The City of Santa Monica and the Santa Monica Coalition for a Livable City have settled a legal battle relating to the formerly proposed Plaza at Santa Monica project.

“This litigation relates to SMCLC’s claims that the city’s decision in July 2020 to proceed with negotiations with the developers of a proposed project located at Fourth and Fifth and Arizona in Santa Monica violated the surplus Lands Act,” Interim City Attorney George Cardona recently said after a closed session on the matter. The city does not admit the allegations and does not agree with the merits of SMCLC’s claims, which were rendered moot by the council’s December 2020 decision to terminate negotiations with the developers. And while SMCLC has dismissed its complaint, it has filed a motion seeking attorney’s fees.

“The city does not admit the allegations or agree with the merits of SMCLC’s motion for attorney’s fees.,” Cardona added. But to avoid the expense and burden of further litigation, councilmembers agreed to a settlement amount of $115,000 after a 6-1 vote. Oscar de la Torre was the sole no-vote.

The battle between the two was initiated more than a year ago when Coalition members tried to convince city leaders that they had to follow the Surplus Land Act before it could sell public land to a private developer. The future of the controversial downtown development project, billed as The Plaza at Santa Monica, has since been up in the air.

Interim City Manager Lane Dilg recommended temporarily halting negotiations between staff and Clarett West Development, LLC and DLJ Real Estate Capital Partners, LLC, in February 2020 while the city researched if the development would be in violation of any state laws. Later that summer, negotiations on the project at 4th and Arizona resumed after council directed staff to adjust priorities in the negotiations of the 2.57-acre property to better reflect the input that was received from the public.

Not long after listening to dozens of public comments from residents living in and beyond the Westside, Councilmember Sue Himmelrich moved to close negotiations with the developer entirely.

“I think it’s illegal. I think that it poses great risk to the city. And I think competition can only make this project better if we go to an RFP,” which would ensure more affordable units in the space as well as a hotel and open space, Himmelrich said, shortly before the motion was unable to garner a second.

“It’s unfortunate that the City wouldn’t listen to us, to our lawyers or to the public, compelling residents to ask a court to step in so the City wouldn’t violate the law by continuing to negotiate a development agreement for this wildly unpopular project,” a letter from SMCLC states. “As a result, the City will have to pay legal fees over $100,000 to SMCLC’s lawyers to settle this important lawsuit in the public interest.”

Organization leaders clarified no money was sought by SMCLC and the entire settlement constitutes reasonable attorneys’ fees and costs incurred in the lawsuit.

“We thank Councilmembers Phil Brock, Oscar de la Torre and Christine Parra for their steadfast actions to stop the Plaza and for enabling a fair settlement. And thank you to Mayor Himmelrich, who, in July of last year, was the sole councilmember to vote against continuing negotiations with the Plaza’s developer on the basis that it was illegal to proceed without complying with the Surplus Land Act. This current council majority stood with residents — as they told us they would — to do what is right,”SMCLC added. “Lastly, we are very grateful for the strong public support we received from neighborhood associations and the many individuals who enabled us to bring this important lawsuit. Neighborhood associations, largely underfunded, do vital community work for residents and the city as a whole. This settlement will enable us to reach out to these groups, as well as individual donors, to ask whether they want their donation returned, or for those funds to be used by SMCLC for future campaigns as we continue to fight for residents to have a seat at the table when important decisions are made by our City.”