By Nancy Vigran @TheSunGazette
TULARE – Tulare Councilman Greg Nunley had a lot of hot water thrown at him on Friday, August 3, with the filing of a lawsuit against him and his company, Great Valley Builders. Also named in the suit were Driven Construction, Inc., Hidden Oaks Development Company, Inc., and Del Lago Place, LLC, along with the City of Tulare.
Councilman Nunley is fighting back
Twelve causes of action were listed. At the forefront are alleged charges of unpaid development fees, impermissible use of Nunley’s official positon as councilman to influence a governmental decision, a threat of retaliation against city staff, and a violation of the Fair Political Practice Commission (FPPC) for failure to file a 2018 Statement of Economic Interests form with the city.
The suit was filed by Visalia attorney Michael Lampe for his client, David Frost, a retired lieutenant of the Tulare Police Department. Frost told the Sun-Gazette through Lampe, “that he is a concerned citizen who has filed this action of a sense of civic responsibility.”
On Monday, August 6, a letter to the press was released from Lampe stating Driven Construction, Inc. was being dismissed from the case. The letter stated, Nunley had transferred all of his shares of stock in the company to former partner, Victor Cervantes, in June 2016, two days following a recording of a fee deferral agreement with the City. As such Driven Construction and Cervantes were relieved of any responsibility in the lawsuit. Cervantes, who met with Lampe, said he was never told of the deferral agreement by Nunley, and was never a party to it.
Driven had been named in the First Cause of Action in the suit, which claims a violation of the Political Reform Act, stating Nunley and Driven has not paid development impact fees of $336,249 on a project called Oak Creek Apartments, a 32-unit multifamily residential property.
First Cause of Action
The First Cause of Action states Nunley applied for a building permit for the property in March, 2016. According to the language of the permit, it states the developer, Driven, is the owner of the property.
This is common language, Nunley said. The city draws up the permit, and the developer or his representative, in this case the project manager, reviews and signs the permit.
Josh McDonnell, community and economic development director for Tulare, was asked about the
common language used in building permits, and referred the Sun-Gazette to the city attorney for comment.
The suit claims Nunley knowingly falsified himself as owner of the property. He admits he was never owner of the property, but rather the developer. “The city knew that,” he said.
The development fees imposed amounted to $336,249. And, while these fees are ordinarily due prior or upon issuance of the building permit, they may also be deferred through a deferral agreement, which was done in this case in June 2016, and offered as an exhibit accompanying the lawsuit. The lawsuit alleges these fees are past due.
Not so said Nunley, pointing out the deferral agreement clearly states, the “Developer hereby promises to pay the City the full amount of said fees, without reduction or offset, on the date on which the City conducts a final inspection of the said Project or on the date a Certificate of Occupancy is issued by the City, or on the date escrow closes . . .”
No final inspection has been performed on the property, Nunley said. A temporary right to occupy was, however, given.
According to the August 6 press release, Cervantes told Lampe of a text conversation between himself and Nunley, in which Cervantes asked Nunley why he had not cleared the Driven name. Nunley was no longer a partner and had released Driven of any responsibility of the project. Nunley responded telling Cervantes not to worry.
“ . . . It’s all BS from Lampe,” Nunley had written in response, also stating the city was dragging its feet and that the city actually owes Nunley reimbursement for a storm drain pond in the amount of $520K which would clear the fees on the apartments.
Nunley shared with the Sun-Gazette a copy of the Oversized Reimbursement Agreement for the Oak Creek Storm Drainage Facilities, which was sent to him for review on Friday afternoon – the same day the lawsuit was filed. It states, “The total estimated costs eligible for oversize reimbursement is $271,600 plus the value of the land associated with the supplemental property dedications identified above, which will be determined through a subsequent property appraisal.”
Further Action Causes
Other actions within the case are similar, claiming unpaid fees, misrepresentation by Nunley of ownership of some of the properties in which he and his company, Great Valley Builders, are developing, and conflicts of interest for a public official.
Nunley maintains he had checked into any potential conflicts between his work as a developer and builder for a member of city council, prior to his run for council – he was told and found it wasn’t so.
“I can still develop land, and I can do subdivisions,” he said, thus combating the claims of using his position, as councilman, “to advance his own private interests at the expense of the public.”
The 5th and 6th Cause(s) of Action deals with a property referred to as 2088 Diamonte Drive, which claims non-payment by the developed or development impact fees of $14,277. This is a property which Nunley started to build for Tulare residents, Richard and Linda Wilbourn. Nunley admits to not owning the property at the time the building permit was filed, again citing the common language used in the permit. He also said the Wilbourns wanted to defer the fees.
During the work, the Wilbourns decided they wanted to finish the project themselves, Nunley said, relieving Great Valley Builders of any and all responsibilities with the project. She placed these changes in her attorney’s hands, he said. Meanwhile, upon completion of the project, the city gave the OK for occupancy.
“The city screwed up,” Nunley said, “they finalized with no demand for fees before occupancy.”
The 7th Cause of Action refers to a stop work notice, called a red tag, placed on an apartment complex at 2013 and 2017 Bella Oaks Dr. The suit claims the “red tag was issued due to the failure of Nunley or his employees to call for two required inspections.”
This complaint also states, “. . . Nunley, upon hearing of the actions described above, called Willard Epps, the Interim City Manager, and demanded that at least two city employees be fired.”
It further states, “Plaintiff alleges on information and belief that Interim City Manager Epps refused to comply with Nunley’s demand, at which time Nunley threatened to have Epps removed from his position as Interim City Manager and have Darlene Mata brought in to replace him.”
