With the hope of protecting about $500,000 in taxpayer money in prepaid rent on a property now in default, the Orange County Vector Control District Board of Trustees today signed off on continuing an effort to pursue acquiring the property.
As I reported last month, the previous district manager, Gerard Goedhart, made unauthorized advance payments on the property in the hopes of having credit toward a purchase. Now with the property in default, the district is at risk of losing the money.
To protect what district manager Michael Hearst called an “investment,” the district would have to purchase the property from the property owner. However, it remains unclear whether that will be an option. If the district is forced to buy the property from the lender, which now controls the property, the prepaid rent would most likely be lost.
The district has always planned to buy the property and expand its occupancy in the building. Hearst said that the agency, which was formed in 1947, continues to grow with the county and will need to expand. But the default has forced the district to move faster than Hearst said he had expected.
“We’re prepared for this,” Hearst said. “Just not as prepared as we’d like to be.”
With the district forced into fast-tracking the process, there have already been a couple of fumbles along the way.
The board, at its meeting on Nov. 18, expressed a desire to hire special real estate counsel. But there was confusion over who was to obtain special counsel, with board President Joe Anderson and district counsel Alan Burns each pursuing counsel on their own.
The confusion was a result of the rush, Hearst said. With trustees lashing out at Burns during the last meeting for allowing Goedhart to make the payments on the building without board approval, the thought was that Anderson should be the one to obtain counsel, Hearst said.
However, Board Trustee Melody Carruth is married to a lawyer from Anderson’s special counsel pick, Rutan and Tucker LLP, which resulted in a conflict of interest problem. Finally, the problem was discovered and board members were today recommended Burns’ pick for special counsel, Straddling, Yocca, Carlson and Rauth.
Board trustees said they were uncomfortable with the way the district was going about contracting out for legal services, and some said they didn’t have enough information to make the decision.
“This seems a strange way to do a sole source,” said board trustee John Moorlach, who is also a county supervisor.
Adding to the confusion is the fact that the board is still waiting on an updated appraisal of the property, Hearst said.
Although the process has so far been rushed, Hearst expressed optimism in the timing of the purchase, saying market prices are low.
“This is a good time to be forced into buying something,” Hearst said. “It could have been a lot worse.”