A against Monrovia threaten the city's plans to develop a massive transit village adjacent to the coming Gold Line Foothill Extension.
Samuelson & Fetter, one of the city's largest real estate developers, alleges that Monrovia violated a 2006 agreement that gave the firm the rights to commercially develop the on land near the future Monrovia Gold Line station.
The deal was amended when the city and the Gold Line Contstruction Authority agreed to on some of the property slated for development by Samuelson & Fetter, according to lawsuit documents. But the developer alleges that the GLCA plans to put a parking structure on the land that would interfere with its commercial development plans.
"The City and the Agency knew or should have known all along that Metro Gold Line had no intention of placing its parking structure in the location shown on the aforementioned approved Plan, and that the City and the Agency intended to place the parking structure in a way that would have significant negative impacts on the S&F Entities' approved development," the complaint asserts.
Samuelson & Fetter is requesting $3 million in damages, $33.2 million in lost entitlement value and $70.4 million in lost profits, suing the city for a total of more than $106 million.
Monrovia officials issued a joint statement Wednesday night expressing shock over the lawsuit, and City Manager Laurie Lile wrote that the suit "threatens to unravel the fabric of the community..."
"Samuelson & Fetter was made aware of these circumstances and has been at the table the whole time," Lile said in the statement. "We have been working with them diligently to settle our disagreements and lay out a land plan that acknowledges the requirements of the Gold Line, while providing a lot that would be suitable for development. We were surprised that they filed suit at this time, when our discussions seemed to be progressing in a positive direction. This lawsuit, however, threatens to unravel the fabric of the community in search of an unrealistic profit on the backs of our residents."
Samuelson & Fetter alleges that the city agreed to work with the GLCA to build its parking structure so that it would not adversely affect the firm's ability to develop its own adjacent land. The developer says it agreed to proceed based on the city's "false" representations that the parking lots would not interfere with its plans.
"When the City...made these representations, they knew them to be false and made these representations with the intent to deceive and defraud Plaintiffs and induce them to act in reliance on these representations...," the complaint states.
In a news release, Monrovia officials allege that Samuelson & Fetter in fact violated the development agreement by failing to procure land needed for the the transit development. The city sent the developer a notice of default earlier this year, it said.
"After numerous failed attempts to urge Samuelson & Fetter to perform under the agreement, in February 2012, Samuelson & Fetter was sent a Notice of Default by the former Agency because, among other reasons, the company failed to close escrow on and purchase the Agency’s land by 2011, as set forth in the agreement," the release states.
Whatever the outcome of the lawsuit, the future of the Station Square Transit Village appears to be in serious jeopardy. In its news release, the city identified several factors that have affected "the constructability of the project."
- Years of adverse economic conditions have softened the real estate market and have made construction financing difficult to obtain
- In 2011, the State barred Redevelopment Agencies from making any amendments to outstanding development agreements
- The Monrovia Redevelopment Agency was , along with all other Redevelopment Agencies in the state, by an act of the California Legislature
- Site selection of a Maintenance and Operations facility to serve the Gold Line shifted to the location in Monrovia when other locations became unavailable
- Property south of the railroad tracks could not be acquired to provide a location for construction of a public parking structure to service the Monrovia Gold Line commuters, shifting the obligation to provide parking on Agency-owned land.