In December of last year, Steve Collins, executive director of the Dan and Lillian King Foundation, said the foundation would close escrow “in a couple of days” on a $3 million purchase of the mostly vacant Nader Agha-owned building at 449 Alvarado St. in Monterey.
Agha, a real estate investor who has been chair of the foundation’s board since its inception in 2011, had agreed to donate $1 million toward the purchase.
But the sale never went through, Agha says, and a petition filed July 27 in Monterey County Superior Court by the Community Foundation for Monterey County provides a window as to why. Attorney Chris Campbell, who is representing the CFMC, asks for an accounting of the foundation, and alleges the sale would have constituted “a prohibited transaction of self-dealing.”
The lawsuit also questions the sale price of the building; according to records from the Monterey County Assessor, the property was assessed in 2016 and valued at $1.6 million.
CFMC’s interest in the matter is clear: According to court documents from 2010, which Agha signed, management of the foundation is to be taken over by CFMC once Agha is no longer serving as chair. Doubts that everything is above board has pitted powerful community members against each other in court, and have fueled rumors.
The King Foundation was founded by Agha with assets from the Lillian King Trust. King, who considered Agha a trusted friend, passed away in January 2011, and Agha created the foundation in keeping with her wishes. Its purpose is “to support educational programs and activities related to the United States Constitution and the Bill of Rights,” and the idea behind the Alvarado building purchase was to make it a Constitution-themed learning center/museum for county students.
After news of proposed acquisition was reported in the Weekly last December, CFMC contacted Darrell Moon, a King Foundation attorney. According to CFMC’s lawsuit, Moon professed to be unaware of the sale, but “promised to investigate” and report back; according to the petition, he did not report back. CFMC alleges the King Foundation failed to file forms in connection to its tax-exempt status with the IRS; records show forms for the 2014-15 fiscal year were filed May 10.
“We did not do anything wrong,” Agha says. “We have one of the greatest boards ever.”
James Dawson, an attorney for the King Foundation, says the board was surprised by CMFC’s legal action.
“The members of the board, and certainly Steve Collins, are puzzled by this,” he says.
Agha believes the petition was orchestrated by local PR man David Armanasco, who was CFMC’s board chair from 2007-08. Armanasco did PR for Agha’s proposed desal project in 2010, but later went on to help start a competing project. Agha sued him in 2014 for fraud and breach of contract, and Armanasco countersued; they settled the suit last November. (Collins was also criminally charged for his role in a conflict of interest scandal that sunk the regional desalinaton project about five years ago.)
CFMC President Dan Baldwin says Armanasco has “no role in this whatsoever” in the petition.
“We don’t hope there’s something wrong,” Baldwin adds. “We’re not out to get anybody. We’re just trying to make sure Lillian King’s intent is honored.”
The next scheduled hearing for the case is Nov. 30, and an accounting of the foundation must be filed by Nov. 20.
Editor's Note 11/21/16: Though Agha, as well as Collins, claimed the building never closed escrow, records subsequently obtained from the county assessor indicate the deed was transferred to the King Foundation July 8. According to documents recently obtained by Dawson, that transfer has allegedly been rescinded.