Comments by Steven Hyman

Coastal Commission takes on AB1991

Its interesting that many of the posters are so confident that the City could have won on an appeal.  None of us have all the facts and were not present at the settlement meetings.

I think it would have been the height of irresponsibility and arrogance to pursue that knowing that a loss would cost us $50 million which we don’t have.

You also need to understand that this was probably the best the City was going to get without risking bankruptcy and financial ruin.

I’m glad the City has finally woken up and stopped listening to the same people who would lead them off the cliff.

This settlement is also a repudiation of litigate everything to death philosophy that has permeated this town for too long.  How many more millions of dollars does HMB have to throw down the rat hole on attorney fees?  We have probably wasted $10 million on lawyers over the past few years with no benefit to the taxpayers.

We also would have enjoyed many projects (new school, Boys & Girls Club, water pipe line, etc) that have been stalled for years over weeds.

Its time for HMB to get into the act of doing instead of suing.  I think you will find that there is outrage among the general public about the mess we got ourselves into and will not tolerate more of the same. 

Those days are over.  Its just $18 million too late.

HMB to Sacramento: If you don’t support AB1991, we’ll kill this dog

Ken,

Of course the City Council picked a new law firm.  I don’t think many people were in favor of retaining the old law firm that cost us over $5 million in fees and lost a lawsuit costing us another $41 million.

Appealing a lawsuit is a crap shoot.  Who knows what 3 other federal judges would decide.  They may have thought their buddy was correct.

And while I respect your opinion, you’re no federal judge so you know as little about the outcome as me.

And I have to tell you that it is foolhardy to roll the dice with a $50 million lawsuit on money we don’t have.  At best, and I think that would have been an amazing fantasy outcome, the judgment would have been reduced by half.  With the settlement, it was reduced by almost 60%.

I also think the settlement was actually pretty creative with the chance of changing the law so we don’t have to come up with the money.

Its likely we will never agree.  I think Beachwood was an incredibly expensive fight we never should have had.  There is not one thing special about this flat highway fronting infill tract other than it has some weeds on it.

When I point this property out to all of my clients as part of disclosure and perverted humor, they stare at it in amazement and can’t believe the foolishness of the whole thing.

The large tracts to the north probably also had these wetland weeds on it but they’ve been turned into farm land. 

Unfortunately, I don’t feel that Kodak moment when I drive up HWY 1 passing McDonalds and then the beautiful Stop the Traffic Light Sign to stop and take in the splendor of the weeds.

Maybe we can have some fitting monument placed here in testimony to the over priced piece of dirt we bought.  Of course, this will never be approved by the Planning Commission because it casts some shadow over the weeds thwarting their growth.

HMB to Sacramento: If you don’t support AB1991, we’ll kill this dog

Everybody is entitled to their opinion about the verdict and settlement.  This wasn’t some LA OJ jury trial.  This case was heard by a federal judge wrote wrote a 170 page decision. 

The City after advice from an army of expensive lawyers decided to settle also shows that they agreed with the judge.

To me, the appeal was the high risk avenue with horrible consequences should the City loose.  This was the smart thing to do.

Now we either need to get the law approved, which unfortunately many HMB’ers want to defeat, or find $18 million.

HMB to Sacramento: If you don’t support AB1991, we’ll kill this dog

Appealing the judge’s decision was a high stakes crap shoot.  Maybe the City would have been successful in reducing the size of the judgment or maybe not. 

If the judgment was upheld, the City’s debt would have mushroomed to $50 million.  There isn’t a prayer that the City could raise that amount of money.  The City would have ended up being dissolved.

The settlement was the logical course of action.  The City Council got the amount of money reduced which is the exact same thing that the appeal was trying to accomplish.  It also ended the cloud of uncertainty hanging over the City.  That was critical.

I know the settlement angers some because the judge’s decision is now the law.  That’s what happens when you go to court. Someone wins and someone looses.  Unfortunately, here everybody, maybe except Keenan, looses.

