San Lorenzo Express News
Agreement to Buy Lorenzo Theater Falls Apart
OCTOBER 12, 2001
The owner of the Lorenzo Theater has rescinded an agreement to sell the theater to the Lorenzo Theater Foundation. The owner, Dr. Dharam Salwan, reportedly cancelled the agreement immediately after a public signing with the Foundation September 26.
According to the Foundation, Salwan said he cancelled because he did not have time to review the sale agreement prior to the September 26 press conference. The Foundation and Salwan signed both the sale agreement and a "donation agreement" just prior to the press conference.
The sale agreement states that the Foundation was to buy the theater for $400,000 on condition that the Foundation receive from Salwan a donation of $200,000 before the transfer of ownership.
According to the sale agreement, Salwan would finance the purchase at 8 percent interest. The Foundation was to pay Salwan $101,876 at the closing of the sale. The money would come from Salwan's donation. The initial payment represented $94,000 due the former owners (from whom Salwan had purchased the theater earlier this year) and the first four monthly payments to Salwan. The Foundation was to have paid $1,969 each month for the first two years, representing interest only. After that, the Foundation would have to make payments on both the principal and interest on the loan. The payment plan was designed to pay off Salwan in 15 years.
According to the Foundation's Larry Leal, the signed sale agreement was an accurate reflection of agreements reached with Salwan in face-to-face negotiations and in written summaries of those negotiations faxed to Salwan. Leal stated that Salwan agreed to donate not only $200,000 toward the purchase of the building, but also another $200,000 toward rehabilitation of the building to meet building code requirements.
According to statements in The Daily Review (October 13, Local News), Salwan claims he agreed to donate only $200,000, and that this amount would be used primarily for rehabilitation of the building.
Apparently Salwan still wants to proceed with the sale. He was quoted by the Review as saying, "There is still a standing offer. It should be done." But Leal said the Foundation was not in a financial position to agree to the terms as now interpreted by Salwan and would not have carried on negotiations if it understood Salwan's offer as now stated. In fact, since September 26 the Foundation board voted to reject any donation offer from Salwan that restricted use of the money to rehabilitation of the theater facility.
The two parties negotiated the sales and donation agreement with the assistance of Bob Swanson, an aide to Alameda County Supervisor Nate Miley.