Council Says Developer Breached Contract : Thousand Oaks: Officials find firm in default on $806,000 payment. They want to reduce project's size.


The Thousand Oaks City Council has nullified part of a development agreement locking in a 2,350-home project on the Dos Vientos Ranch.

Responding to a dozen residents who accused politicians of paving over Newbury Park's scenic foothills, the council voted unanimously to declare a breach of contract and officially find developer Courtly Homes in default of a $806,000 payment.

A majority of council members then indicated they would seek to change the already-approved plan for Dos Vientos by deleting some of the 136 homes linked to the delinquent payment.

Under the contract, Courtly Homes promised to pay $806,000 when it received formal permission, in the form of development allotments, to build those 136 houses. The due date for the payment expired nearly four months ago, and the developer requested an indefinite postponement.

Rather than negotiate, however, the city voted Tuesday night to withdraw the development allotments and consider future sanctions, including eliminating the 136 homes.

"They can't just say that they're not going to pay and walk away free," Councilman Frank Schillo said. "There has to be some penalty. A contract's a contract. That's all there is to it."

The council's move cheered many Newbury Park residents, who have long argued that the Dos Vientos project would mar a rural corridor and create unacceptable traffic, noise and pollution. A recent environmental impact report backed up some of these claims and indicated that the development would destroy some valuable wildlife habitat as well.

"We hired you to ride herd on this city and look after all that we cherish and need," resident John Crawford told the council during a heated two-hour debate. "If you don't have the spine to stand up and do what's right, I think you ought to find something else to do with your Tuesday nights."

But although speaker after speaker urged the council to delete the 136 homes in question, City Atty. Mark Sellers said the lawmakers could not take that action immediately. Any change in Dos Vientos' density would require an environmental impact report, rezoning and several public hearings, he said.

Before that lengthy process can begin, the city and the developer will have to enter arbitration, because Courtly Homes maintains that the delinquent $806,000 payment does not constitute default or a breach of contract.

The developer's attorney, Chuck Cohen, argued that the collapse of the savings and loan industry and the prolonged recession have made it impossible for Courtly Homes to finance construction on Dos Vientos.

These economic factors, he said, are as devastating as an earthquake, hurricane or other "act of God" and should relieve the developer of its responsibilities under a special provision of the contract.

Furthermore, Cohen warned the council that he would regard downzoning as a breach of contract on the city's part--and probable cause for a lawsuit.

The development agreement guarantees Courtly Homes fixed zoning and explicitly allows 2,350 homes on the ranch. By moving to cancel some units, the council "is treading on very dangerous ground," Cohen said.

"Courtly Homes is acting as a prudent businessman and choosing not to start construction prematurely," Cohen added. "Courtly does not consider itself in default."

To that, resident John Thompson scoffed: "Chuck Cohen has pulled a whole lot of rabbits out of his hat over the years, but unfortunately, this time he pulled out a dead chicken."

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