HMB receives $5 million insurance settlement

Posted by on Sat, June 14, 2008

The city of Half Moon Bay has received $5 million from the Association of Bay Area Governments insurance pool.

Although the city says at least six times in the three-paragraph release that the money will go toward its litigation expenses, this is $5 million that the city did not have before.

Since the city has already budgeted and spent the money for past litigation, this $5 million could be applied to the $18 million settlement with developer Charles "Chop" Keenan, significantly reducing the amount they would have to borrow.

Here’s the release:

Half Moon Bay Mayor and ABAG Announce Settlement of Beachwood Litigation Insurance Claim

Payment will Reimburse City for 10 Years of Litigation Expenses

HALF MOON BAY, Calif.—(BUSINESS WIRE)—Half Moon Bay Mayor Bonnie McClung and the risk sharing pool to which the City belongs, the Association of Bay Area Governments Pooled Liability Assurance Network (ABAG PLAN), announced today that they had reached an agreement under which ABAG PLAN would pay the City $5 million to reimburse it for expenses incurred during 10 years of litigation over the Beachwood property. The City expects that the $5 million will fund most of the litigation costs that it has already incurred or anticipated.

"We appreciate the decision by ABAG PLAN to pay the City the entire $5 million under our coverage, which covers the incurred and anticipated litigation costs related to Beachwood. This money will be used to reimburse the City for the almost $5 million in total legal and administrative costs of the litigation over a period of more than 10 years, but will not reach the $18 million that will be owed should AB 1991 fail," said Mayor McClung. The $5 million is the entire coverage available from ABAG PLAN.

AB 1991 passed the California Assembly 46-18 on May 28th and will be heard by the California Senate Local Government Committee on June 18th.

Great news. The City of Half Moon Bay now has $5 million in free cash. On top of that, voters just approved an increase in the tourist hotel tax that will bring in an additional $670,000 per year for the City.

All of this extra cash will allow the City to pay off the $18 million sum owed to Beachwood developer Charles Keenan, without the need for “special rescue bill” AB 1991, as Lanny Davis describes it.

Actually, AB 1991 is a “special sell-out bill.” But in any case, the Old Guard City Council members can no longer claim that AB 1991 is needed to avoid a financial disaster.

Hopefully, the Old Guard Council members won’t squander this windfall by excessively raising police salaries and benefits, like they have in the past, or else Half Moon Bay will end up like Vallejo.

A better solution would be to have AB 1991 passed and then maybe the City could actually spend this money on something useful for the residents.  And I don’t mean more lawyers.

We can always dream.

Steve, you read it first here. If AB 1991 passes, it will be held up in the courts long after the deadline agreed upon by the HMB City Council majority and Keenan—and long after the $5 million insurance settlement has been spent.

The best thing the city can do is end this thing as quickly as possible: get rid of the high-priced spin (i.e., get Lanny Davis and company off the hourly payroll), apologize to the Coastal Commission and every other agency the city and/or its spinmeister has insulted, and start mending fences within the city and all over the state with the goal of overturning the bizarre Federal Court decision by Judge Walker.


I can see a scenario if AB 1991 passes,  it will be challenged in courts until the clock run out and then the City has to write the $18 million check.

That would be par for the course in doing business in HMB.  Very sad.  Its also starting to anger people with this fight everything mentality.

We want things done now, not blow millions on lawyers as project costs skyrocket.  Look we can’t even replace a old waterline without fighting for years.  What a joke.

I still believe that there is more local support for AB 1991,  especially when you look at what we we are loosing, a weed filled lot by McDonads and our sewer plant.  I have pointed out this site to clients for over six months now,  and almost all of them stare at it in total disbelief.  Most of the comments are not fit for writing here.  What a joke sums it up politely.

And the choice between the bill and writing a check,  again most are in favor of getting out of this mess as cheaply as possible.  Common sense prevails,  even if some cactus cooperative is unhappy. That’s too bad but they’ll get over it.

And as far as Lanny Davis goes,  that was a stroke of genius.  He has shown how effective a savvy political lobbyist can be.  He knows how to work the corridors of power as is evident by the success we’ve seen with this bill so far.  And I’m still hoping to see Bill and Hillary here to.  Maybe we can get a great photo of Bill standing in front of Beachwood eating a Big Mac and fries.  Its the food that transcends party lines.

Steven Hyman,

I don’t hear a sell out of the environment as popular! I hear of recalling some of the City Council Majority. But I usually talk to intelligent people.  But most important:

YOU wrote:

“Its getting so hard knowing who to believe these days.  There’s the Truth Squad, liars of the Coastal Commission and our own home grown Chicken Little crowd.”

Seems to be a clear statement of YOUR opinion!

Jonathan Lundell wrote: “Come on, Steve, show a little personal initiative and name one specific “lie”.”

I, Barry, Jonathan, Scott Boyd, Francis Drouillard, and Jimmy Benjamin have all been waiting on YOU!

Ken Johnson