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- Written by: Elizabeth Larson
LAKEPORT – The company that has held the lease on the buildings at the Vista Point Shopping Center for three decades is facing foreclosure by the bank that holds its loan and eviction by the new owner of the property the center sits on.
Foreclosure proceedings were filed last November against Oakland-based Meridian Investments by Park National Bank, which holds the $1.9 million note on the Vista Point lease, according to court documents. Named as a co-defendant was Dianne Walters as the representative of the estate of her husband, Bill Walters, a Meridian partner who died last summer.
Last fall the city sold the nine-acre property underneath the 113,288-square-foot shopping center to developer Matt Riveras for $1,001,000, as Lake County News has reported.
Riveras said he filed a default against Meridian earlier this year seeking its eviction from the ground lease because of failure to perform and late payment.
Meridian has held the lease on the buildings since 1978, when it entered into a lease agreement with the City of Lakeport, according to the city's purchase contract with Riveras. With the ground purchase Riveras inherited that lease, !-- @page { size: 8.5in 11in; margin: 0.79in } P { margin-bottom: 0.08in which was scheduled to run for another 20 years.
As the city was preparing to finalize its sale to Riveras last October, Jeff Walters, Bill Walters' son who was representing Meridian, and Presidio Development Partners LLC of San Francisco asked the city to reconsider selling the land to Riveras and put a $1.2 million counter offer on the table.
By the time that offer was made in late October, Meridian had allegedly defaulted on an Oct. 1 loan payment, according to court documents. Meridian's filed response denies that it missed that or subsequent payments.
Jeff Walters, who Lake County News contacted about the situation, said he had no information about the foreclosure action.
Calls to Park National's attorneys were not returned. Meridian's attorney, Steve M. Morger, called the situation a “garden variety foreclosure,” and offered no further information on Meridian's reaction to the suit.
Donica was named by Park National Bank as a co-defendant in the judicial foreclosure in an amended complaint filed on Feb. 22.
Park National is seeking a number of findings from the court, including right to enter the property and collect rents or have a court-appointed receiver do so; a judgment for at least $1,914,103.02, which is the loan's principal through Nov. 20, in addition to accrued default interest; and whether Riveras' company, Donica LLC, can claim an event of default on the ground lease and commence its own repairs on the center.
A receiver has been appointed to manage the center, court documents show.
In the court documents, Park National said Riveras approached the bank to inform them that he planned to make $2 million in repairs to the property, which would be billed to Park National. The bank also accused Riveras of hatching a “scheme” to try to purchase Meridian's lease at a significantly lower price that its value.
Riveras said there was no scheme, merely an offer he made based on his experience in banking. He explained that most banks holding such notes usually have purchased them for pennies on the dollar.
Park National turned down his offer, Riveras said, saying they wanted in excess of $2 million.
Situation led to ground lease default action
Riveras said after he took possession of the center's land he asked Meridian to sign an Estoppel agreement, which new landlords often ask tenants to sign. It is meant to provide the new landlord with information on the tenant's situation; it also can be used to confirm lease requirements.
He said Meridian refused to sign it. Riveras said he also wasn't aware that, at that point, they had defaulted on the loan payment to the bank.
In addition, Meridian was late on its payment to him as the property owner, Riveras said, which jeopardized the company's ability to maintain their lease.
Riveras sent Meridian a letter asking for a response by Jan. 28 outlining their plans to remodel the center's buildings. He said they never responded, and about that time he was notified that the shopping center buildings had been placed in receivership.
Finally, Riveras filed a notice of default on the lease against Meridian based on the condition of the property.
He explained that the reason he is named in Park National Bank's suit is a simple one. “If my default were to beat their default I would get the property and they wouldn't get their money.”
The lease is supposed to go for a foreclosure sale at some point, and Riveras believes the bank will end up purchasing the lease rights.
“Nobody in their right mind would pay $2 million for this hornet's nest,” he said.
City Attorney Steve Brookes said the sale had been scheduled for last Friday but was postponed.
The effort to improve the center, Riveras added, continues to move forward.
