Michael H. Johnson and Patricia E. Johnson - Page 5

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          The Palmdale Auto Mall v. the Lancaster Auto Mall                           
               Lancaster and the City of Palmdale, California (Palmdale)              
          are located in the Antelope Valley of California, which is 75               
          miles north of Los Angeles.  The cities are only 5 miles apart.             
               During the period in question, Lancaster was engaged in an             
          auto mall development competition with Palmdale.  Prior to                  
          October 1990, Lancaster had invested approximately $10 million              
          into the development of an auto mall.  Previously, Lancaster lost           
          a competition for a regional shopping center to Palmdale.                   
               Lancaster felt that it needed a domestic auto dealer as an             
          anchor in its auto mall, and it wanted Mr. Johnson's motor                  
          vehicle dealerships to relocate to the Lancaster Auto Mall.                 
               On February 14, 1989, Mr. Johnson signed a Disposition and             
          Development Agreement (DDA) concerning a planned relocation to              
          the Palmdale Auto Mall located in Palmdale.3                                
               On July 19, 1989, the LRA made a proposal to Mr. Johnson               
          concerning relocating his motor vehicle dealerships to the                  
          Lancaster Auto Mall.  In a letter dated July 26, 1989, Mr.                  
          Johnson declined this offer and indicated he was going to move              
          his motor vehicle dealerships to the Palmdale Auto Mall.                    



               3  It is unclear from the record whether Mr. Johnson would             
          be relocating his Ford dealership, his Lincoln-Mercury                      
          dealership, or both dealerships; however, it is clear that Mr.              
          Johnson thought he would be moving both motor vehicle                       
          dealerships.                                                                




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