Half Moon Bay grapples with $36.8 million judgment against it

San Francisco Chronicle ^ | 12/18/7 | John Coté

[SmithL]

Half Moon Bay is wrestling with unpleasant options for responding to a court ruling that officials say threatens the "very existence of our city government" - a $36.8 million judgment against the city for turning a proposed housing development site into wetlands.

Under the worst-case scenario, officials say, Half Moon Bay would become the first Bay Area city forced to dissolve, and the coastal town's land would become an unincorporated part of San Mateo County.

Members of the City Council say that's unlikely, and they plan to vote at a public meeting tonight to retain an appellate law firm and a financial consultant to advise them on how to tackle a court judgment that is more than three times Half Moon Bay's $10 million annual budget.

Appealing U.S. District Judge Vaughn Walker's Nov. 28 ruling could be a stretch for the city of 12,300, however. A court might require Half Moon Bay to put up a multimillion-dollar security bond just to fight the decision.

Funding such a bond would mean "significant budget cuts across the board," the City Council said in a joint statement last week. "Everything will be affected - parks, streets, libraries, repairs - every municipal function will face cuts."

Paying the judgment outright appears to be out of the question. The City Council said: "The very existence of our city government is threatened."

The dilemma arose from a long-running dispute over a 24-acre parcel just east of Highway 1 that is flanked by housing developments, spotted with trees and choked by 6-foot-tall weeds.

The property, known as Beachwood, is owned in trust by Palo Alto developer Charles "Chop" Keenan, whose trustee bought it in 1993 for $1 million in a foreclosure sale and planned to build an 83-unit residential subdivision.

[SmithL]

The Beachwood property, the judge ruled, became a wetlands after the city did work in the area.

[SmithL]

follow-up to $36.8 million award for undevelopable land 'devastating to city'

[sionnsar]

"Walker ruled that the city had created the wetlands - and damaged the property - by botching a storm drain project and by allowing dirt to be removed for a nearby housing development. Its wetlands status meant the plot could not be developed under state coastal regulations.
...
Half Moon Bay, like 30 other Bay Area cities, is insured through the Association of Bay Area Governments. That insurance pays up to $20 million for an approved claim. But it doesn't cover the Half Moon Bay case, in which the city was found to have seized private property without paying just compensation."

Just too bad for the city. Let them be a lesson for others.

[Always Right]

Paying the judgment outright appears to be out of the question. The City Council said: "The very existence of our city government is threatened."

I doubt if the City Council is ever too concern when their anti-growth policies threaten the livelihood of its citizens.

[domenad]

In six months we begin construction.....of DELTA CITY!

[massgopguy]

Don’t a bunch of Dean Koontz novels happen here?

[stylin19a]

could they make payments ? a million a year for 37 years ?
( or more years, taking the juice into consideration)
it would be 10% of the budget, which they should be able to absorb by cutting out waste/fraud.

[joebuck]

"A court might require Half Moon Bay to put up a multimillion-dollar security bond just to fight the decision."

And who in their right mind would write a $36 million appeal bond for an entity that probably can't scratch together $5 mill in current assets and is threatening to just disband if they lose on appeal?

[winodog]

hahaha thats funny
Pay for their mistakes, haha
Maybe in a alternate universe.

[Free State Four]

A slow-growth bloc had won a majority on the City Council in 1996

[KarlInOhio]

Has the city considered undoing what it did to make the property a wetland and appealing its wetland designation? It seems like that would be far cheaper than paying for the land they destroyed.

[Dr. Bogus Pachysandra]

Dealing with small-town local governments is such a PITA! My Dad found it much easier, and cheaper, to just bribe them!
I know someone who had a similar problem to this. Her house was on the banks of the Cuyahoga in a small town. So, technically, a wetland. But her side yard was always dry, and that’s where the swingset and sandbox were. The small town re-graded the street, and the water ran into her yard and pooled. She added fill dirt to make it a dry area for her kids again. The city got an injunction against her, and she had to remove the fill. Now, for most of the year, she has a bug infested swamp for a yard!

[HereInTheHeartland]

“She added fill dirt to make it a dry area for her kids again. The city got an injunction against her, and she had to remove the fill. Now, for most of the year, she has a bug infested swamp for a yard!”

Insanity....

[Dr. Bogus Pachysandra]

One of my favorite “bribery” stories. My father was building a development serviced by the City of Cleveland Water Dept. The City wouldn’t respond to request for hookups, until they discovered that my Dad was putting a bottle of Jim Beam at every location where he needed a water connection. From then on, they responded immediately, and did as many as a dozen a day!

[sionnsar]

Ummm... how was the quality of the hookups done later in the day? *\;-)

[longtermmemmory]

Will the city have to post an appeal bond?

I hope the developer begins forclosure proceedings.

Then again there IS a provision for municipal bankrupcies under the new bankrupcy code.

[longtermmemmory]

according to this your friend can sue for an illegal taking.

This is not really new law, this is just evidence that city governments believed they can push people around because they have deeper pockers.

[VeniVidiVici]

The owner of the property was blackmailed into giving the city $1 million dollars for a waste treatment facility, then denied the use of his property.

He also had a hotel that was nearing completion in Half Moon Bay destroyed by arson.

Then the city wants to take his property by declaring them wetlands.

This guy should bankrupt the city just on principle.

[longtermmemmory]

bet the city is reaaaaly going to love that municipal bankrupcy law. The debt is not so easy to evade just by dissolution. Otherwise cities would be dissolving and reforming every time they lost a suit.

[Osage Orange]

The property, known as Beachwood, is owned in trust by Palo Alto developer Charles "Chop" Keenan, whose trustee bought it in 1993 for $1 million in a foreclosure sale and planned to build an 83-unit residential subdivision.

24 ACRES..on PCH for $1 million..!!!!!!!!!!!!!!!!!!!!