Riveras said he met recently with Park National Bank to give them time to work out their issues separate from his.
He said he doesn't plan to let up on Meridian, with his civil action to evict the company moving forward.
“Right now my only interest is still the same,” he said. “I want to develop the property and make it a viable center again and with all of these people throwing lawsuits in the way it just postpones what I'm able to do with the property.”
Park National's suit said Donica – and its predecessor, the city – should have known of the center's condition. “ ... During all the years the property was in purported disrepair, Donica, through its predecessor never once raised an issue regarding the purported condition of the property,” Park National alleges.
The city did make such an effort, said Brookes. While the city hasn't done a complete inspection of the property, it did notify Meridian that certain improvements were required, said Brookes.
After the old Thrifty store's roof caved in Meridian took some steps to make the building safer, said Brookes.
City permit records also show that the company had taken out a permit to replace the roof but eventually voided it out. Meridian also fixed electrical concerns at the center after the city sent them a notice requiring it.
Riveras said when the city owned the property it should have put the lease into default based on the poor condition of the buildings. “In hindsight I bet they wish they would have.”
He added, “I'm coming in to do what the city should have done years ago, and that is either force Meridian to perform and redevelop the property and comply with their lease or get out and I'll do it.”
E-mail Elizabeth Larson at
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Two local school districts – Konocti Unified and Lakeport Unified – were among districts in 45 states believed to have received some of the 143 million pounds of recalled beef, according to a USDA Food and Nutrition Service report released last week.
The beef in question came from the Hallmark/Westland Meat Packing Co. in Chino between Feb. 1, 2006 and Feb 4. 2008, as Lake County News has reported.
The slaughterhouse was shut down in early February after a Humane Society of the United States investigation helped uncover the company's slaughter of “downer” cattle – animals so sick they can no longer stand or walk – and cruel practices employed by laborers on the animals.
Erin Smith-Hagberg, superintendent of Lakeport Unified School District, told Lake County News that the USDA is very efficient with their recall notifications to school districts.
Smith-Hagberg said the district's cafeteria director received an e-mail from the USDA about the recall on Feb. 5.
Lakeport Unified did not receive any direct products that were on the recall list, according to Smith-Hagberg. However, a processing company that the district uses may have received some of the beef.
Smith-Hagberg said that, as a precaution, the district immediately disposed of the 10 cases of beef products that came from that particular processing company.
Lakeport Unified serves 1,200 lunches and 300 breakfasts each day through its food services, said Smith-Hagberg.
That compares with the nearly 2,000 lunches and 900 breakfasts served on school days at schools in the Konocti Unified School District, said Marla Peterson, director of Konocti Unified's Child Nutrition Program.
Peterson said Konocti Unified received 206 cases of processed beef products from Westlands/Hallmark. The district was notified of the issue with the meat on Feb. 15.
“We've never had a recall this huge,” said Peterson, who has worked with the district for 25 years.
Because the recall covered meat produced at the Chino slaughterhouse in a two-year period, Peterson said she's sure some of the beef was served in the district at some point.
The USDA, however, has reported that no illnesses have been reported because of the meat, which was recalled for regulatory noncompliance.
At the time of the recall, the cases of beef were still located in Konocti Unified's central freezer facility and hadn't yet been distributed to the various schools, said Peterson.
As soon as she was notified, Peterson said she called the schools' cooks to apprise them of the situation. They kept dishes using similar beef products off the menu “just to make sure,” she added.
“We had to destroy the 206 cases on our site,” she said, with that product valued at a little under $2,800.
The destruction process included making two trips to the landfill, where the USDA required that the beef had to be plowed into the ground, said Peterson. A landfill official and warehouseman also had to sign a USDA affidavit confirming that the meat had been destroyed.
Peterson said the district diverts the ground beef it receives as commodity to a processor, where the meat is made into products. The district's processor had another 11,000 pounds of the meat. She added that the processor is handling that meat's destruction.
The USDA said it will provide replacement commodities.
“We were pretty lucky,” she said.
Peterson said it's not uncommon to get recalls on some items produced by private companies, such as a recent green bean recall. She added that the California Department of Health sends out regular updates on food recall issues.
