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Beery sues city for lease

Submitted by on 1, March 13, 2009 – 7:30 amOne Comment

Local landowner and yacht salesman John Beery is back in court, this time with a lawsuit against the city.

City officials want to terminate the lease he holds on a 17-acre portion of the old Todd Shipyards property that he has rented since 1984. But Beery’s attorneys are arguing that the city owes him the right to continue renting the property for another 25 years.

Beery has owned 48 acres of the former shipyard, which runs along Main Street, since 1983. The remaining 17 acres leased by Beery is owned by the state Tidelands Trust and operated by the city in the state’s stead. The city and Beery jointly own utilities, and the ownership lines literally run down the middle of some of the buildings. So the city decided it would be better for everyone if the properties continued to operate as a unit.

The city leased its portion of the property to Beery’s Alameda Gateway Ltd. in 1984 for just $15,000 a year – provided Beery made $20 million in “revenue generating improvements” that included construction and rehabilitation of hundreds of thousands of square feet on the combined properties. (The amount was later reduced to $10 million, and half the rent was ultimately kicked back to Beery for a portion of the property that ended up being used for ferry service.)

Beery and his investors reportedly had planned to develop the land into a recreational marina. But they instead became mired in an epic legal battle with the Army Corps of Engineers and the Port of Oakland, which wanted some of Beery’s property for a turning basin.

Beery’s lawyers say that the $10 million in improvements the port spent for that project plus $6 million made by a tenant satisfy the terms of his agreement with the city.

Ultimately, Beery improved just 17,360 square feet of land, according to a 2005 letter that then-City Manager Debra Kurita sent denying his request to exercise his option to renew the lease that is included in the suit. (The lack of development, incidentally, was to have driven the rent up to $50,000 a year.)

The city officially notified Beery it was terminating Alameda Gateway’s lease last September.

Beery’s attorneys argued that the loss of the lease, whose rent is “at a fixed rate substantially below the market rate for similar premises,” would result in “significant damages” to their client.

Beery’s attorneys did not return a call seeking comment. City Attorney Teresa Highsmith said the city has not yet prepared its response to the suit, though she pointed The Island to the city’s September letter to Beery.

“I think our position is fairly obvious,” Highsmith said.

Beery is also in the midst of a suit with the school district that attempts to invalidate the just-passed Measure H parcel tax (and that suit, by the was, was just merged with a separate suit that was filed to void the tax).

The case number is RG09437124.

One Comment »

  • KAREN says:

    i HOPE HE WINS. THE CITY IS GETTING OUT OF CONTROL WITH TAXING RESIDENTS TO DEATH. i'M EMBARRESSED THAT THE CITY HAS ASKED FOR STIMULAS MONEY WHEN WE HAD GOB OF MONEY TO BUILD A STICKING PARKING STRUCKTURE AND REVAMP PARK STREET AND WEBSTER STREET, TAKING OUT A BUNCH OF TREES AND MAKING MORE PLANTERS AND LESS PARKING. WHATEVER HAPPENED TO SAVING FOR A RAINY DAY? DOES MONEY CONSTANTLY HAVE TO BE SPENT? EVER HEARD OF RESERVES??? WHAT, i DIDN'T THINK SO. i DON'T KNOW WHY IT IS CALLED COMMON SCENCE, BECAUSE IT NOT COMMON AT ALL!!!!

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