The Sun
Sunnyvale's Newspaper

City moves to take over Dubrovnik's land

Two sides set to go to court

By Justin Berton

City officials and downtown landowners Dubrovnik Associates finally reached an agreement at the Sept. 29 council meeting, but it wasn't the type of agreement either side had expected.

After three weeks of negotiations, the two sides fell short of hammering out a deal over a small patch of downtown land, forcing a reluctant City Council to start legal proceedings to acquire the lot.

The city needs the plot, owned by Dubrovnik, for its downtown redevelopment plan. The two have been unable to settle on an acceptable price, and under eminent domain, the city has the right to overtake it.

The two sides agreed only one thing could settle the matter--a court of law--and neither side was particularly excited about the prospect.

"I tried like hell to avoid getting to this point," Councilmember Jack Walker said.

City manager Robert LaSala said he felt "much regret" that a compromise could not be reached.

Nick Gera, the representative for Dubrovnik Associates, praised the City Council for its attempts to negotiate a deal. "But I feel we must move on," he said.

LaSala reminded council the two sides could negotiate "all the way up until the jury returns from deliberations," but whether that takes place remains to be seen.

Once the city officially files the paperwork, the two sides will have lawyers duke it out in a courtroom; the jury will decide how much the weed-filled half-acre parcel next to the Town and Country Village is actually worth.

The city hired an independent appraiser who valued the land at $1 million, LaSala said.

Dubrovnik claims the land is worth at least $1,077,000--the maximum price the city agreed to sell the lot to future downtown developers, the Mozart Development Group.

Gera said his company will hire its own appraiser to value the land--who could return with a figure higher than the city's.

Gera said the value may increase after the appraiser factors in "adverse condemnation," which is the value of rent Gera expects to lose on his current buildings once downtown construction begins.

Gera said when the construction starts, and shoppers to Dubrovnik's Town and Country Village are forced to park their cars far from the center, businesses will suffer. As a result, Gera said, prices he can charge for rent at the center will plunge.

The sticking point in the negotiations remained parking and access to the area. Both sides agreed the Hill building could be demolished to make way for a parking lot, but Dubrovnik wanted the city to guarantee it would remain a parking lot for two years after construction was completed--a guarantee LaSala said the city couldn't make.

"We've given, we've given, we've given," Gera told the council, "and we're not getting anything in return. We feel the city should be giving us temporary parking. We shouldn't have to fight for that."

LaSala said a two-year guarantee would tie the city's hands for possible development opportunities in the coming years.

Vice Mayor Manuel Valerio, who voted in the 5-1 majority, said he remained optimistic the two sides could meet somewhere down the road before a drawn-out legal battle ensues.

"I still hold out some hope that perhaps negotiations can continue and some resolution can be reached," he said.

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This article appeared in the Sunnyvale Sun, October 7, 1998.
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