So my question is how are we going to get $18 million?

HMB to Sacramento: If you don’t support AB1991, we’ll kill this dog

Ray,

That’s wishful thinking.  I don’t hear compromise.  I hear the same old thing that got us into this mess.  I guess people don’t learn from their mistakes.

HMB to Sacramento: If you don’t support AB1991, we’ll kill this dog

I wish I could say that there is a pulling together for the greater good.  Frankly, I don’t see it.  Quite the contrary.

I see the battle lines being clearly drawn and we are going to own an overpriced field of stupid weeds for $18 million.

The only good thing that has come out of this sad situation is that people are getting fed up with how the weed lovers are ruining this place.  Of course, its $18 million too late.

HMB to Sacramento: If you don’t support AB1991, we’ll kill this dog

What I find interesting to keep reading is the constant outrage that the City caved in and settled this $41 million judgment.  What I think is lost on people is the fact that the City was not bargaining from a position of strength.

In fact, quite the opposite.  They were staring down the barrel of a judgment that could easily grow to $50 million with interest.  With that as the backdrop, its kind of hard to pull out a winning hand.  And Mr. Keenan had the deep pockets to keep burying the City with crushing legal fees.  And he already proved that his lawyers worked smarter and cheaper the HMB’s.

I think the proposed law is, to say the least, an uphill battle considering the strong opposition.  Unfortunately, I think this will not pass cause which would have been the cheapest option for HMB.

So the big question is, where are we going to find $18 million?  The City will have to liquidate a lot of its real estate holdings.  That’s going to be tough cause raw land has been for years a hard sale.  Nobody wants to deal with permit hell.  They should start that now.

If the tax payers have to approve a bond measure to bail itself out, I think that too will sink like AB 1991.  I don’t know of anybody personally whose willing to stick their hands in their pocket to pay for the way this place has been run for all these years.

The City can trim some of the fat out of their budget.  To me, the biggest waste of money is the staggering amount spent on lawyers - $1.5 million per year.  Think about how much money we blew on this with nothing to show.  And add to that the lawyers fees for Pacific Ridge and N. Wavecrest.

What also angers many people with the City actions is that they settled.  That means the judge’s carefully worded 170 page decision is now case law.  This will hopefully be a wake up call to many other towns throughout the state and even the country that this behavior won’t be tolerated without serious financial consequences.

Of course, this does noting for HMB because I’m not sure where they are going to find $18 million.  Somehow I don’t think the people who are determined to sink the City will be sticking their hands in their pocket to pay for the damage they did.

Coastal Commission votes unanimously to oppose Beachwood settlement bill

I was wondering which one of the Friends of the Coast would be the first to try and kill the bill.  It won’t be long now till the others add their 2 cents.

It still remains to be seen how this will play out in Sacramento.  Its probably too much to think that common sense will prevail.

As a result, HMB may be one of the first towns that can have a $23 million Wetlands Theme Park (which includes the $5 million down payment made to the lawyers).  I envision a Disney type ride going through the towering wetlands with an Al Gore Green Amphitheatre extolling their beauty and contribution to stop global warming. And maybe we can have some of the docents dressed as red frogs to help people spot them better.  After all, they only appear on vacant lots that are about to be built on.

This is truly a very sad situation that hasn’t run its course yet.  Too bad for all of us.

HMB settlement gives Keenan 129 houses on Beachwood and Glencree—and more

Ken,

Not that it matters but I thought it would have been cheaper but probably more complicated to rebuild Cunha on its current site since the School District already owned the land.

I think the argument at that time was the school needed a bigger parcel 25 acres versus 17 or so for the current one.

My point was that so many projects here take sooo long.  The bond measure was approved in the late 1990’s and we just broke ground last year.

HMB settlement gives Keenan 129 houses on Beachwood and Glencree—and more

Ken,

The $5 million was for money paid out to defend the case to the previous attorneys.

