US: A Superior Court judge has denied the City of West Hollywood’s request to dismiss several parts of a lawsuit brought against it by the owner of AKA West Hollywood.
The decision issued by Judge Monica Bachner is the second setback to the city in its legal battle with the building owner BPREP 8500 Sunset LLC – a company controlled by AKA parent company Korman Communities and Brookfield Property Group – which it claims is violating city law by renting apartments in the buildings for terms of less than one year.
BPREP 8500 Sunset LLC says it could lose as much as $40 million in damages because the city has barred it from such short-term rentals.
On May 17, Judge Bachner denied the city’s request for a preliminary injunction in a lawsuit that it has brought against the building owner. That injunction would have stopped the short-term rentals until the final resolution of the lawsuit that the city filed in December 2018.
The lawsuits stem from the City Council’s affirmation in September 2018 of community development director John Keho’s ruling that BPREP 8500 LLC was violating city law by offering luxury serviced residences for periods as short as 31 days. In effect, Keho had ruled, BPREP was operating a hotel.
The city’s lawsuit against BPREP 8500 LLC claims that despite the City Council’s affirmation of Keho’s decision, AKA has continued to rent suites in its 110-unit West Tower for minimum stays of only 31 days. AKA has agreed to rent the 80 units in its East Tower as conventional apartments.
In addition to asking the judge to affirm its decision in the AKA matter, the city is asking that BPREP reimburse it for the costs of the lawsuit . To date, the City Council has allocated $500,000 to cover its legal costs. If the city were to lose, it would have to reimburse BPREP for its legal costs.
Sean Walsh, speaking on behalf of Brown George Ross LLP, the law firm representing BPREP said: “The court has now resoundingly and on two occasions rejected the city’s position in this matter. We look forward to proceeding with our civil rights and breach of contract claims to recover the significant damages the city actions have caused and to procure reimbursement of the significant attorney’s fees we have been required to incur.”
West Hollywood City Attorney Mike Jenkins, said: “When all is said and done, we do not believe that BPREP will be able to produce evidence to support its allegations. Since the city’s case against BPREP for breach of contract is moving forward, the matters will be adjudicated together. We remain confident that the evidence will show that the project was approved and must be used for actual housing, not for hotel stays by visitors to West Hollywood.”</p
