Michael H. Johnson and Patricia E. Johnson - Page 6

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               On August 18, 1989, Palmdale signed the DDA regarding Mr.              
          Johnson's move to the Palmdale Auto Mall.                                   
               After learning of Mr. Johnson's agreement with Palmdale but            
          before Mr. Johnson terminated his agreement with Palmdale, Mr.              
          McEwen advised the LCC and the LRA staff to refrain from any                
          negotiations with Mr. Johnson concerning the 23d Street property            
          while Mr. Johnson was under agreement with Palmdale.                        
               While under contract with Palmdale, Mr. Johnson tried to               
          negotiate with Lancaster to move his motor vehicle dealerships to           
          the Lancaster Auto Mall.  Between April 1990 and September 1990,            
          he sent several letters to Lancaster city officials in an effort            
          to communicate the terms of his offers.  The LCC, however, was              
          unwilling to negotiate with Mr. Johnson during this time.  A                
          letter dated June 22, 1990, specifically mentioned Lancaster's              
          unwillingness to negotiate with Mr. Johnson.  During this period,           
          Lancaster rejected Mr. Johnson's proposals.                                 
               In early 1990, Mr. Johnson's negotiations concerning                   
          relocating his motor vehicle dealerships to the Palmdale Auto               
          Mall began to deteriorate.  This was due in part to the fact that           
          William Royster (Mr. Royster), the developer of the Palmdale Auto           
          Mall who was negotiating with Mr. Johnson on behalf of Palmdale,            
          made representations that were not the position of Palmdale and             
          to which Palmdale was unwilling to commit.                                  







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