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For some land developers, there are much more efficient ways to make money than actually developing property, and perhaps the most lucrative is to sue the pants off a small coastal community. Take the current case of developer Charles “Chop” Keenan, who was awarded a comfortable sum of $36,795,000 in damages, to be paid by the city of Half Moon Bay (population 12,000, roughly the size of Capitola) at the rate of approximately $3,000 per resident. The lawsuit charged that a decision by the city council in 2000 denying permission for the developer to build an 84-unit housing complex on his property was made on unfounded grounds that the land is a wetlands habitat, protected from development under the California Coastal Act of 1976. Judge Vaughn Walker ruled that the wetlands were not, in fact, real wetlands, and the city, which has appealed the ruling, now faces heavy costs and, perhaps, bankruptcy. But in the beginning, it appears that Keenan did genuinely want to develop the land, and since purchasing it for $1 million in 1993 he has adamantly argued that the swampy 25-acre property was not always swampy. He claims that artificial circumstances in the past two decades led to water collecting in pools, thus duping environmentalists into believing the land is really a wetland. The lawsuit’s $36.8-million sum derives from optimistic calculations, projections and guesswork, according to Mark Massara, environmental lawyer with the Sierra Club who has worked in coastal resource matters for 15 years. He feels that Keenan will be getting away with robbery should the city’s appeal be rejected. “He’s saying, ‘Had I actually built the homes, and had every aspect of the project played out in optimum conditions in the best of circumstances on my very best day, I would have made that much money,’ and all without having to even do his project,” Massara says, adding that such a style of business is part of a trend of fraudulent behavior among developers. “Up and down the state we have cases of people litigating ‘takings’ cases,” he says, ”where developers sue, claiming that taxpayers should have to compensate them to the tune of their best-case scenario profit margin, which takes the entire risk of real estate development and dumps it onto the public.” The Ninth District Court of Appeals in San Francisco will handle the matter in coming months as it reviews Half Moon Bay’s appeal and, in the end, decides whether or not taxpayers must foot Keenan’s bill. If the city loses and is forced to declare bankruptcy, it may need to dissolve, returning jurisdiction of its boundaries to San Mateo County.
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