Why Hanford is relieved to pay $12 million settlement to ag business over lawsuit
The city of Hanford has agreed to pay $12.5 million to settle ongoing litigation with agri-business Helena Agri-Enterprises.
The settlement, which was approved by the city council during a special meeting Tuesday night, fully resolves the almost 10-year long legal dispute involving the company’s property on Lacey Boulevard.
According to a statement from the city, Hanford will pay $7.5 million in the next 30 days, with the remaining $5 million paid out over the next four years.
That number could have been much higher.
The company’s lawsuit, filed in 2017, sought damages in excess of $50 million.
“The fact that this lawsuit has been pending for so long has had an impact on the city’s ability to budget for future services for many years now,” Hanford Mayor Travis Paden said in a news release.
“Although unfortunate, it’s a relief to bring closure to his matter.”
At the heart of the case was a Memorandum of Understanding from 2014, and a land deal that would have exchanged the company’s fertilizer facility (which it has been operating since 2011) for land in the city-owned Kings Industrial Park near Houston and 11th avenues.
That deal fell ultimately through and the company alleged the city violated a contractual agreement.
The company also alleged the city was trying to remove them from, and restrict any expansion at the Lacy Boulevard facility at the behest of a Fresno-based developer who was building a nearby mixed-use center, including a Costco.
A trial was set to begin Feb. 6.
The settlement deal was reached in mediation last week.
According to a staff report submitted at the council meeting, the payments will come from the general fund, which currently has $5.5 million in reserve. The city would need to borrow from other funds “to maintain payments in accordance with the agreement.” That loan could “impact the City’s ability to fund major projects while,” until it is paid, according to the staff report.
Paden said the settlement would not disrupt things such as police and fire services within the city.
“It’s important for the public to know that this settlement will not impact the city’s ability to continue to provide essential services to our residents.”
A message to Helena was not immediately returned Wednesday afternoon.