Lawsuits settled in disputes over scuttled Museum House condo project in Newport Beach

With the Orange County Museum of Art having found a new buyer for its Newport Center site, the city of Newport Beach is settling lawsuits involving the museum and local activists who opposed OCMA’s attempted land sale to make way for a high-rise condominium project.

The city confirmed the settlements Friday.

The city was a defendant in two suits filed early last year related to the ill-fated Museum House condo proposal. One, filed by OCMA, challenged the validity of a petition that activists circulated seeking to force a public vote on the development. The other was filed by Museum House opponent Susan Skinner, who alleged the city didn’t properly implement its Greenlight Initiative — a growth-control measure passed by local voters in 2000 — when it approved Museum House in 2016.

The City Council revoked development approval for the 100-unit, 25-story Museum House tower in February 2017 when faced with enough petition signatures to force the referendum.

OCMA has agreed to pay $205,000 in attorney and other litigation costs to Line in the Sand, a residents group that accused the museum of threatening its free speech when the museum’s suit alleged its petition was deficient.

Skinner agreed to drop her suit, which she has said was “merely an insurance policy against the unexpected event of a successful challenge of the referendum petition.”

OCMA sued the city and individual Line in the Sand members in January 2017, before Orange County verified the signatures on the referendum petition. The museum challenged the document’s small font size and alleged it didn’t contain the full text of general plan amendments and that signature gatherers provided “objectively false information to voters” about things such as Museum House’s location, size and height and permitted uses for OCMA’s property. The petition weighed roughly 10 pounds and was about 1,000 pages long.

Line in the Sand called the suit an attempt to stifle the group’s free speech, although an Orange County Superior Court judge did not agree.

Line in the Sand appealed the judge’s ruling. An appellate court had not set a hearing date at the time of the settlement, and the group will withdraw its appeal.

OCMA had planned to sell its property to would-be Museum House developer Related California and use the proceeds to help it move to a new location at the Segerstrom Center for the Arts in Costa Mesa.

In the settlement agreement, OCMA said it now plans to sell the museum property at 850 San Clemente Drive, and an adjoining parcel, to Nexus Development Corp. It did not state the tentative sale price or what might be built there. An attorney for OCMA did not return messages seeking comment Friday.

In a side agreement, Nexus will pay Newport Beach about $40,000 as reimbursement for the city’s legal costs.

Nexus is a real estate developer with offices in Santa Ana and Phoenix. Its portfolio includes office, retail, industrial, hotel, residential and senior living facilities, according to its website.

The settlement is contingent on the sale to Nexus being completed by June 30.

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