HMB loses $36 million judgement


By on Thu, November 29, 2007

Plaintiffs were awarded more than $36 million in damages today in the case of Joyce Yamagiwa v. The City of Half Moon Bay and the Coastside County Water District, according to city attorney Adam Lindgren.

You can download the complete judgement from Coastsider.

There was a special closed session of the city council Thursday night at 5pm for the city council to consider its options and next steps. The city has one month to decide what to do next. Council member Jim Grady was out of town for the meeting and it was implied that no decisions would be made Thursday. The next schedule city council meeting will be Tuesday. We will have video of the public comment portion of Thursday’s meeting shortly.

The County Times has a very good summary of the case, with quotes from the winning side. For example:  "Keenan said he is open to discussing "creative" means of payment to ease the burden on the city. He said he would consider accepting the development rights for some other property in lieu of payment of some or all of the huge judgment."

UPDATE: Darin Boville has video of the public comment portion of Thursday night’s meeting over at Montara Fog. Darin says the mood of the city council and audience was somber.

Click below for a copy of the city’s press release outlining the history of the lawsuit from the city’s perspective.

City of Half Moon Bay
501 Main Street
Half Moon Bay, CA 94019

November 29, 2007: For Immediate Release

On November 28, 2007, Judge Walker of the Federal District Court for the Northern District of California ruled that the City of Half Moon Bay is liable for damages to plaintiff Joyce Yamagiwa’s (trustee) property caused by the growth of wetlands on the Property.  Judge Walker found for Yamagiwa on all grounds and awarded Yamagiwa $36,795,000 in damages and further ordered that Yamagiwa would no longer be required to pay property assessments into the Sanitary Sewer Assessment District. 

This decision is the latest entry in a long history in which Plaintiff Joyce Yamagiwa ("Yamagiwa") and several former owners attempted to develop a 24-acre property known as the Beachwood Subdivision (the "Property") boarded by Terrace Avenue to the south, Highway 1 to the west, Grandview Terrace to the north and Pacific Ridge development to the east.

The City was initially, and for many years, supportive of the proposed development of the Property.

The City approved a tentative map for residential development in 1976.  In 1984, at the request of the owner of the Property at that time, the City also formed the Terrace Avenue Assessment District ("TAAD") to finance and construct storm drain improvements on the Property.  The purpose of the TAAD improvements was to support future development and alleviate significant flooding problems in the area.

In 1990, after the first tentative map expired, the City approved a vesting tentative map for residential development on the Property.

In California’s coastal cities, land use and development projects are required to comply with both local city laws and the State Coastal Act.  The entire City of Half Moon Bay is located in the Coastal Zone and subject to the requirements of the Coastal Act.  Under the Coastal Act, no property owner can develop property in the Coastal Zone until it obtains a discretionary Coastal Development Permit ("CDP"), regardless of whatever preliminary approvals it has received from a city.  Until 1996, the primary authority to issue CDPs was held by the California Coastal Commission.  In 1996, the City’s Local Coastal Program was approved, and the City became responsible for issuing CDPs, with the Coastal Commission often considering appeals of the City’s decisions to issue CDPs. 

The Beachwood project had a City-issued vesting tentative map, but it needed to get a Coastal Development Permit to be able to obtain a final subdivision map and build the project. 

Yamagiwa entered the story in 1993, when, acting as trustee for the Keenan family trust, she purchased the Property.  Yamagiwa bought the entire 24-acres in a foreclosure sale for only $1 million dollars. 

In 1993, the City was under a development moratorium due to the lack of available sewer capacity.

After that moratorium was lifted, in 1998, Yamagiwa applied to the City for new approval to construct an 83-unit residential subdivision.  By then, however, when the City was considering the application for the CDP, two important things had changed.  First, as noted before, the City was now responsible for considering development proposals under the requirements in the Coastal Act.  Second, and of importance to Yamagiwa’s development proposal, a new case, Bolsa Chica Land Trust v. Superior Court, 71 Cal.App.4th 493 (1999) ("Bolsa Chica"), held for the first time that the Coastal Act does not allow residential development of protected wetlands in the Coastal Zone.  Before Bolsa Chica, the Coastal Commission and others had interpreted the Coastal Act to allow residential development of protected wetlands with appropriate mitigation.  The Coastal Commission’s interpretation before Bolsa Chica was similar to the way mitigation standards are applied by other agencies to wetlands outside of the Coastal Zone. After Bolsa Chica the Coastal Commission has not allowed residential development of wetlands protected by the Coastal Act under any circumstances.  The Coastal Commission now absolutely prohibits residential development of wetlands in the Coastal Zone.  During the processing of the CDP, the City’s wetland consultants determined that wetlands existed on the property, under the applicable legal standards in the City’s LCP.  As a result, on May 2, 2000, the City Council denied the CDP because there were wetlands on the Property.

In response, Yamagiwa filed two lawsuits.  The first lawsuit filed in State Court in 2000 challenged the City’s denial of the CDP, and argued that the City had misinterpreted the City’s own LCP definition of wetlands in finding wetlands on the Property.  Initially, Yamagiwa was successful in convincing the trial court that there were not wetlands on the Property and the trial court ordered the City to issue Yamagiwa a CDP, which the City did, subject to the outcome of an appeal of the trial courts decision.  Before the appeal of the trial court’s decision could be heard, however, the Coastal Commission considered an administrative appeal of the City’s decision to issue the CDP as ordered by the trial court.  The Coastal Commission decided to overturn the CDP.  Yamagiwa appealed the Coastal Commission’s decision directly to the State Appeals Court, who ruled that the Coastal Commission did not have the authority to overturn a CDP issued because of a court order.  Finally, after nearly five years of litigation, the State Appeals Court considered the original issue in this first lawsuit of whether the City had appropriately determined that protected wetlands existed on the Property, and, agreeing with the City that such wetlands did exist, upheld the City’s decision to deny the CDP.

The second lawsuit against the City was also originally filed in State Court in 2000.  In this suit, Yamagiwa claimed that if there were protected wetlands on the Property, the wetlands were created by the City’s actions in constructing the TAAD storm drain improvements on the Property.  The second lawsuit sought damages under State and Federal law from the City resulting from the formation of the wetlands.  Specifically, Yamagiwa wanted the City to compensate her, as trustee for the Keenan family trust, for the difference in the value of the Property with Yamagiwa’s proposed subdivision and the value of the Property without.  This second lawsuit was held back pending the resolution of the first.  The issue of damages for forming the wetlands could not be decided until the first lawsuit decided whether or not there were wetlands.  This second suit was reactivated with the conclusion of the first lawsuit in 2005 that determined that, yes, there were protected wetlands on the property that required the City to deny the CDP.  The City moved the second case from State Court to Federal Court on the basis that Yamagiwa’s claims at that time included issues that were within the jurisdiction of Federal rather than State courts.  The November 28 decision was a decision by the Federal Court on Yamagiwa’s second lawsuit.

This is a court decision on actions taken by previous city councils.  It has cost Half Moon Bay 5 million dollars over the past 15 years.  The City Council now must make a policy decision on how to proceed.  The Council will receive its initial briefing on this complex decision at a Special City Council meeting on November 29 at 5:00 p.m. at City Hall, 501 Main Street Half Moon Bay.  The Council has until December 28 to decide if they want to appeal this decision to the 9th Circuit Court of Appeals.

If you have questions about this press release, please contact the City Manager Marcia Raines at 650.726.8793.