HomeMy WebLinkAboutAgenda Report - May 3, 2023 C-13CITY OF
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CALIFORNIA
COUNCIL COMMUNICATION
AGENDA ITEM
C,0 13
AGENDA TITLE: Approve Waiver of Potential Conflict of Interest with Goldfarb & Lipman LLP Regarding
Their Representation of the Housing Authority of the County of San Joaquin in
Connection with the Salas Park Supportive Housing Project and Authorize the City
Manager to Execute a Consent to the Waiver
MEETING DATE: May 5, 2023
PREPARED BY: City Attorney
RECOMMENDED ACTION: Approve waiver of potential conflict of interest with Goldfarb & Lipman
LLP, regarding their representation of the Housing Authority of the County
of San Joaquin in connection with the Salas Park Supportive Housing
Project and authorize the City Manager to execute a consent to the waiver.
BACKGROUND INFORMATION: The law firm of Goldfarb & Lipman LLP has in the past and currently
represents both the City of Lodi and the Housing Authority of the County
of San Joaquin (HACSJ) on various matters and likely will continue to do
so In the future. Goldfarb & Lipman is seeking a waiver of a potential conflict of interest and consent to
represent HACSJ in connection with an affordable housing development to be located in the City of Lodi and
known as the Sales Park Supportive Housing Project (the Project). Currently, Goldfarb & Lipman represents
the City in matters unrelated to the Project.
The City will be selling land to HACSJ, and HACSJ will lease the land to an affiliate that will own the property
improvements. Goldfarb & Lipman proposes to represent HACSJ regarding the development and financing of
the Project, and one of the sources of the financing will be a below market rate Interest loan from the City for
the land purchase price. The City Attorney's Office will be representing the City in connection with the Project,
Including the sale of the land and the below market Interest rate loan from the City to HACSJ.
While Goldfarb Lipman is unaware of an existing conflict of Interest created by its existing relationship with the
City or HACSJ, as attorneys, Goldfarb & Lipman are governed by the Rules of Professional Conduct of the
State Bar of California. In this instance, Rules 1.1, 1.4, 1.6, 1.7, 1.8.2, 1.8, and 1.10 are applicable. As such,
Goldfarb & Lipman must obtain informed written consents from both HACSJ and the City for Goldfarb &
Lipman to represent HACSJ in connection with the Project.
APPROVED: s[ =v sF•, (APF rr 2023 11:4.4 ror
Stephen Schwabauer, City Manager
Approve Waiver of Potential Conflict of Interest with Goldfarb & Lipman LLP Regarding Their Representation of the Housing Authority
of (lie County of San Joaquin In Connection with the Sala$ Park Supportive Houaing Project and Authorize the City Manager to Execute
a Consent to the Waiver
May 5, 2023
Page 2 of 2
If an actual conflict should arise related to the Project in which the interest of HACSJ is adverse to the interest
of the City, or any Irtigation arises between the City and HACSJ as the result of the Project, Goldfarb & Lipman
will not represent either HACSJ or the City and both the City and HACSJ will secure other representation.
Goldfarb & Lipman has submitted a request, which is attached, for a waiver of any potential conflict of interest
and Consent to be signed by HACSJ and the City. Contingent upon HACSJ's signature of the Consent, staff
requests that the City Council waive any potential conflict of Interest which may be deemed to exist as a result
of Goldfarb & Lipman's representation of HACSJ in connection with the Project and authorize the City Manager
to execute the Consent on behalf of the City.
FISCAL IMPACT: Not applicable.
FUNDING AVAILABLE: Not applicable.
1
Janice D. Mag tch .
City Attorney
Attachment: April 19, 2023 Letter from Goldfarb & Lipman LLP re potential conflict of Interest — Sales Park Proposed Development
7 o l U fQ r b 1300 Clay Street, Eleventh Floor
I I pma n Oakland, California 94612
otfor neyS 510836-6336
M David Kroot
April 19, 2023
Lynn Hutchins
City Attorney
Karen M. Tiedemann
via electronic mail
Thomas H. Webber
Peter Ragsdale
Dianne Jackson McLean
Executive Director
Elizabeth R. Klueck
Housing Authority of the County of San Joaquin
Robert C. Mills
2575 Grand Canal Boulevard, Suite 220
Isabel L. Brown
Stockton, CA 95207
James T. Diamond, Jr.
