College Place releases details of Gilbert lawsuit dismissal

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Timeline

JULY 2008: GA Group Properties enters into a development agreement with the city of College Place for construction of Commercial Drive. Agreement calls for GA Group to make initial payment of $150,000 to city followed by annual payments of $135,000 over next 15 years. Amount of annual payments to be minus sales tax generated by auto dealership paid to the city.

DEC. 2008: Commercial Drive opens. GA Group fails to make initial payment of $150,000.

FEB. 15, 2009: GA Group fails to make first annual payment of $135,000.

FEB. 15, 2010: GA Group fails to make second annual payment of $135,000.

SEPT. 1, 2010: Agreement between city and GA Group modifying development agreement to allow GA Group to obtain new financing. Agreement requires GA Group to pay city $171,512.07 to cure earlier failure to pay the initial $150,000. New agreement also moves start of annual $135,000 payments to Feb. 15, 2012.

JULY 6, 2011: Gilbert Auto Honda dealership opens.

FEB.-MARCH 15, 2012: GA Group defaults on $135,000 payment required by modification agreement.

APRIL 3, 2012: City serves GA group with notice of default for failure to make $135,000 payment as called for in the development agreement.

JAN. 29, 2013: Lawsuit filed in Walla Walla Superior Court by city of College Place against GA Group, Gilbert Import and Mark W. and Susan Gilbert. Suit demands payment of $2,025,000 ($135,000 times 15) less tax revenues to the city from sales generated by Gilbert Auto Honda, plus 12 percent annual interest from March 23, 2012.

Feb. 21, 2013: The city and GA Group Properties reach an agreement and the lawsuit is dismissed.

COLLEGE PLACE — A $25,000 payment to the city of College Place last week paved the way to dismissal of a $2 million lawsuit against a local auto dealer.

The payment was made Thursday by GA Group Properties, which along with Mark W. and Susan Gilbert and Gilbert Imports were being sued by the city in connection with a road project built in 2008.

Although the city and Gilbert announced the dismissal of the suit Friday in a joint announcement, no details were made available. The Union-Bulletin requested the city release the information it cannot legally be withheld under the state’s Public Disclosure Act.

Under the terms of the agreement, GA Group Properties will pay the city of College Place $100,000 to satisfy its obligation under a development agreement between the city and GA Group for construction of Commercial Drive. The roadway was built to serve the Gilbert Auto Honda dealership and a bank, both of which are located on off of State Route 125.

Along with the auto dealership and the bank, city officials also hoped the new road would attract other businesses to locate in the area.

According to the agreement, GA Group Properties paid $25,000 “in the form of a currently dated cashier’s check” to the city Thursday morning. It is required to pay another $25,000, also by cashier’s check, by 5 p.m. March 4.

The final payment of $50,000 is due on March 18.

In exchange for receiving the first payment on Thursday, the city agreed to dismiss the lawsuit pending in Walla Walla County Superior Court against GA Group. The order of dismissal was signed by Superior Court Judge Scott Wolfram on that day.

GA Group Properties is also required to provide certified copies of the auto dealership’s 2012 sales tax returns to the city by April 15.

After the payments have been completed on March 18, the agreement calls for company representatives and city officials to meet within 30 days “for the sole purpose of discussing how the city has determined the amount that it receives from the sales tax revenues from the Department of Revenue.”

An attempt to keep the details of the settlement confidential is spelled out in paragraph eight.

The paragraph required the GA Group, which was represented by Walla Walla attorney Kris Hedine, and the city to jointly approve the wording of a press release. This was sent Friday morning, but the release stated only that the lawsuit had been dismissed and “both parties are looking forward to a continued relationship in the future and the future expansion of the auto mall project in College Place.”

The paragraph then specified that “after that release had been issued, neither party will communicate further with the press on this specific matter unless the city is obligated under the (Public Disclosure Act) to release documents to the press ... in which case the city shall have the right to communicate further ...”

Attempts to contact city officials, Mark Gilbert and the attorneys involved in the case were not successful Friday morning. After a reporter informed City Administrator Pat Reay by email that the city was required under the Public Disclosure Act to release the details of the settlement, he emailed the documents to the paper Friday afternoon.

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