Neighborhood Partners and Twin Pines Cooperatives refused Davis City Council’s settlement offers last week, their president David Thompson calling the offers inadequate briberies.
The settlement offers came in April 2010 for $300,000 and in January of this year for $280,000, according to the City Council. They aimed to resolve the conflict between the city, Davis Area Cooperative Housing Association (DACHA) and the two organizations.
The controversy, known to some as the “DACHA mess,” began when DACHA decided to seek dissolution. They did this after the Twin Pines Cooperative fund (TPCF) and Neighborhood Partners LLC, the developers that created DACHA, emptied the co-op’s remaining assets after winning a lawsuit against them for illegally terminating their contract. 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.”
Now both organizations are suing the city for approving what they consider to be DACHA’s unlawful dissolution. The city is trying to settle before the lawsuit falls into the courtroom.
Thompson denied that two settlement offers were made, saying that the first was only a part of an informal conversation with Councilmember Stephen Souza as an individual.
Despite the City Council’s use of the two formal offers as evidence in recent court proceedings, a series of e-mails between Thompson and Souza show Souza speaking as an individual.
“Hi Jeanne, just so you know I was not acting on behalf of the City Council or Redevelopment Agency,” Souza wrote in an e-mail to Jeanne Johnson, a former DACHA board member. “I was asked to facilitate a meeting between the parties (DACHA and NP), I put forward a framework for settlement as a starting point that I thought might be acceptable by all parties (City, DACHA, NP).”
The later January offer did not satisfy Twin Pines’ lawsuit against the city of Davis and DACHA, Thompson said. The offer excluded Twin Pines, despite the fact that the suit was for breach of contract and breach of governing documents and other things involving both organizations.
“The settlement felt like a bribe and puts me in a conflict as I cannot be a part of the settlement where I have personal gain at the expense of the nonprofit organization I am on the board of,” Thompson wrote in an e-mail. “Any settlement must take into account TPCF’s claims.”
If the City Council and the organizations cannot reach a settlement, the Twin Pines lawsuit is scheduled to go to trial in October and the Neighborhood Partners lawsuit in April 2013.
“Both parties would be open to settling the lawsuits, if the settlements proposed by the city for each entity sufficiently address the concerns raised in each of our lawsuits,” Luke Watkins, part owner of Neighborhood Partners, wrote in an e-mail last Tuesday.
Councilmember Dan Wolk, heading the DACHA case, declined to comment on whether the City Council would consider changing their settlement offer.
SARA ISLAS can be reached at firstname.lastname@example.org.