("Goldfarb & Lipman") to represent HACSJ and DCDC in connection with an affordable
Margaret F, Jung
Peter Ragsdale
Heather J. Gould
Executive Director
William F. DiCamillo
Delta Community Developers Corp.
Amy DeVaudreuil
2575 Grand Canal Boulevard, Suite 220
Barbara E. Kautz
Stockton, CA 95207
Rafael Yaqui6n
Janice Magdich
Celia W. Lee
City Attorney
Dolores Bastian Dalton
City of Lodi
Joshua J. Mason
221 W. Pine Street
Jeffrey A, Streiffer
Lodi CA 95201
Elizabeth R. Klueck
Authority of the County of San Joaquin ("HACSJ" ), Delta Community Developers Corp.,
Jhailo R, Brown
Re: Potential Conflict of Interest Salas Park Proposed Development
Gabrielle B. Janssens
Rye P. Murphy
Dear Mr. Ragsdale and Ms. Magdich:
Marc A. Bentzen
Benjamin Funk
We write this letter to disclose our past and current representation of the Housing
Authority of the County of San Joaquin ("HACSJ" ), Delta Community Developers Corp.,
T, Nguyen
a nonprofit instrumentality of HACSJ ("DCDC"), and the City of Lodi (the "City") and
Katie
Katie D
to request the consent of HACSJ, DCDC, and the City for Goldfarb & Lipman LLP
S. H atonhau,
Matthew S. Heaton
("Goldfarb & Lipman") to represent HACSJ and DCDC in connection with an affordable
Nazonin Salehi
housing development (the "Project") in the City known as Salas Park Supportive
Erin C. Lopeyrolerie
Housing.
Minda Bautista Hickey
Connor T. Kratz
The Project is an affordable housing development in which HACSJ and DCDC are
Colleen A. Wisel
developing supportive housing for low income households (the "Affordable Housing
Development"). The City will be selling the land to HACSJ, and HACSJ will lease the
Thomas J. Levendosky
land to an affiliate of DCDC that will own the improvements. The other anticipated
Los Angeles
sources of funds for the Project are an award of Low -Income Housing Tax Credits, other
213 627-6336
State or Federal funds, and private sources. In addition, the DCDC affiliate anticipates
receiving project based section 8 housing vouchers for the supportive housing units from
Son Diego
HACSJ.
619 239-6336
Goldfarb & Lipman LLP
2048\01\3500418.2
Peter Ragsdale
Janice Magdich
April 19, 2023
Page 2
Specifically, Goldfarb & Lipman will represent HACSJ and DCDC regarding the
development and financing of the Project, and one of the sources of the financing for the
Project will be a below market rate interest loan from the City for the land purchase price.
Goldfarb & Lipman will not be representing the City in connection with the Project, as
the Office of the City Attorney or other outside counsel will represent the City in
connection with the Project.
The specific purpose of this letter is to advise you of a potential conflict of interest of
Goldfarb & Lipman due to the existing and continued relationships that Goldfarb &
Lipman has separately with HACSJ, DCDC, and the City, and the proposed
representation of HACSJ and DCDC in the Project as described below. To undertake
this representation, we are required to: (1) disclose in writing our existing relationships
with HACSJ, DCDC, and the City, and (2) obtain the informed written consent of
HACSJ, DCDC, and the City to such potential conflict of interest, as described in this
letter.
Existing Relationships.
HACSJ and DCDC are existing clients of Goldfarb & Lipman. We have, and continue to
represent, HACSJ and DCDC in connection with development and operations of
affordable housing properties, and related activities. Our firm also has been selected to
act as the General Counsel for HACSJ and DCDC. We provide transactional services to
HACSJ and DCDC with respect to site control; design and construction; construction and
permanent financing, including grants and soft loans from federal, state, and local
agencies; equity transactions; operations and management; and litigation. We believe
that we will be able to provide competent and diligent representation to HACSJ and
DCDC with respect to the Project.
