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Despite October Sale, Huntington Still in Limbo

By Eric Richardson
Published: Tuesday, March 02, 2010, at 12:15PM
Huntington Hotel Eric Richardson [Flickr]

Five months after the Huntington Hotel changed hands, the City Attorney's office is still trying to prove that previous owner Landmark Equity Partners acted in bad faith when it sold the 200-unit structure to a general contractor that it had previously employed.

As part of a 2008 ruling, Landmark was required to sell its interest in a number of residential properties, including the Huntington, that had been maintained in sub-standard condition.

The company had to pay roughly $1 million in damages, plus place $9 million in an escrow account. If it sold the properties on time, it would receive that money back. If not, much of it would go to the city.

The Huntington, located at 752 S. Main, was the last to sell, despite interest from several non-profit housing providers in acquiring the building. A September deadline was extended to October 5, but still Landmark was asking for more time. A September 29 extension request was denied, and on deadline day the firm completed a sale to Upland-based A Better Choice Development, Inc.

The City Attorney's office promptly filed a motion questioning whether the sale to an entity with which Landmark had done business satisfied the requirement that "any sale of the Huntington Hotel is an arms length transaction to a bona fide purchaser."

On October 14, the judge ordered that discovery in the case be reopened to allow the City Attorney's office to prove its case.

Five months later, though, the case sits open and unresolved, and Landmark's $9 million continues to sit in escrow.

According to a source familiar with the case, there is still the talks that the property could be sold to an affordable housing provider. The property is on the city's list of residential hotels, meaning that any non-affordable use would require replacement of the low-income units.

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