FEATURES |
By Royal Calkins
Monterey County government’s nightmarish relationship with a particularly difficult landlord is finally coming to an end.
County officials reached a settlement last week with the purportedly nonprofit Life Foundation, which for 20 years has owned and managed the Quadrangle Building in Salinas. The nearly 100,000-square-foot structure houses the county’s Department of Social Services. The county had sued the foundation and its founder, Barnett Davis II, over a long list of grievances including a leaky roof, other unmet maintenance needs and allegations that money intended to fix those problems went into his pocket instead. In a thick stack of court papers, he repeatedly denied the county’s claims
The agreement eliminates the need for a trial that had been scheduled to start in November. It enables the county to buy the building from Davis and his Life Foundation for $7 million. The price was set 20 years ago when the city of Salinas agreed to authorize $20 million in bond financing so Davis’s fledgling foundation could buy the structure at 1000 S. Main St. At some point, presumably after the county pays Davis for the building, he will be required to pay the county $800,000, according to the settlement agreement. Why that amount wasn’t simply subtracted from the sale price wasn’t immediately clear.
The county has been leasing most of the building to accommodate the 550 people who staff the county’s various social services programs, including Medi-Cal, CalFresh, CalWORKs, Child Welfare Services, Adult Protective Services, In-Home Supportive Services, Aging and Adult Services, and Veterans Services.
The roof over the sprawling building is notoriously leaky despite Davis’ promises to replace it years ago. County employees have become adept at placing trash containers and other receptacles in the best spots during storms. The cost of replacing the roof has been variously estimated at $200,000 to $500,000. Its current geriatric condition is obvious to passersby, but if the settlement addresses the matter, it doesn’t come right out and say so.
The county’s chief public information officer, Nicholas Pasculli, said in an email that the county expects to move forward “with significant roof work before the rainy season at the end of this year.”
The next line of his email says, “This concludes our response. Have a good rest of your day.”
A Voices article in February summarized the county’s previous arrangement with Davis like this:
“Along with the rent, now more than $190,000 a month, the county has paid management and maintenance fees over the years, sometimes without knowing quite where the money was going, according to court records that reveal the building is now operating under supervision of a court-appointed receiver … . The receivership has essentially severed Davis’ ties to the building, but several legal issues remain unresolved.
“Because Davis’ purchase of the 78-year-old building was financed by tax-exempt bonds, some of the rent money over the years has gone to legitimate local charities as required by the financing documents and city of Salinas decisions. But a chunk of the contributions went instead to a troubled Oregon yoga temple, national charities, parades and unidentified autism researchers. They also were supposed to be made in consultation with Salinas Mayor Dennis Donohue. It didn’t turn out that way.”
In recent years, Davis contracted some of the building management responsibilities to longtime Monterey property manager Jeff Davi, who is a local GOP official and former California real estate commissioner. He declined to comment for Voices’ previous articles on the matter.
A news release from the county this week says, “The settlement represents a fiscally responsible outcome for Monterey County taxpayers. In addition to preserving the county’s contractual right to acquire the property at the established purchase price, the agreement provides for the transfer of building-related reserve and operating funds to the county, includes an additional payment to the county, establishes a process for the retirement of outstanding bond obligations, and avoids the significant costs, delays, and uncertainties associated with continued litigation. Additionally, the settlement ‘returns certain building reserves and operational accounts to county control’.”
The news release says the settlement also achieves “three public policy objectives: (1) protects taxpayers, (2) secures a major county asset and service center, and (3) strengthens economic stability in South Salinas.”
Deputy County Counsel Henry Bluestone Smith, who helped lead the county’s side of the litigation, said the settlement “resolves longstanding financial and operational issues, and provides certainty for the future delivery of essential services to Monterey County residents.”
In light of the county’s numerous claims in court papers that Davis had misappropriated county money that should have gone toward building maintenance, Voices asked whether county officials had referred the issue to the district attorney. County spokesman Pasculli said only that he could neither confirm nor deny.
Have something to say about this story? Send us a letter or leave a comment below.
SUPPORT NONPROFIT JOURNALISM 
GET OUR FREE WEEKLY NEWSLETTER
