The legal wrangling over Preston Park—a 354-unit affordable housing complex in Marina—has finally come to an end: Following a closed session meeting of the Fort Ord Reuse Authority Board of Directors, it was made public that Marina has agreed to buy out FORA’s 50-percent share of Preston Park for $35 million.
Details of the agreement are still being worked out.
The deal comes two years of litigation that started in 2012, when FORA put the property on the market, and Marina filed suit to block the sale. FORA, which holds title to Preston Park, argued it had to sell the property to pay back an $18 million loan to Rabobank that was due June 15 of this year, a date later extended to Dec. 15.
Marina, which owns the other 50-percent interest in Preston Park but doesn’t hold title, argued the title should be transferred to the city free of charge until the city could secure financing to buy out FORA’s half.
“We didn’t like the idea of losing all that affordable housing to a third party,” says Marina Mayor Bruce Delgado. “They could increase rents to where it would not longer be affordable.
“We want to keep affordable housing there, and keep that revenue stream for many years into the future,” he says, adding that FORA and Marina both receive about $1.75 million in revenue annually from Preston Park. “The holy grail for a city is to get sustainable revenue.”
Sustainable revenue is not a goal FORA shares: The agency is charged with liquidating all its holdings before it sunsets in 2020, as well as pay back Rabobank its $18 million loan on Preston Park by Dec. 15, a date FORA attorney Jon Giffen now believes FORA will make.
Today’s agreement comes after a court-ordered conference Nov. 7, which was followed by a Marina City Council closed session meeting Nov. 10 and FORA board closed session meeting today. The two parties were scheduled to meet in court again Nov. 17.
“It’s pretty much all confidential,” Giffen says. “But it ended in the product we have now.”