City and County of San Francisco v. Geary Courtyard Associates, a California Limited Partnership, ERP Operating Limited Partnership, an Illinois limited partnership; Equity Residential, a Maryland Real Estate Investment Trust, and Does 1 through 50
Published: Nov. 17, 2012 | Result Date: Sep. 13, 2012 | Filing Date: Jan. 1, 1900 |Case number: CGC-12-520504 Settlement – $95,000
Court
San Francisco Superior
Attorneys
Plaintiff
Dennis J. Herrera
(San Francisco Public Utilities Commission)
James M. Emery
(Office of the San Francisco City Attorney)
Evangeline Grossman
(Evangeline Fisher Grossman Law)
Defendant
Aaron T. Winn
(Duane Morris LLP)
Christopher J. Healey
(Dentons US LLP)
Facts
According to a contract executed in 1988, the City of San Francisco granted the proceeds from a tax exempt bond sale to Geary Courtyard Associates, a developer, so long as 20 percent of the units in Geary's apartment complex at 639 Geary Street were occupied by low-income tenants at affordable rents. In April 2012, after Geary complied with the rent restrictions for approximately 24 years, the underlying bond obligations were paid off in full. With the bond payoff, Geary believed the rent restrictions had terminated. As such, in April 2012, Geary notified low-income tenants in its complex that rents would increase effective July 1, 2012, but limited the rent increase to 15 percent for the first year. Arguing that the rent restrictions survived bond payoff, the City sued Geary, seeking to block the rent increases.
Result
Without admitting liability, Geary agreed to preserve affordable rents for current low-income tenants, subject to a reservation to move the court to vacate or modify the restrictions if warranted based on changed law or facts. Geary also agreed to pay $95,000 in attorney's fees and costs.
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