Owner Says Tenant Anaheim Plaza Tried to Scuttle Deal
A legal battle has erupted over a 10-acre parcel crucial to the planned $500 million Pointe Anaheim shopping and entertainment complex across the street from the Disneyland Resort.
The property’s owner, Pyrovest Corp., filed suit in July against its tenant, the Anaheim Plaza Hotel, and its operator, Tushar Patel, alleging they interfered with and killed a deal to sell the land to the developers of Pointe Anaheim.
Patel also is the chairman of Costa Mesa-based Tarsadia Hotels, which owns 16 properties and 4,100 hotel rooms company-wide, including the recently purchased Anaheim Marriott, OC’s second-largest hotel.
The Anaheim Plaza site, at the corner of Harbor Boulevard and Disney Way, is more than a third of the planned 29-acre Pointe Anaheim project and includes its Harbor Boulevard frontage. The Pointe Anaheim developers had offered Pyrovest $35 million for the parcel.
Pyrovest attorney Joel Kew, of Palmieri, Tyler, Wiener, Wilhelm & Waldron LLP in Irvine, said the Anaheim Plaza and Patel exercised the right of first refusal included in their lease, but later withdrew their interest in the site.
The Pyrovest suit alleges that Patel “had neither the capacity nor the intention of purchasing the property” and used the maneuver to disrupt the Pointe Anaheim deal in an attempt to “extort an additional cash payment or lease concession from the plaintiff.”
Pyrovest’s suit seeks cash damages.
In a counter-complaint, Patel says that Anaheim Plaza withdrew from the land deal because Pyrovest did not initially disclose the restrictions on the property stemming from the settlement of a previous lawsuit between Pyrovest and Walt Disney Co. Also, the hotel operators say they conducted an environmental study of the site that revealed it is contaminated with asbestos.
The hotel operators say that Pyrovest is now liable to pay it 12 months of rent, return its $350,000 lease deposit and pay 25% of its expenditures.
Anaheim Plaza’s attorney, Ben P. Pugh, of Enterprise Counsel Group in Irvine, said he could not discuss the case.
Pointe Anaheim developers, which include Western Asset Management Group of Phoenix and Excel Legacy Corp. of San Diego, are proposing to spend $75 million to buy nine parcels from 15 property owners, including Pyrovest.
Meanwhile, Pointe Anaheim spokesman Jason Grange said no new acquisitions have been finalized since the project’s developers bought a small 30,000-square-foot property in April last year. Also, Grange said that the Pyrovest property was still being sought and the financing for the project is anticipated to come through by the end of the summer.
“Our position concerning the Pyrovest property has never changed, we had and have a continuing interest in acquiring the (Pyrovest) property,” Grange said. “We have and continue to regularly communicate this interest to Pyrovest and its various representatives.”
Regardless of the lawsuit, Pointe Anaheim developers are not prevented from pursuing the property, Pyrovest attorney Kew said.
“Sure, a deal could be put together independent of the litigation,” he said.
On the other hand, the litigation does not affect Patel’s lease, and he retains the right of first refusal on any new deal.
The Pointe Anaheim project was originally proposed in May 1998 and developers said they planned to build in 1999 and open in 2000. n
