Border Business Park v. City of San Diego
Published: Feb. 22, 2001 | Result Date: Jan. 2, 2001 | Filing Date: Jan. 1, 1900 |Case number: 692794 Verdict – $94,500,000
Judge
Court
San Diego Superior
Attorneys
Plaintiff
David B. Casselman
(Casselman Law Group)
Vincent J. Bartolotta Jr.
(Thorsnes Bartolotta McGuire LLP)
Defendant
Experts
Plaintiff
Patrick F. Kennedy
(technical)
John R. Mawhinney
(technical)
Defendant
Jay D'Antoni
(technical)
Perry Dealy
(technical)
Randi Rosen
(technical)
Anthony Adamski
(technical)
Facts
According to the plaintiff: On Nov. 10, 1986, the defendant city of San Diego and plaintiff Border Business Park Inc. executed a contract known as development agreement. This agreement pertained to anticipated and
approved development of 312 acres in Otay Mesa, which was known as the "business park." This parcel was
located within a larger parcel of property which was annexed to the city, known as the Otay Mesa Community
Plan area. The contract contained two significant promises. The first promise allegedly gave Border Business Park, Inc. the benefit of then-existing rules and regulations pertaining to the development of its land. The second promise purportedly prohibited the city from treating any other property in the plan area more favorably. These promises were intended to insure that Border would not be placed in an "unfair, disadvantageous or non-competitive situation." Specifically, the city allegedly promised not to enforce any post-agreement changes in the applicable general plan, specific plan, subdivision or building regulations.
The agreement also allegedly promised that the city rules, regulations, ordinances, laws, general plans and
official policies governing development, permitted uses and growth management would be those in force at the
time the agreement was entered into. The agreement specifically contemplated that the subject property would
be developed into a light industrial business park. However, the city then allegedly breached nearly every term of the agreement. In 1988, the city council imposed a residential building moratorium in Otay Mesa in anticipation of a joint U.S./Mexico airport which was prohibited under the agreement. The city released a SANDAG report and there was much publicity over the prospect of the airport. Unfortunately, the proposed runway was essentially through the business park. This blighted the area and eliminated buyers or tenants. It was only in 1993, five years later that the city first allegedly contacted Mexican officials to ask whether they were interested in a "twin port" concept in Otay Mesa. When they finally did ask, Mexico said they had no interest whatsoever in a joint effort on the U.S. side of the border. As a result, in 1993, the city council finally abandoned the Twin Ports concept. During this time, interest in Otay Mesa and the business park allegedly evaporated as potential employers and buyers realized that employees would not be able to live near work and the business park was branded with the uncertainty of
being condemned for Twin Ports. Potential purchasers allegedly would not risk investing in such property. According to plaintiff, the city allegedly breached the development agreement in numerous other ways, including ordering changes in the construction of the roads for and around the park, disbanding the mandatory Otay Mesa Development Council, delaying the processing of permits and imposing fees that did not apply. Additionally, the defendant city allegedly targeted the property for selective parking code enforcement and
diverted traffic for the Otay Mesa border crossing through and around the property, which blocked access to the park. As a result of these alleged breaches, plaintiff Border was damaged and ultimately lost its property to foreclosure. While related entities were able to repurchase some of the property out of foreclosure, forty-two acres were allegedly completely lost. In addition, the value of the property they were able to buy back had allegedly been drastically reduced because
they had been unable to develop it in accordance with the agreement. The city cross-complained against plaintiff Border for breach of a promissory note and for unfair business practices. * * *
Settlement Discussions
The plaintiff demanded $25 million pursuant to C.C.P. Section 998. The defendantÆs C.C.P. Section 998 offer was $1,000, plus forgiveness of the $44,000 promissory note and waiver of costs.
Damages
The plaintiff alleged loss of property due to foreclosure, loss of development potential and loss of use during the inverse condemnation takings. The plaintiff claimed a loss of $116 million.
Other Information
* * * Facts according to the defendant: On Nov. 10, 1986, the defendant City of San Diego and plaintiff Border Business Park Inc. executed a development agreement. This agreement pertained to anticipated and approved development of 312 acres in Otay Mesa, which was known as the "business park." The agreement gave Border Business Park the benefit of then-existing rules and regulations pertaining to the development of its land. The agreement specifically contemplated that the subject property would be developed into a light industrial business park. The city cross-complained against Border Business Park for breach of a promissory note and for unfair business practices.
Deliberation
two days
Poll
12-0
Length
15 days
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