YOLO SUN NEWS REPORT :

Yolo Sun has obtained documents demonstrating a stark situation of civic extortion involving the local Hoblit Chrysler, Dodge, Jeep dealership — instigated by Paul Petrovich and tolerated by Woodland City Council, a majority of which recently (September 2011) approved Petrovich’s Gateway 2 project, currently the subject of legal action in Yolo County Superior Court, challenging the City’s compliance with the California Environmental Quality Act. [Editor’s note: please see recent articles on this scroll.]

Circumstances surrounding these stunning documents make crystal clear that Petrovich has since October, 2010, retaliated against city requests for his compliance with terms of the development agreement for the Gateway Center, by halting all of his development activities — except his Gateway 2 project — (for example, the multiplex cinema project at Main and Third to Fourth Streets, which upended civic plans to renovate and expand State Theatre) — and by threatening to force Dave Hoblit’s motor-vehicle dealership to pay the costs of some of these municipal requests.

___  Hoblit Targeted By Petrovich For Relief From City Demands  ___

Hoblit was eventually (through several months of legal proceedings) evicted by Petrovich over a monetary rent dispute and transferred — with expedited city assistance in July, 2011 — from Petrovich’s since vacant downtown property at 801 Main Street to the former General Motors dealership on Main Street between Elm and Walnut Streets.

Between November, 2010, and July of 2011, however, Hoblit had no viable option for relocation and was reluctantly considering suddenly shuttering his local dealership because of chaotic conditions of its downtown tenancy.

Interviewed for a Yolo Sun article in September, 2010, Hoblit expressed intense anxiety about his position at a hot political flash-point between the city and Petrovich, who in 2009 suddenly gave Hoblit an immediate (later rescinded) eviction order related to his plans for a multiplex cinema project at the dealership’s location, site of the former and historic Electric Garage building.

Court documents related to Petrovich’s eviction of Hoblit and other relevant information describe a situation of Hoblit refusing to eventually relocate within Petrovich’s proposed Gateway 2 project and consequently not being provided by Petrovich with an annual lease at Electric Garage.

For the last several years of his dealership’s tenancy, Hoblit was forced into a clearly tenuous, month-to-month arrangement.

This arrangement began to unravel during September, 2010, when Petrovich finally raised Hoblit’s rent from $5,500 to $10,000 per month. This amount was paid by Hoblit from October, 2010, until March, 2011.

Hoblit’s rent might have been raised to $25,000 per month — according to Petrovich’s agent whose startling letter appears below — unless the city relented on its demands regarding the Gateway Center development agreement.

____  City Demands Triggered Petrovich Retaliation  ____

On October 18, 2010, the Woodland City Manager sent a five-page letter to Paul Petrovich (obviously including detailed City staff analysis) which requested his company’s (Woodland Development Company: WDC) compliance with its development agreement (DA) for the Gateway Center retail complex at the City’s eastern edge.

This letter detailed several demands, including an overdue payment of $111,345.75 for various staff and consultant costs related to Petrovich’s Gateway Center project.

“City staff has attempted to work with your staff over the last two years to come to an agreement on how to bill WDC for your payment of interchange related costs under DA item 3.13. Because these discussions have not resulted in an agreement and the City has already begun making payments and incurring obligations for interchange related expenses, I feel that I must unilaterally determine the methodology of your DA obligations and begin invoicing you for these costs[,]” reads the city manager’s letter.

In addition, the city manager’s letter detailed a pattern of negligence by WDC of its obligations under the Gateway Center DA, related to screening of motor-vehicle drive-throughs for two (heavily take-out) restaurants located within the Center: Starbucks and Panda Express.

The In-And-Out Burger restaurant already has installed drive-through screening in compliance with the DA at its location within this development project, but Petrovich complains in his response to the city that his private agreements with these other two fast-food franchises (for some unknown reason) did not include provisions for compliance with these aspects of the DA.

____  Petrovich Retaliates, Extorting City To Relent, Rescue Hoblit  ____

“[WDC] believes it owes you an explanation why it now needs to increase your monthly rent again [from $10,000 to $25,000 per month]. It is because of actions of the City of Woodland[,]” reads the letter of Petrovich’s agent (Oct. 19, 2010) to Dave Hoblit — reproduced below in its entirety:

“Yesterday, [  ] the [Woodland] City Manager sent Paul Petrovich a five page letter making demands on the Company’s affiliate [WDC] that are unprecedented and onerous based on permits issued at the Gateway Shopping Center.

“The City is also demanding compensation for City staff time that exceeds any reasonable amounts[.]

“Further, among the actions the Company believes to be most egregious, the City is requiring [WDC] to build 44” high walls along two drive-through lanes that have already been processed, permitted, built and inspected through all the City departments.

“[I]n the Company’s opinion, the City is in financial trouble and is attempting to heap the burden on the Company of its affiliates, whenever it can, even though the Company and its affiliates are tying to create jobs and revenue for City.

“These after-the-fact demands have put a tremendous financial pressure on the Company.

