Due diligence activities check out OK, officials say, but
simultaneous lawsuit looms over final deal
GILROY
The city council will likely approve $140,525 in expenses for the five months of due diligence inspections city officials and consultants performed related to the $14 million Gilroy Gardens deal.
Bond counseling, boundary surveys and property valuations for the 536-acre property had been going on at varying times since August 2007, but now everything’s done, and no red flags have emerged, according to Assistant City Administrator Anna Jatczak and Councilman Dion Bracco, who represents the council on the park’s nonprofit board of directors.
“The due diligence is final now, and (the inspectors and counselors) are going to report back on all that, but everything looks pretty good,” Bracco said. Jatczak said the actual transfer of funds should take place Tuesday.
But the 11th-hour closed session, which is billed as a property-related discussion about “Price, terms of payment, and lease,” comes six weeks after a former Gilroy Gardens employee, David Lee, filed a unfair labor practices lawsuit in Los Angeles County Superior Court against the park, according to court documents.
The case is in the process of moving to the Santa Clara County Superior Court in San Jose, according to Lee’s attorney, Eric Kingsley, a partner at the Los Angeles-based law firm Kingsley & Kingsley, which represents Lee. The former employee claims, among other things, that the park failed to provide him with adequate meal breaks and failed to reimburse expenses he made related to the job.
Gilroy Gardens representatives could not be reached for comment Monday evening, but Bracco said the case is still up in the air and had nothing to do with the hurried closed session hearing, which he repeated was meant to address the final, copacetic results of the due diligence activities.
“It’s not a lawsuit yet. It’s one person, and no one really seems to know what it is,” Bracco said.
The closed session was added to the council’s agenda late Friday afternoon, so to comply with the Brown Act. City Clerk Shawna Freels said Monday the body will announce its decision to hold a closed session in open session Monday tonight and then formally agendize the closed meeting to occur after the normal session. The mayor and city administrators usually coordinate agenda topics, but the mayor did not return a phone call seeking comment Monday afternoon.
