHA may not even be subject to (the civil code’s) provisions; it is very likely that DACHA can dissolve of its own accord without the city’s permission.… What is important now is for the city to do what it is legally required to do.”

Other speakers began a discourse about another lawsuit against the city for the misuse of public funds.

“Three quarters of a million dollars of public money has been squandered on legal fees attempting to defend an untenable position,” Davis resident Brian Johnson told the council.

The situation is left unresolved, with an indeterminate timeline of the attorney general and two strong opposing forces: Twin Pines, other cooperatives, and some residents who believe that DACHA should be denied dissolution and pay back the money it owes to Twin Pines and the side of the DACHA leadership, occupants, the city council majority and other residents who feel that dissolution is permissible and the first step to overcoming and moving on.

SARA ISLAS can be reached at city@theaggie.org.


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