Jacobus Reintroduces Agenda Item Requesting Collection of Earnest Money

FREMONT – City Councilwoman Susan Jacobus is reintroducing an agenda item this week, requesting that the City Attorney commence legal collection actions against one longtime Fremont company who she feels did not hold up their end of a city contract.

In March 2018, RTG Medical expressed an intent to purchase a lot of land from the City of Fremont at Nelson Business Park. The purchase was approved by the city council through ordinance 2018-5435, and RTG was given 120 days to complete the purchase. As part of this agreement, RTG was to pay $19,660 in “earnest money,” which is generally known as a deposit on the purchase of land that indicates a purchaser’s serious intent to buy.

The purchase was not completed within that 120 days, and in July another ordinance was passed by the city council, giving RTG another 120 days to complete that purchase. Within this period of time, RTG investigated alternate sites for their soon-to-be-built 15 million dollar headquarters – sites both within Fremont and outside of it. Eventually, RTG decided that the Nelson Business Park property was not suitable for their needs.

After the decision not to complete the Nelson Business Park lot purchase, the contract did stipulate that all earnest money paid into escrow would be forfeit from RTG to the City of Fremont. No earnest money had yet been paid into escrow, and Mayor Getzschman sat down to negotiate with RTG Medical in hopes of recovering the City’s costs of about $7,800. During these negotiations, RTG Medical expressed a desire to potentially build their new headquarters at another Fremont development: Gallery 23 East.

After negotiations, RTG Medical agreed to pay the City $10,000 – more than covering Fremont’s costs in the terminated contract. However, the recommendation by councilwoman Jacobus states that the City’s costs of $7,800 plus the $19,660 in unpaid earnest money should have been paid in full. Jacobus alleges that the Mayor does not have the authority to make the concessions that were made, and she asks that the city attorney be directed to commence legal action against RTG Medical for the unpaid earnest money.

Cities often make special concessions to large employers or valuable companies in order to make their city a more competitive option. On the national stage, multiple large cities recently competed for the new Amazon headquarters, offering billions of dollars in tax concessions and other incentives.

While the dollar value (about $17,000) of this issue is no where near that level, Mayor Getzschman expressed a desire to keep RTG Medical, and the associated jobs, in Fremont. “We’ve worked extremely hard in keeping RTG Medical, which is a great partner in our community. In the last two or three years, they’ve donated over $100,000 to Fremont agencies, like Habitat for Humanity.” RTG is also one of the top-rated places to work on Glassdoor and Indeed.

Should the new RTG headquarters be built at Gallery 23 East, the company will be adding 20-30 more jobs, according to the mayor, bringing the total of employees at RTG to about 110 people. The average salary at RTG Medical is reportedly around $60,000/year, making this one of the Fremont area’s best paying white collar jobs.

The city council is expected to discuss this agenda item tonight, Thursday 12/20/18. It is the final item on the agenda.

Hear Mayor Getzschman’s comments on our podcast page. 

Read the full report and proposed resolution from Susan Jacobus.

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