“As an example, [WDC] has leases that are fully negotiated with Starbucks and Panda Express and does not have any ability for them to pay for these drive-through improvements even though the drive-thus will support their businesses specifically.”

This letter from Petrovich Properties to Hoblit continues:

“Additionally, the City has demanded that [WDC] pay $35,000 for studies for Gateway II that should be drawn out of the fully funded $75,000 liability account that covers all the reports required for the rezone and annexation process. [WDC] has no ability to request additional funds from its Lender and all of its cash is committed.

“Consequently, Petrovich Properties has no alternative than to increase your rent to $25,000.00 per month effective November 1, 2010.

“[I]t may find it necessary to increase your rent further if the City continues to proceed with this course of action. [WDC] sincerely hopes that the City will reconsider its demands.

“[T]he cause of this increase in your rent is directly related to the City’s actions, not the Company’s Lender or any desire by [WDC] to receive more rent for its financial gain. Your increased rent only helps to offset a portion of our new burden imposed by the City.

“[I]f the City elects to rescind its demands on the drive through, 80% of irs duplicative staff charges for the remainder of the Road 102 project and agree to use the liability account for the purpose it was created, [WDC] would reduce your rent to its current level.

“There are many other draconian requests the City has made upon [WDC] that do not relate to the issues above that our Development Team will be addressing separately with the City.”

Hoblit’s rent was never raised to $25,000 — apparently because the city rescinded its demand about the drive-through screening at Starbucks and Panda Express (no action by the city or Petrovich has been taken during the past 17 months to fix this violation of the DA) — as well as because the city has apparently permitted a delay of 14 months for payment of the requested $111,345.75.

Interim city manager, Kevin O’Roarke, has recently indicated that it is his understanding this bill was finally paid by Petrovich in January, 2012.

____  Petrovich’s Email Response To City Manager’s Letter  ____

Ten minutes after receiving the October 18, 2010, emailed letter from the city manager, Petrovich replied via email and a brief exchange took place.

Petrovich:

“To say I am disappointed is a complete and total UNDERSTATEMENT.

“Any cooperation between Woodland and my company on ALL matters between us is now over. I am going to stop now before I outline exactly what actions I will be taking.”

City Manager:

“Nice.”

Petrovich:

“You drew first blood …… This letter is ridiculous and hostile.”

City Manager:

“It asks you to meet the requirements of the DA [Development Agreement] and construct drive through walls. I hardly think that is hostile.”

Petrovich:

“It’s your way or the highway. It’s your rules as you define them or else. The DA has no rules of interpretation. There are little or no guidelines. It’s a contract between parties, not a unilateral agreement. The manner and way it is to be administered is between the parties. If you want to assert this un-yielding rule and demands on me, so be it. I also have the right to nor agree and dispute it in court. I also have the right to make decisions on all my properties in Woodland and Yolo County as you do with all the decisions you heaped on me. Good luck”

(Editor’s note: emphasis added in final email message — but emphasis in initial emails, above, was in original.)

Clearly, such a statement by Petrovich strongly implies his resistance / lethargy regarding proper development of two key parcels within downtown Woodland: the Electric Garage building and the large vacant lot on the NW corner of Main and East Streets.

This intersection is described in important city planning documents as being the “Primary Gateway” of Woodland’s downtown area.

Several years ago, Petrovich’s development of a Rite-Aid store at this location was approved by the city council, but it was never constructed, likely / partially resulting from the economic downturn in 2008.

If that Rite-Aid store would have been built, it would have destroyed prominent city planning goals regarding any aesthetic: “Downtown Gateway” at this intersection — as it paired a one-story, ordinary suburban store with the massive, urban and historically oriented Wiseman Building directly across Main Street.

It seems clear that Petrovich was — originally uninterested — in the goal proclaimed on his sign standing upon the vast vacant lot at East and Main Streets, about a: “quality infill project.”

Considering his email comments to the city manager, his expressed attitudes and interests are now (openly, to city staff) antagonistic toward this community.

His cinema proposal, which adversely affected the outcome of prospects for restoration and expansion of the historic State Theatre, is apparently now suspended or dead. There has been no movement within this project, according to city staff, since Petrovich’s expressed threat in these emails.

Gateway Center itself remains largely uncompleted.

____  Bond Liquidated To Cover Default By WDC  ____

On October 20, 2010, the city manager determined that WDC was in default on various DA obligations and formally demanded fulfillment of a warranty bond with Travelers Insurance Company, related to public improvements associated with Gateway Center.

“[D]espite repeated requests and ongoing negotiations between the City and [WDC] no progress has been made on the completion of these items.

“Therefore, the City hereby formally demands Travelers Insurance Company to fulfill its contractual and legal obligations to complete deficient public improvements in accordance with the terms of the [DA].”

Knowing all of this, as well as his subversion of city interests through various forms of retaliation in the meantime, a 3-2 majority of the Woodland City Council recently approved a long-term project with Petrovich at Gateway 2 — doubling the size of the present Gateway Center.

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