A prime downtown parcel slated for the ill-fated Inland Pacific World Trade Center project will remain under city ownership, even though a Monterey Park developer paid $1 million for the land in 1987, city officials said this week.
Although officials said previously that Kajima International, the contractor on the trade center project, would gain title to the land under an agreement with the city, City Administrator A. J. Wilson said such a deal was never “legally formalized.”
Working on Agreement
The Community Redevelopment Agency will keep the land and does not appear to be legally obligated to give Kajima anything, Wilson said. However, attorneys for the city and the development firm are working on an agreement “to give (Kajima) an opportunity to recoup the cost of the land,” he said.
“I think it’s important that we show business integrity,” Wilson said in an interview this week.
Deputy City Atty. Bill Curley said the city and Kajima are very close to working out “a mutually beneficial arrangement where they can recover their investment and we can get a first-class project.”
The agreement would “embody the spirit” of a tentative agreement between the agency and trade center promoter H. Thomas Felvey that appeared to give the firm title to the land. Curley said that deal was never finalized because Kajima and Felvey could not reach an agreement.
Wilson said he hopes Kajima can assist the city in developing a “mid-rise” office building on the 4.6-acre site across the street from City Hall. Mark Schaffer, attorney for Kajima, did not return phone calls.
The disclosure confirmed city officials’ contention that Pomona did not lose any money on the World Trade Center project, which had been proposed by Felvey as an ambitious 12-story, $96-million hotel-office complex. The council, inspired by Felvey’s vision of the project, gave the promoter the exclusive right to develop the land in 1984.
But council members got cold feet in 1987 after learning of Felvey’s legal and financial entanglements and demanded that he find a suitable partner to develop the project. The city severed its relationship with Felvey last May after he failed to secure a developer or arrange financing for the venture.
However, some City Council members again raised questions this week about what happened to the $1 million. City officials have said that Kajima, hired by Felvey as the construction contractor for the trade center, transferred the money to the redevelopment agency in 1987 after a check to the city from Felvey proved to be no good.
‘What Happened to the Money’
“Last year, I kept harping on the question, ‘What happened to the money?’ and I was told that no money changed hands,” Councilwoman Nell Soto told Wilson at Monday’s council meeting. “Why was I told that if it wasn’t true?”
The money was placed in a redevelopment agency bank account and disbursed by Felvey, Wilson said. About $516,000 was spent to pay the cost of issuing $100 million in revenue bonds for the trade center project, Curley said. Felvey spent the rest, ostensibly on architectural services and other costs related to the project, Wilson said. Felvey said he would not comment until he sees information in writing from the city.
City officials said they do not know how the additional $484,000 was spent. At Monday night’s meeting, Councilman C. L. (Clay) Bryant asked Wilson whether “Felvey walked off with” some of the money. “Could be, could be,” Wilson responded.
In an interview this week, Wilson said city officials do not know how Felvey used the money that remained after the bond costs had been paid.
“We’ve never had an accounting of how the money was spent because it was not our money to account for,” he said. “Because there was no (accounting), those suspicions are going to remain.”