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Carson Developers Miss the Latest Deadline to Purchase Site for Hotel

July 02, 1987

Carson officials and developers are continuing protracted efforts to put a hotel and office complex near the city Community Center despite new difficulties.

Because of financing and legal problems, the developers, Gestec Properties and the Muller Co., missed the latest deadline to buy the 6.3-acre site from the city.

On Monday, City Atty. Glenn Watson told the City Council that Carson's agreement with the developers had lapsed because they had failed to put up $3.05 million and satisfactory performance bonds for the construction.

However, Stephen Muller, president of the Muller Co., which is supposed to build a six-story office building on the site, said both developers were willing to go ahead with the deal and the council decided to continue negotiations.

On Tuesday, Mayor Pro Tem Vera Robles DeWitt and Councilwoman Sylvia Muise met with the developers.

At a special meeting Wednesday, the council offered the developers a new deadline: Open escrow July 11 and close five days later. The sale price of the land was increased $40,000 to compensate the city for delays.

In addition, the council agreed to make the land sale contingent on financing. Construction of a free-standing restaurant on the site was made contingent on the availability of parking and a construction timetable, which had earlier been the subject of dispute, was set more precisely.

Muller said he had not been able to meet earlier deadlines because of delays in obtaining signed documents from the city that are required by his bank. He estimated that a decision on his loan application would take three to four weeks.

In addition, he said, the departure of Patricia Nemeth, the former director of community development who had been in charge of the project, has caused problems in communicating with the city administration.

The city, which signed a preliminary agreement with the developers in February, 1986, amended it three times, most recently on June 15.

Before working with Gestec Properties and the Muller Co., the city negotiated for three years with the Feinberg Group to build a Hilton hotel on the site. That deal evaporated in 1985, with city officials saying the Feinberg Group failed to obtain financing and J. Jay Feinberg, president of the development firm, saying that the city administration had failed to approve the project on several occasions when financing was available.

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