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17-0606_ADVANCED GROUP 99-SJ & 03-79-2 (ARES)_E13_CorrespondenceRUTAN RUTAN 4, TUCKER, LLP Douglas J. Dennington Direct Dial; (714) 641-3419 E-mail; ddenningtonqDt rutan.com 6/6/2017 E13 June 5, 2017 VIA E-MAIL Mayor and City Councilmembers City of San Juan Capistrano 32400 Paseo Adelanto San Juan Capistrano. CA 92675 Re: Plaza Banderas I lotel Project Dear Mayor and City Councilmembers: This office represents Mr, Bill Griffith and South Coast Investors 1I ("SCI"), and related entities affiliated with Mr. Griffith. On May 16, 2017, the City Council voted 3-2 to grant SCI a one-year extension of its Development Agreement with the City concerning the Plaza Banderas hotel project. This was the second of three one-year extensions that were fully anticipated and allowed for in the Development Agreement. Mr. Griffith and SCI want to thank Mayor Ferguson and Councilmembers Maryott and Patterson for voting to approve the extension, and want to assure them and the residents of the City that SCI will work diligently to develop the construction plans and to complete the project at the 4 -star luxury standard, However, our clients are extremely concerned by the comments of Mayor Pro Tem Farias and Councilmember Reeve in voting against the extension, as the comments reflect that these officials are seeking to punish our clients for exercising rights secured by the Constitution and federal statutes. Specifically, Mr. Farias and Mr. Reeve are openly motivated by a desire to retaliate against our clients for filing a lawsuit challenging the City's approval of the Kimpton hotel project. The right of access to the courts is subsumed under the First Amendment right to petition the government for the redress of grievances. (,See, e.g., California Motor Transp. Co. v. Trucking Unitd, 404 U.S. 508, 510 (1972); Harrison v. Springdale Water & &14,er Com., 780 F.2d 1422, 1427-28 (8th Cir. 1986). Deliberate retaliation by state actors against the exercise of this right is actionable under 42 U.S.C. section 1983. (Franco v. Kelly, 854 F.2d 584, 589 (2d Cir. 1988); Soranno's Gasco v, Morgan, 874 F,2d 1310, 1314 (9th Cir. 1989).) Mr. Farias expressly referred to our clients' lawsuit against the Kimpton project, stating that the suit could impact/delay tax revenues to the City. He concluded by stating the following: "I don't want to play politics, but I do want to look out for the taxpayer, and I think if we delay this extension, we will have some leverage in making sure we get both projects approved." 611 Anton Blvd., Suite 1400, Costa Mesa, CA 92626 PO Box 1950, Costa Mesa, CA 92629-1950 1 714.641.5100 1 Fax 714.547,9035 135?016052-0005 Orange County I Palo Alto I Greenwich I www,rutan.com 109915913a06105/17 RUTAN RUTAN 6 TVCAEP LLP Mayor and City Couneilmembers June 5, 2017 Page 2 Similarly, Mr. Reeve expressed concern about the lawsuit, stating the delay involved in constructing the Kimpton hotel would potentially cost the taxpayers a great deal of tax revenues. He then stated that if he were in business with someone on a project, and that person were suing him, then that person would have to "stop suing me first" before he would go into business with that person. Councilman Reeve suggested that the Council should "continue this as late as possible". He then brought up the Forster Street sidewalk, which he said was "the final straw that broke the camel's back." The proposed Forster Street project, which is a completely unrelated issue that was not even on that night's agenda, involves our client freely giving away land from their nationally registered historic landmark so that the Kimpton hotel can complete their road design. The Kimpton is required under a condition of approval to provide it themselves, but the City has decided to demand it from the adjacent historic property instead. He concluded by asserting that the City's decision on our clients' extension request should be continued "to work out some issues". It is readily apparent that Mr. Farias and Mr. Reeve are attempting to retaliate against our clients for challenging the City's approval of the Kimpton project, and are seeking to use the City's regulatory power as "leverage" against our clients to force them to dismiss their lawsuit. The City is required to provide SCI a fair hearing and impartial decision-making on the merits. (See Clark v. City of Hermosa Beach, 48 Cal..App.41" 1152, 1170-71 (1996)). As explained in Clark, "[b]iased decision makers are .. , impermissible" and a counciImember's personal "embroilment in the dispute" will void the administrative action." (Id. at 1170.) Because Mr. Farias and Mr. Reeve have made their intention clear—to hold SCI's project hostage as a means to silence SCI in its challenge of a completely separate project-- their continued participation in any matters involving SCI would deny SCI even those most rudimentary notions of due process. As such, Clark requires Mr. Farias and Mr. Reeve to recuse themselves on all future matters involving SCI. (Id. at 1173 [holding that councilmember with personal interest in the outcome of a plarming commission appeal had a common law conflict of interest and was required to recuse himself from participating in the administrative decision].) Accordingly, Mr. Griffith and SCI hereby demand that Mayor Pro Tem Farias and Councilmember Reeve recuse themselves from any other consideration of matters concerning the Plaza Banderas hotel project. Sincerely, RUTAN TUCKS LP W D ugl s J. en Yington DJD:kfw 235/016052-0005 10991591.) a06/05/17