Calexico OKs settlement

May 01, 2002|By AARON CLAVERIE

Staff Writer

CALEXICO — An Applebee's Neighborhood Grill & Bar and new hotels might be built here soon now that the City Council has voted unanimously to approve a settlement with Calexico landowner Raul Estrada.

The council had rejected versions of the agreement at two previous meetings. Drafts of agreements contained language that would have forced the city to make sure Estrada received $10 per acre for land north of the Calexico 10 theater complex he hopes to sell to a hotel developer and a restaurant francishee.

At meetings when those drafts were discussed, area businessmen including Hometown Buffet owner Carlton Hargrave and Heber-based Steve Scaroni argued the agreement would be costly for the city.


According to the agreement approved Tuesday:

· Estrada will not sue the city for paving a .73-acre sliver of his land before the title was deeded to the city.

· He will "convey" acreage to the city so it can construct extensions to Fiesta and Robinson roads.

Fiesta will run north-south just behind the theater. Robinson will run east-west to connect Fiesta with Scaroni Road. "Convey" is in quotes because that was the language included in the agreement. There was discussion during the meeting as to whether Estrada was "donating" the land to the city or "obligated" to provide the land.

· The city will use roughly $550,000 in Measure D funds to pave the streets on that land and construct the intersection, according to City Attorney Michael Rood.

· If Estrada sells his land to the hotel and restaurant developer for $8 a square foot and those developers open businesses there, Estrada will not be obligated to pay for the roads. There has been talk of an Applebee's Neighborhood Grill & Bar opening near the theater plus a Hilton or Holiday Inn hotel, or both.

· If the land sale falls through or the developers don't build there, Estrada will be obligated to pay back the city for the cost of the roads.

· If the sale goes through and the developers build there, the city will pay Estrada $100,000 for the hotel, $100,000 for the restaurant and $50,000 for a second hotel. The total cost to the city — $250,000 — is roughly the same amount that Estrada's attorney had said the city could have lost if his client had decided to file a lawsuit.

The $50,000 price for the second hotel was sliced from $100,000 after last-minute negotiations between the council and Estrada's attorney.

Before the council went into closed session to discuss the agreement, city Treasurer Rudolfo Moreno blasted city staffers and the council for not providing him a copy of a 1998 security agreement addressed in the settlement agreement the council was getting ready to discuss.

"I have still not received copies of that agreement and I would like to know why," Moreno said.

Interim Redevelopment Agency Executive Director Ralph Morales said, "We're currently pulling that information."

Moreno said he requested it about a month ago. He asked new City Councilman Alex Perrone if he had seen the security agreement.

Perrone said, "No. I would like to see the agreement."

Moreno said, "(The new councilmen) should be aware of this before they go into closed session."

City Planning Commissioner Arturo Selwick said talk of Estrada "donating" the land for the new streets was semantically incorrect. He said Estrada is obligated to pay for the improvements like any developer would be.

Regarding the new councilman not having seen the 1998 agreement, he said, "I don't think it's fair to the inhabitants of this city."

After the council met in closed session for more than a half hour, Moreno launched into the council again.

He asked, "What is this agreement (the 1998 security agreement)?"

Rood explained, "There was a fear at the time that the value of land …"

Moreno cut him off and said, "Do you know what the agreement is? It appears that you don't."

Estrada attorney John McClendon told Moreno what the agreement entailed but Moreno cut him off.

"I don't want to hear it from him!" he said.

Quickly taking a different tack, Moreno asked the council how much the settlement agreement would cost the city. Rood said the agreement contained all the financial numbers.

"Yeah, but how much? What's the total amount?" Moreno asked.

Rood said he could add up the numbers.

"I don't want to take the time to add. I think you people should know," he said.

According to figures tabulated by Rood after the meeting, the city would be out $800,000 if two hotels and the restaurant start operations here. If Estrada is not able to sell his land and the developers don't build, the city would be out nothing because Estrada would be forced to pay $550,000 to reimburse the cost of street improvements and the lawsuit would be settled.

After listening to Moreno, hotel developer Herb Meyer said Moreno should be asking how much it would cost the city not to have the projects. Meyer pointed to property, sales and transient occupancy taxes the projects would bring.

Moreno told Meyer the new business would not really be new and would instead take money from existing eateries and hotels.

Perrone jumped into the fray and said, "I think the new projects will bring in new business or take away business from hotels in Mexicali. That's the business we'll be getting."

McClendon lauded the agreement he helped write, saying Moreno was looking through "the wrong end of the telescope" when talking about the businesses that would be affected negatively by the new projects.

Councilman David Ouzan said he thought the new businesses would bring economic benefits to the community by bringing a variety of jobs and tax dollars to the general fund.

The council voted 5-0 to approve the agreement, then voted 5-0 as the Redevelopment Agency to approve the pact.

>> Staff Writer Aaron Claverie can be reached at 337-3419 or

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