Epps is the city’s fire department chief, and was named interim city manager upon the firing of the former city manager in March. Mata is community development director for the City of Hanford, and has formerly done consulting work for Nunley’s business.
Nunley admits to the red tag, the first he has received within Tulare in this 14 years in the construction business, he said. It was placed on the development for a lack of “draft stops” by the sheet rock hangers, a feature which is utilized to prevent a potential fire from jumping from one building to another, which need to be taped and sealed with fire repellent tape, his staff explained. The inspector required the draft stops to be placed, and once completed, another inspection revealed the draft stops were placed incorrectly and should have been placed between the two garages, not between the garage and the dwelling.
Nunley admits to being frustrated. He described the city mandating a decomposed granite road for temporary access for the development of an apartment site known as the Seminole project. The road cost approximately $50,000 to implement and cost four months of time, Nunley said.
Nunley maintains he is being “held to a higher standard,” then other developers by Tulare. There is a set of “Nunley rules,” rules which are allegedly utilized only for his projects. He is friends with many other local builders, and “they don’t get nearly the number of corrections, I do,” he added. Nor does he have trouble with other cities, such as Visalia or the Tulare County personnel, when building outside of Tulare.
John Karlie, a chief building official for Tulare, has been the primary inspector for all of Nunley’s projects for the past several years. Nunley asserts inspections for his properties are unusually harsh as compared to other builders’ projects. He admits to having called interim city manager Epps, but rather to ask another inspector be designated for his projects, not for anyone to be fired, and only with regard to Karlie. He adds there was not a second employee involved
Epps’ response, according to the lawsuit and Nunley, was that he couldn’t do that.
“I told Willard I would like to not have John on my sites, because he is mad at me and I don’t want repercussions,” Nunley said.
City Building Inspectors Shorthanded
McDonnell said that type of request would be highly unusual, and that he, personally, had not received such a request. He also stated the inspection staff was currently smaller than usual. The city employs four inspectors, he said. One is, and has been for some time, on medical leave. A second is “brand-spanking new,” having been hired three to four months ago. He is learning the ropes, and doing quite well, McDonnell said, but has not been available to do his own inspections, as of yet. This has left Karlie and one other inspector, as veterans, to inspect all of the projects within the city.
Nunley adamantly denies ever having threatened Epps’ position as interim city manager. Epps replied to this reporter that he could not comment on the conversation.
Nunley further said, Karlie routinely comes by the Great Valley Builders’ office to shoot the breeze with employees, during working hours. He complains, Nunley said, of city employees from within his department as well as other city staff, and with regard to having to work with them. Nunley, while he has no proof, assumes Karlie also discusses the Great Valley Builders’ employees with city staff. This creates animosity and ill-will between the two making it difficult for Great Valley Builders’ staff to work with the city, Nunley asserts. Some Great Valley Builders’ employees concur with the allegations, and that it has been going on for years.
The Sun-Gazette has reached out to Karlie for comment, but has not received a return call.
Conflicts of Interest
Nunley also addressed the issues of conflict of interest and a lack of recusal from council matters relating to potential conflicts of interest for his business, asserted in the lawsuit.
In the 9th Cause of Action, the claim was made that Nunley, “failed to publicly identify the financial interest giving rise to his conflict of interest,” with a city council agenda item regarding the Tesori subdivision, of which he is the developer. The suit also states, he “failed to immediately step down from the council dais,” and he “failed to leave the room until the council’s discussion and vote was concluded.”
It further claims, “Nunley directly addressed the council and urged the council to amend the agreement.”
These allegations were said to occur during a June 5 council meeting, when a 12-month extension of the Tesori Subdivision Improvement was sought and received.
Nunley asserts that the matter was on the consent calendar and not during general business. He did recuse himself and stepped down from the dais to sit into the audience, which he said he has the right to do.
When Michael Noland, an attorney for another developer, as well as Lampe, spoke out against the extension, Nunley decided to speak up in defense.
“That is my right,” he told this reporter. “I am still a citizen.”
According to the minutes of that council meeting, the other four council members discussed whether the appropriate bond was in place, required for the extension. The item was placed on hold until the end of the meeting, when staff members had a chance to research and find that indeed the bond was in place, and the four remaining council members, less Nunley who was recused, approved the extension.
Lastly, Nunley addressed the 12th Cause of Action, a failure to file his 2018 Statement of Economic Interests, as mandated for elected officials by the FPPC. It was due on April 2. According to Nunley he had dropped it if off at City Hall, but said it had been misplaced. He added that he plans on dropping off another copy this week.
Councilman Nunley was born and raised in Tulare. He ran for council, in part, because Tulare “had become the laughing stock of the Valley,” he said. He wanted to work toward the city attracting commercial development for shoppers off of Highway 99, along with meeting the needs of local residents, in the hopes of attracting tax dollars to the city. He feels since he is not always in alignment with some of the power players in the local political environment, he is taking extra heat.
Elected by a narrow margin in 2016, he ran on wanting the city to retain its own city planner, improving the water systems, and listening to existing business owners to help encourage growth. These are things the council has done and are working toward, he said. He also campaigned on pro-growth and advocated for a new fire station, stating that a nine-minute response time to some areas in eastern Tulare is not acceptable. That new station has not yet happened.
The Sun-Gazette reached out to the city’s interim attorney, Mario Zamora, with regard to past due fees and common language utilized in development permits by the city. This article will be updated upon his response.