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Takings Lawsuit Settlement Hinges On Legislation

The City of Half Moon Bay has reached a settlement agreement with a developer who won a takings lawsuit against the city. Last December, U.S. District Court Judge Vaughn Walker awarded developer Charles Keenan $36.8 million in damages, plus interest and attorney's fees, because an incomplete city drainage project had transformed an approved 24-acre housing project site into an unbuildable wetland (see CP&DR In Brief, January 2008).

In April, Keenan and the Half Moon Bay City Council signed an agreement permitting Keenan to build 129 houses on the 24 acres and an adjacent 12 acres in exchange for an end to the litigation. However, the settlement requires passage of state legislation because it would permit development on a site that would otherwise be subject to severe environmental restrictions. Assemblyman Gene Mullin (D-South San Francisco) has agreed to carry the legislation, AB 1991. The Assembly Local Government Committee passed the bill on a 5-2 vote on April 30, sending the measure to the Assembly Appropriations Committee for further review.

Environmental groups, including the Sierra Club and the Committee for Green Foothills, have already lined up against the legislation. Plus, state Sen. Leland Yee (D-San Francisco), who originally agreed to sponsor the bill in the Senate, has dropped his support because the bill permits development on more than the original 24-acre site.

Under the settlement, the city must provide all entitlements by June 30, 2009, making passage of legislation this year critical. If the city misses the deadline, it would owe Keenan $18 million.

The full settlement is available on the city's website at: www.half-moon-bay.ca.us/Beachwood_Information/Beachwood_Settlement_040208.pdf.