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Woodland Hills- Catalina Yachts Project Sunk?

Development: Contamination dispute hits Woodland Hills site. By ELLIOT GOLAN SFVBJ
Prime Location: Former headquarters of Catalina Yachts at 21200 Victory Blvd.

Prime Location: Former headquarters of Catalina Yachts at 21200 Victory Blvd.

More than three years after developer Richard Weintraub agreed to purchase a high-profile Woodland Hills property for a large apartment complex, the deal has fallen apart.

The Malibu developer had been planning to build 600 apartments in nine buildings at the former Catalina Yachts site. But a dispute over soil contamination has scuttled the $21.5 million sale of the property at 21200 Victory Blvd.

It’s unclear if the deal with Frank Butler, the founder of Catalina Yachts, has any hope of revival.

Weintraub Financial Services Inc. has sued two of Butler’s companies alleging fraud and breach of contract after an extended escrow during which the company claims to have paid in excess of $550,000 as he sought entitlements for the property and the two sides attempted to work through issues on the deal.

He is seeking damages of at least $20 million now that the industrial property is entitled for the project, according to the lawsuit filed Dec. 9 in L.A. Superior Court.

The escrow was terminated by Butler in November, but Weintraub also is suing for injunctive relief and told the Business Journal that he views the escrow as still open.

“I can’t really talk about it, but the project is still going,” Weintraub said in a December interview. He declined this month to comment on the lawsuit, which came to light later.

Butler and his attorney, Russell L. Berney, also declined to comment on the litigation, but told the Business Journal last month that the escrow is closed and the deal is dead.

At the core of the dispute is contamination of soil at the site by an industrial solvent called trichloroethylene, or TCE – and specifically the source of the contamination and which entities will bear the cleanup costs.

Boeing Co. of Chicago has accepted some of the responsibility as the acquirer of Rockwell International, which operated an aerospace manufacturing plant on the site in the 1960s and 1970s. The lawsuit alleges Butler hid that his yacht operations were a source of some contamination, ruining Weintraub’s ability to get a loan for his planned development.

Tim Martin is founding partner at CA Land Use Professionals LLP in L.A., a law firm that specializes in land use and environmental issues. Martin, who is not involved in the litigation, said he was not surprised by the dispute given the challenges of contaminated industrial land.

“This is a common problem. And it’s very difficult and expensive to clean up industrial sites for residential development,” he said.

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