LAWSUITS NEWS & LEGAL INFORMATION
San Jose, CA
San Jose, CA: (May-24-07) The Hilton Hotel and Towers filed charges against the city resulting in a long standing dispute over parking fees. The hotel owners, including developer Lew Wolff, members of the DiNapoli family, and former mayoral candidate Michael Mulcahy, sued the city in 2003, claiming that the city's redevelopment agency breached terms of a 1998 deal in which the hotel paid $17 million to buy out the agency's interest in future hotel profits.
The agency had contributed $15.6 million toward the hotel's original construction cost a decade earlier in exchange for an interest in those future profits. In its lawsuit, the hotel said the 1998 buyout price was based in part on the agency's projection of future rates the city would charge the hotel for use of about 200 parking spaces in the adjacent convention center. Shortly after agreeing to the buyout price, the city raised its $30-a-space monthly parking rates but did not impose the higher charges on the hotel.
In a settlement reached, San Jose agreed to pay the hotel $3.8 million ending the lawsuit. The settlement requires the agency to make two payments to the hotel. The first $830,000 will go to the hotel and then immediately be repaid to the city to cover past underpayments of parking charges. The next $3 million will be paid to the hotel once the Hilton has spent at least $8 million on renovations, including as-yet undefined alterations of the building's exterior. Hilton officials claimed that most of the money will be spent on upgrades to the hotel. [MERCURY NEWS: HILTON PARKING]
Published on May-27-07
The agency had contributed $15.6 million toward the hotel's original construction cost a decade earlier in exchange for an interest in those future profits. In its lawsuit, the hotel said the 1998 buyout price was based in part on the agency's projection of future rates the city would charge the hotel for use of about 200 parking spaces in the adjacent convention center. Shortly after agreeing to the buyout price, the city raised its $30-a-space monthly parking rates but did not impose the higher charges on the hotel.
In a settlement reached, San Jose agreed to pay the hotel $3.8 million ending the lawsuit. The settlement requires the agency to make two payments to the hotel. The first $830,000 will go to the hotel and then immediately be repaid to the city to cover past underpayments of parking charges. The next $3 million will be paid to the hotel once the Hilton has spent at least $8 million on renovations, including as-yet undefined alterations of the building's exterior. Hilton officials claimed that most of the money will be spent on upgrades to the hotel. [MERCURY NEWS: HILTON PARKING]
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