HMB settlement gives Keenan 129 houses on Beachwood and Glencree—and more

I think its great when you can stand on principles.  You also have to be able to back it up with your wallet.

Assuming the new law isn’t passed, the City will be paying $23 million ($18 million settlement and $5 million for lawyers) for a piece of dirt that’s actually worth a fraction of that.

And they will almost bankrupt themselves paying off the debt.  There probably won’t be another lawsuit like this again because the City won’t have the resources to wage another battle.  They’ll be forced to fold under the crushing weight of the next legal assault.

Is Beachwood and the beautiful wetlands they have really worth $23 million to the community?  I don’t think so.

HMB settlement gives Keenan 129 houses on Beachwood and Glencree—and more

I try not to play the blame game.  In hind sight, I think poor decisions were made a while ago and we are paying for it now.

What I find most frustrating about our beautiful community (and I truly love it here) is that nothing ever seems to get done.  Beachwood was a 20 year fight and so was Pacific Ridge. North Wavecrest and the new school were a 15 year battle.

North Wavecrest probably angers me the most cause my son was supossed to be the first graduate of the new middle school.  He’s now a junior in college.

Here we seem to fight over everything like water lines to traffic lights to the Burnham Strip.  Years and years of watching nothing happen except the fatening of the lawyers pocket.

And these years of spinning our wheels has also contributed to the revolving door at City Hall. Who wants to work here.  And I feel sorry for the people who try to do a good job as our elected officials.  Low pay and constant abuse.

Beachwood is an unattractive piece of land that probably wasn’t worth the fight and expense.  Easy to say in hindsight. I’m sure its got some sensitive weeds on it but it is still ugly and near McDonalds.

I’ve always been told that you have to carefully pick your battles.  Its also better to compramise than to fight everything to the end.  Its too bad we don’t practice that here.

This city has always been an easy target for developers with deep pockets who can bury it with never ending legal fees.  I would expect their will be less confrontation in the future if for nothing else that the City is tapped out financially. And one more lawsuit will put the last nail in the City’s coffin and coffers.

HMB settlement gives Keenan 129 houses on Beachwood and Glencree—and more

I sense the frustration of many here who whould rather have seen the City Council fight this lawsuit all the way to the Supreme Court, costing HMB $50 million + and spending the next 10 years making lawyers rich.

As someone who deals with negotiations all the time, its interesting to see how things play out.  I could envision at the first meeting the City telling Keenan that we won’t pay you a dime.  And he responded by saying you owe me $40 million now and it will be $50 million in 3 years.  And since the City is paying his legal bills and he had the judgement, he was in the driver’s seat.

How the City ended up giving him more permits than he would have gotten gets back to the City’s assessment of their case.  Maybe Keenhan said I’ll settle for 200 homes and your land and they finally came to this compramise.

Its cheaper for the City to give up permits and get tax revenue than writing a check for $18 million.

I wish people would stop carrying on about this sacred wetlands.  Its an unattractive infill lot on HWY 1 by a McDonalds surrounded by older homes.

This has been an expensive lesson that HMB won’t forget.  After all POST bought N. Wavecrest, which was much larger, for less money.  And since the City will be paying off this debt for decades, they will constantly ber reminded how their limited budget is being wasted paying off frivilous lawsuits instead of improving the services they offer their citizens.

HMB settlement gives Keenan 129 houses on Beachwood and Glencree—and more

Hi Dennis,

I guess we see things a little differently. The judge didn’t cause HMB’s problems, the City did this to themselves.

The City thought enough of the judge’s ruling that they decided to settle the lawsuit rather than appeal it.  That probably makes the judge more right than wrong.

And for your other question.  I’ve lived here now for over 25 years and I’ve seen a lot of changes.  Many new neighborhoods were created during that time.  I would expect that all these neighborhoods would be challenged as wetlands and red frog habitats today.  Alsace Loraine would be fought tooth and nail today, for example.

