USC and Urban Partners Win Decisive Victory Against Conquest Housing

DOWNTOWN LOS ANGELES — The lawsuit between USC and Conquest Student Housing, filed back in September, has produced some concrete results. A settlement has been signed prohibiting Conquest from "challenging and interfering with any current or future University of Southern California (USC) development project, any Urban Partners project and any student housing project undertaken by private developers within two miles of USC’s University Park campus."

In other words, that tactic of fighting competition via environmental lawsuits is probably toast. Various city councilmembers should be glad to hear this. Councilwoman Jan Perry was quoted in the lawsuit as being "stunned and disappointed and disgusted" by Conquest's suit against the Herald Examiner project, on which Urban Partners was a consultant.

Part of the settlement involves Conquest immediately dropping nine lawsuits against Urban Partners projects. The settlement is filed with the court, meaning that the district judge has the right to intervene and impose sanctions should the terms be violated.

The release from Urban Partners is after the jump.

Conquest Student Housing Permanently Prohibited from Interfering with Housing Projects Near USC

Long Delayed University Gateway Projects to Proceed

Los Angeles, Calif. (January 25, 2008) – Conquest Student Housing, LLC and its principals are prohibited from challenging and interfering with any current or future University of Southern California (USC) development project, any Urban Partners project and any student housing project undertaken by private developers within two miles of USC’s University Park campus, as a result of a stipulated permanent injunction entered into the United States District Court for the Central District of California. The permanent injunction is part of a legal settlement between Conquest, USC and Urban Partners, the developer of a proposed mixed-use student housing development for USC students.

The settlement follows a ruling last month by the United States District Court, which rejected Conquest’s motion to dismiss a lawsuit filed by USC and Urban Partners alleging a lengthy campaign by Conquest to monopolize the student housing market around USC by attacking competing development projects, including Urban Partners’ University Gateway Project. The U.S. District Court refused to dismiss the lawsuit on First Amendment and other grounds.

“Today’s settlement allows USC to focus on meeting the housing needs of our students without fear of vexatious litigation designed to monopolize the student housing market around campus,” said Michael L. Jackson, Vice President of Student Affairs for USC. “We eagerly anticipate the opening of the University Gateway project, and the vitally needed housing it will provide to more than 1,600 USC students. We hope to see expanded interest in developing additional student housing now that the threat of interference and litigation from Conquest is gone.”

The permanent injunction entered by the Court on January 23, 2008 was stipulated and agreed upon by all parties in the case -- including Conquest and its principals -- as part of the parties’ settlement of the Federal Court lawsuit and related claims. Because the permanent injunction was entered with the Court, the Court will retain jurisdiction over the case and can impose sanctions on Conquest or its principals if they violate the terms of the injunction.

In addition, as a result of the settlement, Conquest is required to take action to immediately dismiss nine lawsuits that Conquest initiated involving current or former Urban Partners projects, including University Gateway. The injunction paves the way for University Gateway to move forward, with groundbreaking expected this June.

“Urban Partners is elated by the permanent injunction entered by the United States District Court against Conquest and its related entities. It puts behind us years of baseless, costly litigation initiated by Conquest, and allows us to immediately refocus our energy and attention on the University Gateway Project as well as our other projects that have been obstructed by Conquest’s actions,” said Matthew Burton, a Principal of Urban Partners. “The University Gateway Project was designed with the community in mind and will be a cornerstone in the redevelopment and revitalization efforts along the corridors of Jefferson Boulevard and Figueroa Street.”

USC and Urban Partners originally filed the lawsuit on September 4, 2007 in U.S. District Court, Central District of California. According to the lawsuit, Conquest violated the Racketeer Influenced and Corrupt Organizations Act (RICO), the Sherman Act, the California Unfair Competition laws, and other state and federal laws.

“The resolution of this case stands for the proposition that anti-competitive, commercial use or other abusive use of environmental and land-use laws is actionable under both federal and state law and is not a protected right,” said Howard Stahl and Karl Tilleman, partners at Steptoe and Johnson, LLP, which represented USC and Urban Partners in the lawsuit. “If a developer uses such laws to engage in racketeering or monopolistic activities, or other potentially unlawful conduct, there is a remedy,” Stahl and Tilleman said.

The University Gateway Project, which was delayed more than two years by Conquest’s conduct, is scheduled to break ground in June 2008.

About Urban Partners LLC

Urban Partners is a real estate investment, development planning and management firm. The company pursues select market niches where complexity or innovation creates exceptional potential for its partners and clients. Urban Partners’ business model is focused on equity-based investing and development. Urban will also provide fee development services in certain instances. Current equity projects include residential and mixed-use developments in urban core and high population growth areas of the western United States and major land development projects requiring detailed planning and entitlement strategies. Urban Partners’ projects and services include land development, mixed-use development, apartment and condominium homes, transit-oriented development, student housing, financial restructurings, built-to-suit development and the adaptive reuse of historic structures.

The company was founded in 2000 by Paul Keller, Dan Rosenfeld and the late Ira Yellin. Matthew Burton and John Hrovat became Principals of the firm in 2005 and 2006, respectively.

About the University of Southern California

Founded in 1880, USC is the oldest private research university in the western United States. USC annually enrolls more than 33,000 students in exceptional degree programs at the undergraduate, graduate, and doctoral levels. USC’s 3,200 full-time faculty provide instruction in more than 77 undergraduate majors and 139 graduate degrees, and conduct world-class research in every area of scholarly inquiry. USC is a global university, hosting the largest number of international students in the U.S. and enjoying an extensive network of programs in the Pacific Rim and around the world. Under the leadership of the institution's 10th president, Steven B. Sample, USC has become world-renowned in the fields of communication and multimedia technologies as well as in cross-disciplinary teaching and research, has received national acclaim for its innovative community outreach programs and has solidified its status as one of the leading research universities in the United States. USC is the largest private employer in Los Angeles, annually stimulating $4 billion in economic activity in Los Angeles County.

About the University Gateway Project

The eight-story University Gateway Project will be home to more than 1,600 students and will provide more than 11,000 square feet of student service facilities, including computer rooms, laundry facilities and exercise rooms. The 421-unit project will also contain 83,000 square feet of neighborhood-oriented retail, including a bookstore and restaurant. The University Gateway Project is designed to help increase the limited supply of student housing near USC and enjoys widespread support in the surrounding communities from a diverse roster of community groups and civic and elected leaders. The project will be built entirely with private money and uses no public subsidies.