At the Regular City Council Meeting of December 8, 2015, the City Council considered enforcement of the pending Notice and Order issued on July 2, 2013, for demolition of the unfinished structure on the above site.  At that time, the City Council continued its consideration to May 24, 2016, to allow the parties to continue to negotiate agreements to restart construction on the site.

The City Council has received various written status updates on the project over the last two years. One year ago, Brooks Street was interested in taking over the ground lease of the property from Cathay Bank to restart the construction of a new development on the property utilizing the existing skeleton structure at the site.  At the November 24, 2015, Council Meeting, Cathay Bank had reported to the City that a Purchase and Sales Agreement had been reached between Brooks Street and Cathay Bank to begin the process to renew the project.  That action was to be followed by agreement(s) between Brooks Street (new lessee), Cathay Bank (existing lessee), and the Hoag Foundation (property owner).  However, the agreement had not been finalized at that time and the City Council continued the matter to December 8, 2015.  On December 8, 2015, the City Council continued the matter for close to five months to May 24, 2016, to allow the parties more time to negotiate.

The parties were not able to finalize a deal.  Instead, litigation between Cathay Bank and Hoag Foundation ensued in January 2016, further preventing any continuation of construction on the site.  Various motions are currently pending before the court that could resolve the case, which is otherwise set for trial on March 13, 2017.  For example, Hoag's Motion for Summary Judgment is scheduled for July 29, 2016, at 1:30 p.m. in Department C11 in the Orange County central court.  Cathay's motion to strike Hoag's cross-complaint is scheduled for July 22 at 1:30 p.m. in the same court.  Consequently, an opportunity for the parties to resolve their legal entanglements may arise after the July 2016 court hearings and the Council may consider continuing its consideration of enforcement of the Notice and Order until its August 23, 2016, meeting.

Commencement of an abatement action will cost the City an estimated $6,000 to $10,000. However, the costs could increase depending on the parties' cooperation or opposition to the action.

It is recommended that the City Council:

• Continue consideration of this matter until its August 23, 2016 meeting; or

• Authorize the City Attorney to commence an action to enforce the Notice and Order to have a court order the abatement of the nuisance and appoint a receiver to ensure removal of the unfinished structures on the site.