Fee debate lingers
By Andy Gates - Argus Observer
Sunday, April 8, 2007 12:57 AM PDT
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| The city of Ontario and retail giant Wal-Mart (above, right in this aerial photograph) are still trying to work out a deal regarding infrastructure payments. The city asserts the company owes more than $800,000, but Wal-Mart says it owes just over $200,000. |
ONTARIO - Despite some headway two months ago, the debate continues between the City of Ontario and Wal-Mart concerning fees the retail giant will pay for transportation improvements near the popular store.
The city and Wal-Mart have yet to sign an agreement that would grant the city funds for road work along Idaho Avenue and East Lane and release a building permit to Wal-Mart so it can fix the store roof.
The crux of the current lag stems from the city attorney’s interpretation of potentially problematic language within the proposed agreement between Ontario and Wal-Mart.
A trail of letters between the city and Wal-Mart dates back to 2000, along with detail disputes regarding the “fair share” fee amount Wal-Mart should pay to Ontario for transportation improvements near the store.
The city asserted Wal-Mart should pay $873,000 for the infrastructure work, which other surrounding business would also help fund.
However, Wal-Mart contends it should pay much less — $263,173 — to the city for the road improvements.
Wal-Mart needs to repair its roof, and the city has not granted the store a building permit because of the monetary rift.
According to a Dec. 19, 2006 letter from Wal-Mart Real Estate Business Trust to the city of Ontario, “Wal-Mart understands that the city is reluctant to grant a building permit applicable to the roof repair (or any other permit) until the parties have come to an agreement with respect to Wal-Mart’s contribution for the traffic improvements. The roof is in need of repair and Wal-Mart is concerned that a failure to timely repair the roof may cause a health and safety issues at the store.”
The Ontario City Council appeared to have made some headway Feb. 5 in the debate, when it approved a resolution authorizing Ontario City Manager Scott Trainor to enter into an agreement with Wal-Mart. That pact came in the form of a compromise proposed by Trainor, where Wal-Mart would deposit $586,000 into an escrow account for the road improvements, and release $300,000 immediately to the city in exchange for a building permit. The Ontario City Council also agreed in February that if Wal-Mart and the city do not settle on the amount owed by July 1, then the remaining escrow funds should be released to the city.
A proposed agreement to be signed by the Director of Wal-Mart Realty, Donald Etheredge, and Ontario Counsel Greg Embrey, of the Ontario law firm Yturri Rose, has not been signed by either, according to a copy of the agreement provided by the city last week.
Embrey received a copy of the agreement letter March 12, he told the City Council March 30 during a work session. Embrey said at the work session the document contains risky language that could potentially endanger the city’s ability to collect more than $300,000 from Wal-Mart. For example, the proposed agreement letter cites a correspondence between Wal-Mart and the city from the year 2000 that states, “Wal-Mart and the City acknowledged that Wal-Mart’s fair share of the improvement costs was not anticipated to exceed $300,000.”
Trainor said last week the proposed agreement letter will be discussed further between Embrey and Wal-Mart and references to the 2000 letter will probably be “cut out.”
Typically, agreements involving the city will be reviewed by the city’s counsel before they are sent to another party, Trainor told the City Council March 30.
However, in this case, Trainor said last week, there were two attorneys working with the city from the Yturri Rose law firm.
“Our assumption was that Greg (Embrey) had the information, but apparently he didn’t,” Trainor said, and most of the proposed agreement letter was based on conversations the city had with another Yturri Rose lawyer.
Ontario Mayor Joe Dominick said Friday that he had heard no updates on the issue with Wal-Mart.
“The last I was told, our attorney had it (the agreement letter),” Dominick said.
