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Our Opinion: Insider trading

May 07, 2002

There are those people who wield power publicly and those who wield power behind the scenes.

No one has more power behind the scenes in Calexico than Raul Estrada, according to those in the know in Calexico. Never was that more in evidence than in last week's decision by the Calexico City Council to pay Estrada an extra $250,000 if he gets a hotel and restaurant built on property he intends to sell to developers.

So if this whole thing goes through, Estrada benefits triply, first by selling the land, second by having the city build roads to service that land (another part of the agreement) and third by collecting $250,000 from the city in connection with the deal once he sells the ground.

This is all part of a "settlement" the city agreed to with Estrada because it wrongly paved .73 of an acre of Estrada's land behind the Calexico 10 theater complex. Estrada threatened to sue the city over the paving.


Coincidentally, though, Estrada had some matters before the City Council, so deal-making started. According to the deal worked out with Estrada, he will "convey" property to the city on which the city will build roads that would service the developments likely soon to follow on Estrada's land.

As mentioned earlier, if the developments occur on the land, Estrada gets an additional $250,000. If they don't, Estrada has to repay the city for the building of the roads. If we know Estrada, these developments are going to happen.

On split votes in past weeks, the City Council earlier had turned down two settlements of the matter because some councilmen thought those pacts put too much burden on the city. If this is the good deal the city accepted, the bad deals turned down must have been scary.

Yes, some good things could come from the deal. The Applebee's restaurant proposed for the parcels in question should be a nice addition for the city, particularly for those seeking a meal or a drink before or after a movie at the Calexico 10. And the plans are for the hotel to be a rather high-end lodge, one that likely would take away business from Mexicali's Hotel Lucerna more than any inns in the Imperial Valley. Both will mean more money coming into city of Calexico coffers.

We have nothing against Estrada. He is a likable, charming, self-made man who has connections and knows how to use them. Good for him. In this deal and others with the city, his objective was to try to make the best arrangement possible for himself.

Our problem is with the City Council. Agreeing to pay Estrada a quarter of a million dollars after he has made a lucrative land sale, and after he has roads built for him by the city, seems a pretty stiff price to pay for paving less than an acre of land.

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