To me, Beachwood has always looked like the same old unattractive, unkept in-fill lot sandwiched between 2 older neighborhoods and near a McDonalds as when I moved here then.  It doesn’t even look as nice as the 2 farm fields to the north.

Its kind of tragic to see the City loose so much money over such an unimpressive piece of property.  Doesn’t seem worth the fight and money.  Not to mention wasting everyone’s time dragging on this process for the past 20 years and 20 years to come.

HMB settlement gives Keenan 129 houses on Beachwood and Glencree—and more

I know its so easy to blame all our problems on George Bush, Dick Cheeney and Ronald Regan but to be honest you don’t have to look any further than Main Street HMB for the mess we are in.

Dan, I really think you hit the nail on the head with your comment of “Spend money like crazy. Empty the Treasury and transfer the People’s wealth to corporations”.

With the advice of lawyers and anti-growth supporters, that’s exactly what our City Council did. We have foolishly wasted millions of dollars on frivilous lawsuits.  We are broke.  And worst of all, the City now owes only $18 million to an evil DEVELOPER who wanted to ravage a beautiful wetlands full of red-legged frogs to put up million dollar homes.

I know this valuable property is worth saving.  There aren’t many wetlands left anymore near a McDonalds and Starbucks.

But seriously, look at the mess we are in and will be paying for for decades to come.  I’m sure our leaders won’t make this mistake again.  And one reason is that they won’t have the money to waste on lawyers since they will be paying it out on a settlement.

HMB settlement gives Keenan 129 houses on Beachwood and Glencree—and more

In the event that the proposed state law isn’t passed, the City should consider selling some of their assets to minimize the amount of money they will need to borrow.

If the Beachwood parcel includes water connections, they are worth their weight in gold.  Going price for a water connection alone is around $40,000+

It probably wouldn’t be a bad idea to develop a contingency plan in the event the law isn’t passed so these assets can be hold in an orderly manner and get top dollar.

Raw land isn’t the easiest thing to sell these days so the more time one has to market it, the better the price.

HMB settlement gives Keenan 129 houses on Beachwood and Glencree—and more

I know the real estate community has been very concerned with the City’s judgment.  I can’t speak what statements other brokers make but I disclose this problem to every prospective buyer.

Up until last week, I made the letter from the Mayor about this as a disclosure item.  I’ll disclose the new settlement although I may leave out the cartoon.

The good thing about this being resolved, sort of, is that the uncertainty is over.  People can make informed decisions about what’s known.  Having the appeal drag on for years could have potentially impacted the property values during that period.

Its really hard to tell what the full impact would be because this is somewhat unchartered territory.  I think the best you could say or hope for is that it would be neutral.

HMB settlement gives Keenan 129 houses on Beachwood and Glencree—and more

The way I see it is that the City agreed to give Mr. Keenan 129 building permits by a certain date by having a state law passed or pay him a cash settlement of $18 million by a date further in the future.

This settlement was predicated on stopping all litigation. 

I think the options facing HMB were between bad and worse.  At least with this settlement, there will be a few years grace period before they have to start paying for this.

HMB settlement gives Keenan 129 houses on Beachwood and Glencree—and more

The City has to have had an estimate of the likelihood of passing the bill.

And as far as the City dropping the appeal goes, they can’t have a settlement agreement and keep the appeal option open.  Either you settle or you sue.

HMB settlement gives Keenan 129 houses on Beachwood and Glencree—and more

Even before Yee did his John Kerry flip-flop, I had my doubts about this bill flying.  It would be cheaper than borrowing money.  We’ll all just have to wait and see how this plays out.

My guess on the larger number of homes granted was that the City was at fault and had to remedy Mr. Keenan.  Plus with the wetlands on his property, how could he get his 83 homes? 

And for those who feel $18 million is too much, a loss in court would have been closer to $50 million with interest and attorney fees.

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