However, she said this was the first time a recall involved products distributed by the USDA.
Denise Moore of the California Department of Education's Food Distribution Program told Lake County News that, in all, state schools received 15.8 million pounds of recalled beef valued at $24 million.
Of that, it's estimated that 4.2 million pounds – or about 152,216 cases of beef – have been destroyed, with the remainder having been consumed, said Moore.
However, Moore said that only 78-percent of school districts have responded to requests the Department of Education has made for information about their beef supplies, so estimates of how much may have been consumed could change.
E-mail Elizabeth Larson at
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LAKE COUNTY – A teacher's compassion and quick thinking helped save a small animal in a case of animal cruelty the likes of which local officials say they haven't before encountered.
Lake County Animal Care and Control and Clearlake Police reported that two girls have been arrested and are in Juvenile Hall, facing charges of intentional animal cruelty for putting a hamster in a microwave. Their names have not been released because of their age.
“I've never seen anything like this,” said Clearlake Police Officer Carl Miller, who worked with Animal Care and Control to investigate the case.
Nor had Animal Care and Control Officer Morgan Hermann, who said she hasn't encountered an animal cruelty case involving children in her five years with the agency.
Amazingly, the little hamster, a female named Bugsy, survived the ordeal, said Hermann.
Animal Care and Control received an anonymous call about the Bugsy's case last week, said Hermann, while the students in question – who attend schools in the Konocti Unified School District – were on spring break.
She said she called Miller, Konocti Unified's school resource officer since last September, who Hermann said conducted the entire investigation, which wrapped up Monday.
Miller said that the microwave incident occurred in December, and that it was widely known at the school where the girls attended.
One of the girls recently brought Bugsy back to school to give her back to her original owner, said Miller. That's when a teacher, who had heard about the situation, took custody of the hamster to protect it from further harm.
Miller said he considers the case a serious one.
Animal advocacy groups also consider such cases of special concern. A report by the Humane Society of the United States explains that children who are allowed to harm animals are more likely to be violent later in life.
After getting the call Hermann took Bugsy to Wasson Memorial Veterinary Clinic to be checked out.
Although Bugsy survived, she didn't come away from the experience unscathed, said Hermann.
Three of Bugsy's four tiny feet were burned off, leaving just one front foot, the left front, for her to eat with, said Hermann.
The wounds had healed since the incident occurred, and Bugsy is plump and getting around OK, said Hermann. “The hamster is doing very, very well.”
The two girls alleged to have injured Bugsy remain in Juvenile Hall, said Miller.
As for Bugsy, she was released by Wasson Memorial on Monday, said Hermann.
The little hamster will be going back to live with the woman who rescued her and had been taking good care of her since, said Hermann.
E-mail Elizabeth Larson at
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- Written by: Lake County News reports
The Lakeport Chamber of Commerce, which organizes the event, reported the following award winners.
Man of the Year: Dave Fesmire.
Woman of the Year: Ginny Craven.
Large Business: Shannon Ridge Winery and Vineyard.
Small Business: Kerrie's Quilting.
Youth Advocate, Volunteer: Helen Finch.
Youth Advocate, Professional: Adam Garcia.
Male Student: Erik Jameson.
Female Student: Krista Collins.
Agriculture Award: Lake County Farm Bureau, California Women for Agriculture.
Arts Award, Amateur: Shelby Posada.
Arts Award, Professional: Ron Keas.
Volunteer: William Barrows and Connie Miller.
Marla Ruzicka Humanitarian Award: Susie Wiloth.
Senior of the Year: Floyd Surber.
Best Idea: Team DUI.
Organizaiton, Nonprofit: Lakeside Dental Clinic.
Organization, Volunteer: Sponsoring Survivorship.
Lifetime Achievement, Male: Don Emerson.
Lifetime Achievement, Couple: Robert and Nadine Strauss.
Lifetime Achievement, Female: Joan Steele Holman.
Local Hero: Javier Batres.
New Business: Wild About Books.
Environmental: Tom and Val Nixon.
Spirit: Kacey Tallman.
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