Thursday, June 21, 2001
Ambassador Hotel Owners Must Pay School District Interest—C.A.
By a MetNews Staff Writer
The Los Angeles Unified School District yesterday won the latest court skirmish in an extended battle over the site of the long-closed Ambassador Hotel on Wilshire Boulevard.
In an opinion by Chief Justice Charles Vogel of Div. Four, this district’s Court of Appeal ruled that the school district is entitled to collect interest that accrued since Feb. 17, 1994, the day final judgment was entered in its condemnation suit, on the nearly $48 million it deposited when it first launched eminent domain proceedings over the land.
Vogel rejected the claim of Wilshire Center Marketplace that the interest should have started to accrue only after the time expired for appealing the award of its appellate litigation expenses, three years later.
Wilshire Center was awarded appellate costs, Vogel said, but that was not part of the judgment.
“Logically, the finality and enforcement of the judgment does not depend on the eventuality of the discretionary imposition of appellate costs,” Vogel said.
The case stems from the school district’s extreme shortage of classroom space beginning in the late 1980s and the shutdown at about the same time of the Ambassador, a historic hotel that occupies 23.48 acres of prime real estate just west of downtown Los Angeles.
New York real estate mogul Donald Trump purchased the site and announced plans there to build a skyscraper. Some news outlets reported at the time that Trump planned the building to be the world’s tallest.
But the real estate slowdown and general recession of the early 1990s put a damper on the plans, and Trump later pulled out of the partnership that owned the land.
The school district filed an eminent domain lawsuit to condemn 17 acres of the parcel in 1990 to build a school. In January 1991, Wilshire Center, the successor owner to Trump, withdrew the entire $47,919,000 the school district had deposited as part of its eminent domain action.
The money was used to pay the purchase money loan secured by the property.
But in November 1993, the school district gave up on the land and filed a notice of abandonment of the eminent domain action. The Los Angeles Superior Court entered judgment granting the district the return of the entire amount of its deposit, less litigation expenses for Wilshire Center of just over $3 million.
The Court of Appeal affirmed in February 1994, and the state Supreme Court denied Wilshire Center’s petition for review in May 1996. A cost award to Wilshire Center of $122,165 became final a year later.
The school district sued to enforce the judgment in 1998, and Wilshire Center sought to stay enforcement while it fought against paying interest on the deposit money it retained and spent.
But Vogel rejected the group’s arguments.
“It is beyond dispute that the judgment is final and entered as originally determined,” he said.
In giving up on the Ambassador site, in part because of the litigation costs, the school district focused its construction program on other school sites such as the Belmont Learning Center in downtown Los Angeles.
The case is Los Angeles Unified School District v. Wilshire Center Marketplace, B129628.
Copyright 2001, Metropolitan News Company