Low-Cost Housing Project Stalled by Investor’s Terms

A real estate speculator, snubbed in his bid to develop a low-cost housing project, is holding up the development while he negotiates with the city for as much as $85,000 he says he spent preparing the project.

In the latest twist in two difficult years of negotiation, Oxnard officials are quietly considering paying Donald T. Kojima for environmental and design work on the property so that he will follow through with a land swap needed to get the project off the ground.

Already the city has paid Kojima $4.56 million for 41 acres in northeast Oxnard where officials hope to build about 200 low-cost homes, a school and a park.

Another $755,000 was held back until Kojima completes an intricate land swap with the city. Rather than pay that sum, the city agreed at the time that it would give back seven acres to the landowner.

But because appraisers valued the seven acres at $910,000, Kojima could end up with $155,000 extra in land value if the City Council were to approve the agreement. That amount was intended to provide Kojima with incentives to reduce costs if he were picked to develop the project near Lombard Street and Camino del Sol, according to a 1994 city report.

But Kojima was not chosen for the job. Citing stronger proposals from other home builders--Kojima has no experience building homes--the City Council in January picked an Irvine-based home builder to develop the project.

That prompted Kojima to threaten to back out of the land swap--and forced the city to reevaluate the original terms of the deal.

“We were back to square one,” said Sal Gonzalez, the Oxnard Housing Authority’s director and a city negotiator. “It changed the whole character of the plan.”

Kojima, sentenced in January for battering his former girlfriend, did not return phone calls made to a county work furlough facility where he is serving 90 days.

But city negotiators say he is demanding that his costs in preparing the site be reimbursed.

“He has made a request that he be compensated for certain expenses that he incurred in connection with the project,” said Alan Holmberg, a Los Angeles attorney representing the city. “The figures I believe could be as high as $85,000, depending on what he submits.”

Also at issue is the city’s promise to give Kojima seven acres--a deal that could earn him as much as $155,000.

Now that the city has started negotiating with Akins Communities Inc. to build the homes, Mayor Manuel Lopez said Oxnard may have to reconsider its promise to return the seven acres.

“I think that is part of the bone of contention,” Lopez said. “I am sure that those are the things that they are trying to iron out.”

But City Councilman Andres Herrera said he does not recall any discussion that Kojima would benefit from the return of the seven acres.

“I know it would be an equivalent value-for-value exchange,” Herrera said.

The cash the city used for the land purchase comes from federal housing grants and other money not connected to the city’s General Fund.

City Atty. Gary Gillig said city negotiators are still hammering out the terms of an agreement and speculation about terms is premature. Gillig said a majority of the five-member City Council would have to approve any agreement.

“As far as I am concerned, there is no such thing as a deal until we have three votes,” Gillig said.

This particular affordable housing project has long bedeviled Oxnard’s City Council.

The idea for the project came about more than 10 years ago when a group of mostly poor farm workers began lobbying the city to help them move out of a crowded trailer park.

Home to about 1,100 residents, the Oxnard Mobile Home Lodge was at one time considered by some affordable-housing advocates to be the worst slum in Ventura County. In recent years, the park owner has made significant improvements, including installing a new electrical system and water pipes and resurfacing streets.

As plans for a low-cost development advanced, the City Council has said the new housing should be open to all low-income residents who qualify and not just the trailer park residents. The residents have criticized the city of backing away from pledges to use the new housing to relocate them.

And from the start, Oxnard has encountered trouble acquiring the land from Kojima.

Although Oxnard needed only 34 acres for the low-income housing project and a spot to build a park and school, the city actually bought 41 acres. The land the city wanted for the school and park was owned by Kojima, but in foreclosure. So Oxnard essentially bailed out Kojima by buying the whole parcel.

“There was an issue of default and we didn’t want those properties to go into default,” Gonzalez said.

The city always intended to swap 20 of the 41 acres it purchased for a 20-acre plot Kojima owns at the corner of Lombard Street and Camino del Sol. The city would build the low-cost houses at that site and is anxious to complete the transaction so the home builder can begin construction.

Gillig said city leaders are expected to be given an update on the negotiations during a closed session at Tuesday’s City Council meeting.