Last week the Vanguard reported that the city of Davis had initiated foreclosure procedures against DACHA and put the entire array of properties up for bidding, the Davis Area Cooperative Housing Association which had been formed as a cooperative affordable housing project. DACHA has been beset by lawsuits and back in 2008 the city loaned DACHA 4.15 million dollars in an effort to shore up its finances.
That loan reduced the carrying charges for its membership but also brought on more controversy and accusations. The downfall of DACHA appears to be nearing completion. Last year, Twin Pines Cooperative Foundation had won a judgment against DACHA. Because of that judgment, they were assessed with a levy on their assets and have been unable to pay their loan repayments to the city.
David Thompson and Luke Watkins have been very public about their complaints against the DACHA board and the city’s handling of this situation. Earlier the Vanguard had joined in a call for an independent investigation into the actions taken by the city of Davis. The Council declined by a 3-2 vote to do that.
Until now, we have only heard from Mr. Thompson and Mr. Watkins on their side of the story. For the first on Tuesday, we hear the story from DACHA board President Catherine Huff.
She told the Council during public comment on Tuesday night:
“I have been going through about four years of arbitration litigation with DACHA. In 2006, the prior board of DACHA was served with a complaint by Neighborhood Partners. DACHA was served with a second complaint in October 2008, this time by Twin Pines Cooperative Foundation. In October 2009, the new board of directors, was seated in hopes of finding a settlement of both suits.
Encouraged by opposing council, we naively thought that settlement was possible. We spent countless hours working with DACHA’s attorneys to prepare for settlement discussions. Each request for a conference was met with silence by the Principles David Thompson and Luke Watkins. In fact, each attempt at settlement was met with more aggressive legal maneuvering by the opposing parties.
In October Neighborhood Partners seized all of DACHA’s accounts which totaled over $57,000. In February, our last hope for settlement meeting was dashed when we received a notice from Twin Pines that they would move forward into litigation by summoning 13 board and city employees to have depositions upon us.
In November, unable to pay our mortgage, our bills, our taxes, and our insurance, DACHA defaulted on its loan to the city of Davis Redevelopment Agency.
In March we called to request a meeting with city staff and attorneys. We explained we no longer could defend our cooperative from ensuing litigation. A meeting took place at city hall on March 11, 2010, city attorneys decided to foreclose on DACHA’s mortgages and we agreed.
In the past few days, board members past and present have received multiple phone calls from David and Luke. They’ve asked us to join them in their request to ask the city to stop its trustee sale scheduled for April 22. The members of DACHA have lived under the threat of losing our homes for four years. We sincerely believe this litigation is not over. I’ve been apprised that he (David Thompson) continues to want to have the Twin Pines Lawsuit.
I would have love to have had this a few years ago that we were in the situation we are in tonight, but DACHA finds ourselves not believing that litigation would go away. We’re in support of going ahead and having the trustee sale.”
Previously David Thompson had addressed the council asking them to stop the trustee sale.
“I had written to the city on March 1 about how we could deal with DACHA. I met with you Madam Mayor on March 25. We were of course surprised to see the notice of foreclosure on March 30. We think that that action was premature, but it has spurred action so that might be a very good benefit.
Given the numerous complexities surrounding the situation which affect many people’s lives, and could for a long time. NP (Neighborhood Partners) has decided that we should make a sincere effort to find solutions that are mutually beneficial to all parties.
To move forward somebody has to given something up. On its part, Neighborhood Partners offers to set aside its demand that the city commit to an independent investigation before we talk. We’re willing to give that up. In return, we ask at this time that city rescind the foreclosure action. I believe that with those two things taken off the table, NP and the city could look towards sitting down, talking, and finding solutions. We are happy to include the members of DACHA in those talks.
This has been a very difficult process and I am willing to bear my share of the blame for my part in it. However, before it gets to even messier chapters, costly chapters, and wore for all concerned, let’s find a way to discuss solutions. So madam Mayor, I ask you and the council to affirmatively respond to our offer and I know you may not be able to do that tonight but we wanted to be publicly making it known that we want to find solutions.”
Commentary
The Vanguard has for the most part hoped to stay out of what was a dispute between DACHA and Neighborhood Partners, however, we were very interested to know of the city’s role in this increasingly ugly chapter. Unfortunately, council’s vote of 3-2 precluded the public of learning what happened in an objective way by disinterested third parties.
Instead what we have are public charges and counter-charges by two sides.
We are very disappointed to hear from Mr. Thompson that they have dropped their efforts to have an independent investigation.
We also believe that Mr. Thompson’s offer to council on Tuesday was far too little and too late. If he is serious about stopping foreclosure, it will probably take no less than dropping the levy and reaching some sort of financial compromise. Even then, it might not be enough to sway DACHA residents who appear very leery of future dealings.
Mr. Thompson does not hold near as much leverage as he believed he held. We learned on Tuesday that the foreclosure has the support of the DACHA residents who believe they can get out from behind litigation and other expenses.
We will see where this ends, however, it would appear that a cooperative affordable housing project is not in the future works for the city of Davis. Will the public ever know what actually transpired by the city when it pumped $4.15 million in taxpayer money into propping up DACHA, probably not. And from our perspective, that is but one of the many unfortunate aspects of all of this.
—David M. Greenwald reporting
Naive question: if foreclosure proceeds, is/are the levies against DACHA by the NP/Twin Pines suits considered null? Is that a reason for everyone on city/DACHA side to be for it and NP to be against the foreclosure?
DPD: “We will see where this ends, however, it would appear that a cooperative affordable housing project is not in the future works for the city of Davis.”
Anytime a cooperative is formed, it is important for everyone to know exactly who they are getting involved with, what is expected of everyone, and exactly what responsibilities everyone is taking on. This is especially true in regard to naive homeowners and citizen taxpayers. DACHA should serve as a warning with respect to the serious complexities and potential downsides involved with respect to housing cooperatives.
This dispute is clearly legally complex and determining culpability by an “independent” investigation, would ,IMO, not yield any clear conclusions. In any event, the DACHA foreclosure plan has nothing to do with culpability. It is a dispute about MONEY, in spite of NP’s public posturing to the contrary, with all of the parties acting to protect what they perceive to be their interests. It does appear that NP has overplayed their hand.