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City demands hotel developer pay up

April 15, 2006|By Alicia Robinson

Newport Beach officials said Friday that they've met all their obligations to hotel designer Stephen Sutherland and are demanding Sutherland pay $21,453 for an environmental report on his aborted plans for a resort at Marinapark.

The city made those assertions in response to a lawsuit Sutherland filed in Orange County Superior Court in February. The suit asks for $1 million plus damages and the right to finish developing the 110-room resort, planned for a city-owned parcel on the Balboa Peninsula that residents and officials have haggled over for years.

The city responded to the suit and filed a counterclaim in March. Sutherland mailed the city a swath of documents Thursday as a prelude to a May 25 court hearing.

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Sutherland first approached the city when the council invited proposals for Marinapark, which is occupied by a mobile-home park, a Girl Scout house, tennis courts, a public beach and other amenities.

The council in 2000 approved an agreement with the hotel designer's company, Sutherland Talla Hospitality. A 2003 amendment to the contract specified that Sutherland would put zoning for the project to a public vote. He lost that vote in November 2004.

Sutherland said this week he believes he performed everything the city asked of him in the 2000 and 2003 agreements, and the agreements give him another 25 months to develop his project.

"I entered into an agreement with the city which they themselves prepared," he said. "I have completed basically everything required of me under that agreement. This action [lawsuit] is basically to enforce my rights."

He realizes that he owes the city money for the environmental report, he said, but he didn't pay it earlier because the city never cleared up confusion over which of the two agreements was the valid one.

City activists, and now Sutherland, have questioned the validity of the 2003 agreement because it wasn't signed by the city clerk or stamped with the city seal. The city charter requires those actions to make a contract binding.

"I'll write them a check in 10 minutes if they tell me which agreement it's based on," Sutherland said.

City officials say they met their obligations to Sutherland, but that his contract ? and thus his right to develop a project for the city ? expired because not all of its conditions were satisfied. Assistant City Atty. Aaron Harp said the 2000 agreement is the one that matters ? he agrees that the 2003 amendment was not valid.

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