Hollywood Park argued in a lawsuit that the city’s billboard agreement “siphons revenues away” from the development in violation of its 2015 agreement. The city countered that the development agreement was void because it was adopted by voter initiative rather than negotiated with and approved by a local legislative body, like a City Council, citing a case related to Moreno Valley, Calif., that was decided in 2018.
So Hollywood Park filed a second lawsuit.
In court documents, it argues that under the development agreement signed by Mayor Butts, the city agreed to reimburse Hollywood Park for the roughly $400 million it paid upfront for public infrastructure improvements and public services. Those payments were to begin once Hollywood Park generated more than $25 million in tax revenue for the city in a fiscal year, which has now happened, though the two sides dispute exactly when. Now that the threshold has been met, lawyers for Hollywood Park say, the city has “changed its tune” and has declared that the “development agreement is void.”
Although only a handful of developments in California have been approved by voter initiative, some experts say the Hollywood Park situation could become a high-profile test case for the California Supreme Court, if the parties take it that far.
“I think they have to,” said John Condas, an entitlement lawyer and partner with Allen Matkins. “There’s just too much money at stake.”
Mr. Butts previously trumpeted SoFi Stadium and Hollywood Park as economic engines in his city, and he has appeared mindful of the escalating nature of the disputes. In a letter to Mr. Kroenke, which he addressed to “Stan,” Mr. Butts gently complained that he had received only written correspondence from Mr. Kroenke’s lawyers, not a personal call. The legal action, he lamented, was “not in keeping with what to now has been our good and communicative relationship.”
In his interview with The New York Times, Mr. Butts similarly sought to lower the temperature.
“I don’t consider this as like a ‘Death Race 2000’ thing,” he said, referring to the dystopian cult movie in which drivers mow down pedestrians for sport. “Basically, this is a business disagreement.”
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