Letter to Santa Cruz from Ron Lau

							                                         MALDONADO           &      MARKHAM,           LLP
                                              A1TORNEYS    AND COUNSELORS        AT 'LAW

WILLIAM A. MARKHAM*                             402 WEST BROADWAY, SUITE 2050                            MEXICO OFFICE:
DIRECT: (619) 221-4418                               SAN   DIEGO,     CA 92101               GUADALUPE VICTORIA 2306-201, ZONA RIO
E-MAIL: wm@maldonadomarkham.com.                                                             TIJUANA, BAJA CALIFORNIA, 22010, MEXICO
                                                      (619) 221-4400 (TEL.)
                                                      (619) 224-3974 (FAX)                           +52 (664) 200-2392 (TEL.)

                                                                 ..
ANTONIO MALDONAOO+
DIRECT: (619) 819-5166                            v.fww.maldonadomarkham.com                         +52 (664) 200-2536 (FAX)
E-MAIL: am@maldonadomarkham.com


       Executive Director
       REDEVELOPMENT AGENCY OF THE CITY OF SANTA CRUZ
       337 Locust Street
       Santa Cruz, CA 95060

       ATCHISON, BARISONE, CONDOTTI & KOVACEVICH
       333 Church Street
       Santa Cruz, CA 95060

                         BY ELECTRONIC TRANSMITTAL, FAX AND REGULAR MAIL

                                                          May 31,2012

                                   Re:   1547 Pacific Avenue, Santa Cruz, CA


       Dear Gentlemen:

              I represent Ronald Lau" Eric Lau, and Lani Lau. Ron Lau formerly held title in fee simple
      to the parcel ofreal'property located at 1547 Pacific Avenue, Santa Cruz, California 95060 (the '
      "Condemned Property"), and he rented part ofthe Lau Property to Eric Lau and Lani Lau.

               In 2005, the City of Santa Cruz (the Redevelopment Agency ofthe City of Santa Cruz)
      condemnedJhe Property in order to allow a developer (Bolton Hill Company, Inc.) to acquire and
      develop it in accordance with an elaborate redevelopment plan. The City of Santa Cruz
      accordingly prosecuted a condemnation against my clients that quickly led to a settlement under
      which my clients received (1) a cash payment and (2) binding assurance that the acquiring
      developer or its successor would either develop two condominiums on the properties for my
      clients or, failing this, pay them liquidated damages inthe amount of$700,000.

              ,It appears, however, that the City of Santa Cruz took my clients' property under its power
      of eminent domain in order to deliver it to a private property developer whose controlling
      decision-makers later decided that after all they did not wish to develop the property at all, and so
      they allowed their lender to take the property by foreclosure. My clients so far have never
      received either the promised cOndominium units or the liquidated damages, even though these
      items were material inducements to their agreement to settle the City of Santa Cruz's
      condemnation proceedings against their property.




                                         * ADMiTTED IN CALIFORNIA AND WASHINGTON, D.C.
                                         tADMITTED  IN MEXICO, CALIFORNIA AND NEW YORK
Redevelopment Agency of the City of Santa Cruz
Atchison, Barisone, Condotti & Kovacevich
Page 2
May 31,2012



        The obligation to build the units or pay the liquidated damages is set forth as a covenant
that runs with the land that is recorded as an equitable servitude against title to the Property. The
latest possible date on which the liquidated damages can be timely paid is October 25,2012.

         It is now possible that the foreclosing lender will take the position that at the trustee sale it
acquired title free and clear of this equitable servitude. Ifit does so, and if you decline to afford
my clients their promised consideration, I will be obliged to re-open the condemnation
proceedings, over which the Superior Court has preserved ongoing jurisdiction under Section
664.6 ofthe Code of Civil Procedure. If! re-open the proceedings, I will seek a rescission of my
clients' agreement to the settlement -and a reconveyance to them of their title to the Property.
                                                 "\

       Ifhowever you will confirm that you will honor the equitable servitude by providing the
promised units or paying the $700,000 to them no later than October 25,2012; then there will be
no need for me to seek any further redress.

         I would greatly appreciate your prompt response to this demand. Thank you.


                                                      Yours sincerely,

                                                        M~,....--
                                                      William A. Markham

WAM/la




cc:      Mr. Ronald Lau
         Mr. Eric Lau
         Don Hubbard, Esq.