The City of Redondo Beach has won a legal round against the developer of a failed $400 million waterfront project.
The California Court of Appeal has affirmed a decision by a Los Angeles Superior Court judge to strike two arguments by CenterCal Properties in its breach-of-contract lawsuit against the city, the Torrance Daily Breeze reported.
The El Segundo-based developer sued the city in 2017 after its proposed $400 million overhaul of the waterfront sank.
The Court of Appeals backed Superior Court Judge Teresa Beaudet who said in a January 2021 ruling she wouldn’t let CenterCal argue the city breached its contract by sending a voter-approved ballot measure limiting waterfront development to the California Coastal Commission.
She also wouldn’t let the developer argue Redondo Beach violated its contract by letting City Council members publicly discuss the project before voting on it.
Beaudet ruled those arguments were not likely to prevail in court and threw them out.
Redondo Beach City Attorney Mike Webb said the legal dispute is far from over, even with this important-yet-incremental step.
“This is a long-awaited victory for the city, and really strikes at the core of the
CenterCal lawsuit,” Webb said in a statement. “There is a long way to go before the lawsuit is over, but this makes things much tougher for them.”
A lawyer for the developer downplayed the appellate decision.
“The appeal was limited to one narrow issue,” Betty Shumener, an attorney for CenterCal, told the Daily Breeze.
That issue — whether the city breached its contract by sending Measure C to the Coastal Commission for certification — has very little impact on the case moving forward, she said.
Redondo Beach has long sought to redevelop its aging waterfront, and struck a deal with CenterCal to do the job. The project would have redone Redondo Beach’s pier by building 524,000 square feet of shops, restaurants, a hotel, a market and a movie theater.
But in 2017, Redondo Beach voters passed Measure C, which limits development on the city’s waterfront. The City Council then canceled its lease agreement with CenterCal.
CenterCal responded by suing the city that year, arguing that Redondo Beach’s decision to cancel the lease agreement represented a breach of contract. The developer seeks $15 million in damages.
Since then, both sides have been mired in legal debates over whether specific CenterCal arguments can go to trial, with the city looking to get the case tossed out. The Court of Appeal allowed Redondo Beach to continue an anti-SLAPP motion it brought to the table in 2018 in an attempt to get the lawsuit dismissed.
The city argues the suit’s premise made it a SLAPP complaint, or a “strategic lawsuit against public participation,” a tactic used by wealthy people and companies that seek to silence critics by burdening them with heavy legal costs.
Beaudet had denied the motion at the time, but the appeals court overruled her, saying the council members still have a right to free speech and that anti-SLAPP laws, which allow defendants to strike back at such strategic lawsuits, extend to government entities.
The dispute between Redondo Beach and CenterCal Properties has resulted in leaked emails last month of crude comments by Mayor Bill Brand, who had sponsored Measure C, killed the waterfront project and propelled his mayoral election in the city of 70,000 residents.
— Dana Bartholomew
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