Half Moon Bay readies appeal of $36M verdict

Half Moon Bay officials plan to appeal a $36.8 million judgment threatening to cripple city services, Mayor Bonnie McClung announced at Tuesday’s City Council meeting.

“We are united in our position at this point that this is our best course of action,” McClung said.

At the meeting, council members voted to retain an appellate law firm and a financial consultant to advise them how to tackle the judgment — which is more than three times larger than the city’s $10 million operating budget.

According to City Manager Marcia Raines, council members met with financial and legal experts during lengthy closed sessions Dec. 7 and 12. Legal firm Orrick, Herrington and Sutcliffe and financial consultant Piper Jaffray were both asked to submit proposals after offering “invaluable free advice and information,” according to Raines.

At Tuesday’s meeting, John Knox, a partner in the appellate law firm, said he believes the judge’s ruling on the lawsuit was erroneous and there is sufficient reason to appeal.

If the city goes through with its appeal, the required bond would mean significant budget cuts to parks, streets, libraries andother city services. City Council members say the worst-case scenario — that the city itself is dissolved — remains unlikely.

Most residents who packed Tuesday’s meeting said they were supportive of the decision to appeal, though some pleaded with council members to negotiate with the developer.

Resident Ozzie Montero expressed anger at the council for the city’s predicament.

“This was the result of many years of thoughtless and reckless government,” he said.

The shocking blow was delivered Nov. 28 by the Federal District Court of California, which ruled the city was responsible for creating delicate wetlands on Joyce Yamagiwa’s property by adding storm drain improvements.

Yamagiwa, a trustee for developer Charles Keenan, purchased the property, known as Beachwood, for $1 million in 1993. The existence of wetlands created a series of permit problems that prevented Keenan’s plan to turn the 24 acres into an 83-unit subdivision.

tbarak@examiner.com

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