Beachwood just seems to be the gift that keeps on giving. For many, it’s probably just a so what; but to many others, that 11-07 adverse Judgment provided in SF’s Federal Court was/is the source of tremendous grief.
As most may remember, Judge Walker decided against HMB and awarded the plaintiff in the matter the full $37 million he’d sought. Further, the Judge then granted $5 million on top of the $37 million for plaintiff legal fees, bringing the Judgment’s value to $42 million. The City of HMB had a $10 million annual budget at the time. Ouch.
Since that day in November 2007, Beachwood has provided the City with an array of activity. The City was initially restructured by reducing City staff by over 35%, to reduce expenditures and to receive the highest rating possible so the City could borrow to fulfill the Settlement Agreement, should the first leg of the Agreement fail. The first leg was an attempt to circumvent environmental laws, just for Beachwood, and let the developer build. That leg failed after multiple attempts and millions of dollars spent; so the business of borrowing came to HMB, and HMB sold bonds to collect the $18 million needed to satisfy the Agreement, with the first payment on the bonds by the City, @ $1.126 million p/yr for 30 years being made in August 2010.
During the scramble for resolution, in 2008 I believe, a young lady by the name of Yalitza Dunham, an attorney and the daughter-in-law of a local property owner, provided the City Council with a suggestion: the City has the right, the obligation and should pursue a $5 million insurance payment on Beachwood from ABAG. The Council politely balked, but upon further inspection, decided to go for it. They got it and some of those monies were used to pursue the legislative leg of the Settlement Agreement ... until that leg collapsed. There were only 2 legs to the Agreement: either build or pay. Hence, the restructuring, payment and then the pay back of the borrowing.
Seems at least once a year since that day in November 2007, we see Beachwood on the front page of the Review for some reason. The Judgment, the Settlement Agreement, the attempted legislative work around, the City restructure, the borrowing for and subsequent payment of the second leg - the $18 million - the feds coming to town telling HMB that they were misusing the fed funds borrowed and subsequent fines, and more.
The more is the purpose of this piece. In 2012, after a long period of pursuing a financial remedy from an insurance company that HMB held a Policy with (in 6 month intervals / Insurance Company of the West) back in 1991-1992, the City proclaimed a financial victory after being awarded $10 million by an arbiter through mediation. I was shocked - pleasantly shocked to say the least. So were many others. Then, this year (2013) we saw that same mediation produce another $3+ million from the same claim and mediation, bringing the total from that case to just over $13 million. When we add in the $5 million from Mrs Dunham’s suggested advice, HMB had received just over $18 million in insurance claims on Beachwood. Remarkable, really. That means that HMB has recovered more than they paid to the plaintiff ... but not as much as is required to satisfy the money needed to pay back the loans taken to satisfy the complete repayment of borrowed money for leg 2 of the Settlement Agreement.
And just when I though things might just move on, that we had done remarkably well all things considered, I saw this piece in the HMB Review: “City seeks $5 million from past insurers”, http://www.hmbreview.com/news/city-seeks-million-from-past-insurers/article_069bb80c-c329-11e2-b34b-001a4bcf887a.html
I expressed some of my thoughts on this to the piece (written by Mark Noack). So did a few others. I’d be happy to express more thoughts and explain why I feel the way I do, but I’d rather hear the thoughts of others. They may make me re-evaluate my own.
So, before I get in too deep, is there anyone out there that might have some thoughts on this that they’d like to share?
