Huge Project Labor Agreement cancelled

$1.5 billion union-only deal scuttled

Las Lomas Land Co., LLC, filed a lawsuit Monday demanding the city of Los Angeles pay damages in excess of $100 million for the City Council's March 19 decision to strike down a housing development that would have brought 5,553 residential units to the steep hillsides near the Newhall Pass.

The lawsuit, filed in Los Angeles Superior Court, also has an order compelling the city to complete its environmental review of the project that the company says the city terminated prematurely.

"Las Lomas followed the city of Los Angeles' rules for over six years to annex 555 acres of land into the city, and to create a community that would privately finance affordable housing, new water and transit infrastructure, new public open space and thousands of high-paying jobs that this city so desperately needs," Carlyle W. Hall, Jr., attorney for Las Lomas Land Co. said in a statement.

The project's boundaries sat in an unincorporated area of the county, between the city limits of Los Angeles and Santa Clarita. Las Lomas sought annexation into the city of Los Angeles.

The Los Angeles City Council voted 10-5 in March to stop processing all paperwork on the plans. At that March council meeting, Los Angeles City Councilman Greig Smith had pushed to kill the project, saying it was "a flawed project."

But Los Angeles city planning staff had billed Palmer Investments for about $30,000 worth of clerical work done since 2002, which included processing the paperwork necessary to move Las Lomas forward. Las Lomas had also signed a $1.5 billion Project Labor Agreement for future workers, according to Hall.

Councilman Richard Alarcon had argued that the city of Los Angeles would expose itself to a "million dollar" lawsuit by terminating the project after Palmer had invested the time and money to make it happen.

A city lawyer consulted during that March meeting told the council that Palmer can sue for damages and can also file a lawsuit asking a judge "to compel the city to process the project and complete the process."

Smith said, however, that the council members have the final say, not the developer. He said the city had "done nothing to obligate the city to continue with this project."

Following the decision, Los Lomas developer Dan S. Palmer said he would look into all of his options. When asked if one of those options involved suing the city of Los Angeles, Palmer declined to comment.

"My client - and numerous community, business and labor groups - sought a fair and open environmental review process for the proposed Las Lomas community," Hall said in Monday's statement. "But, as the complaint alleges, for arbitrary, discriminatory and illegitimate reasons, the council violated the law and did not allow this fair review to take place, despite numerous warnings by its own City Attorney that the city could be liable for ‘substantial damages.' This lawsuit is being filed today to hold the city to account for these unfortunate actions."

Bart Reed, executive director of the Transit Coalition in the San Fernando Valley and the Stop Las Lomas group, said Monday, "It's the type of project that didn't belong to the city of Los Angeles. It had artificial life support for six years."

He called the lawsuit "a sad use of the judicial process" and said it is one which will be "thrown out with lack of merits."


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