The City is also an existing client of Goldfarb & Lipman. We have, and continue to
represent, the City regarding land use issues in connection with manufactured housing
requirements and structuring for properties in the City other than the Project.
II. Potential Conflict of Interest.
While we are unaware of any current conflict of interest created by our existing
relationships described in Section I above in relation to the Project, as attorneys, we are
governed by specific rules relating to our representation of clients when potential
conflicts of interest exist. We must disclose certain information, and obtain the informed
written consents of HACSJ, DCDC, and the City to represent HACSJ and DCDC in
connection with the Project as described in this letter, in accordance with Rules 1. 1, 1.4,
1.6, 1.7, 1.8.2, 1.9 and 1.10 of the Rules of Professional Conduct of the State Bar of
California (the "CRPC").
Our representation of HACSJ and DCDC in connection with the Project could potentially
2048\0113500418.2
Peter Ragsdale
Janice Magdich
April 19, 2023
Page 3
create a conflict of interest for Goldfarb & Lipman related to, among other matters,
information that we have regarding the City that could be relevant to the Project, but due
to our duty of confidentiality and loyalty, we would be unable to disclose such
information to HACSJ and DCDC. At this time, we do not believe that there is an actual
conflict of interest for Goldfarb & Lipman, and we believe that we can competently
represent HACSJ and DCDC in the Project and still maintain our independent judgement
and duty of loyalty to all of you in unrelated matters. In addition, we do not believe that
we have obtained any confidential information from the City which is material to our
proposed representation of HACSJ and DCDC in the Project, or from HACSJ or DCDC
that is material to our continued representation of the City in unrelated matters.
However, if an actual dispute between HACSJ or DCDC and the City should arise related
to the Project, our firm will withdraw from representing HACSJ and DCDC, and HACSJ
and DCDC will acquire alternate counsel.
III. Informed Written Consent.
You should thoroughly review and consider the matters discussed in this letter, and
consider seeking independent counsel before providing your consent. If, after such
review, you consent to Goldfarb & Lipman representing HACSJ and DCDC in the
manner outlined above, please sign and return the attached consent form: (i)
acknowledging that you have been advised of Goldfarb & Lipman's past and continuing
relationships with each of you; (ii) acknowledging that you have been advised to Rules
1. 1, 1.4, 1.6, 1.7, 1.8.2, 1.9 and 1.10 and the potential conflict of interest associated with
our representation of HACSJ and DCDC regarding the Project; and (iii) that you
nevertheless consent to our representation of HACSJ and DCDC in connection with the
Proj ect.
If you have any questions regarding this letter or our representation of HACSJ and
DCDC, please call me before signing and returning the enclosed copy of this letter.
Sincerely,
M DAVID KROOT
2048\01\3500418.2
Peter Ragsdale
Janice Magdich
April 19, 2023
Page 4
CONSENT
Goldfarb & Lipman has explained to HACSJ, DCDC. and the City: (i) Goldfarb &
Lipman's past and continuing relationships with HACSJ, DCDC. and the City, and (ii)
CRPC Rules 1. 1, 1.4, 1.6, 1.7, 1.8.2, 1.9 and 1.10 and the potential conflict of interest in
relation to Goldfarb & Lipman's proposed representation of HACSJ and DCDC regarding
the Project and the possible consequences of this conflict. The undersigned nevertheless
consent to representation by Goldfarb & Lipman of HACSJ and DCDC regarding the
Project and gives approval to such representation as described in this letter.
We understand that we have the right to seek independent counsel before signing this
consent or at any future time.
Dated:
Dated:
2048\0113500418.2
HOUSING AUTHORITY OF THE
COUNTY OF SAN JOAQUIN, a public
body, corporate and politic
By:
Name: Peter Ragsdale
Its: Executive Director
DELTA COMMUNITY DEVELOPERS
CORP., a California nonprofit public benefit
corporation
Name: Peter Ragsdale
Its: Executive Director
Peter Ragsdale
Janice Magdich
April 19, 2023
Page 5
Dated:
2048\01\3500418.2
CITY OF LODI, a California municipal
corporation
By: -----
Name:
----
Name:
Its:
Approved as to Form:
KATIE Q. LUCCHESI
Deputy City Attorney