Clearlake authorizes staff to draft loan to finish 30 Sixth Avenue road after developer delays

The Clearlake City Council on Nov. 3 directed the city manager to develop and execute a loan agreement to finish road and storm‑drainage work for the 30 Sixth Avenue subdivision, a project linked to a prior agreement that sold 18 city lots to a private developer in exchange for off‑site improvements.

City Manager Flora told council the original developer relationship broke down, two houses were constructed but other lots and required infrastructure remained unfinished, and some construction failed to meet site plans and setback requirements. Flora said the city can pursue a judicial remedy to reclaim lots, but staff view that path as costly and uncertain and therefore recommend a loan approach to complete public improvements.

"So what they're asking, is that we provide up to 300,000 to them for construction of the new road, storm drainage improvements, and any remaining utility work necessary to complete that road," Flora said.

Council members repeatedly asked how the city would secure repayment. Staff suggested multiple protections: recording liens on remaining lots, a loan agreement with enforceable repayment terms, personal guarantees where obtainable and the possibility of requiring an early payoff tied to property sales or a 24‑month repayment schedule. Councilmembers expressed concern about accepting second‑position deeds of trust and questioned the value of personal guarantees when the property ownership structure had recently changed via divorce.

Residents and the District 2 supervisor urged the council to protect public infrastructure by ensuring roads and sidewalks are built first and to avoid leaving neighbors with persistent maintenance problems. Margaret Garcia asked whether reclaiming the lots outright would be simpler; staff said a clawback (deed reverter) remains an option but could be legally complex and time‑consuming.

After discussion, Councilmember Kramer moved and Councilmember Overton seconded authorization for the city manager to prepare and execute a loan agreement; the motion carried on a roll call of four Aye votes (Overton, Kramer, Claffey, Mayor Slotin) and one abstention (Vice Mayor Purdock). Staff said the draft agreement will return to the council with proposed security language and repayment terms.

Next steps: staff will draft the loan and security package, attempt to secure liens and guarantees where feasible, and bring the final agreement back to council for approval.