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Pismo Beach sues Simi Valley developer 

The City of Pismo Beach is suing a Simi Valley developer and his partners, claiming they failed to pay annual costs related to the purchase of state water for a development project that’s been stalled for more than 20 years.

According to a complaint filed by the city in SLO County Superior Court Nov. 24, developer and President of Pacific Harbor Homes Larry Persons and the other parties of interest behind the planned development, collectively referred to as LRDM, have failed to pay $115,446 in carrying charges on state water purchased as part of a court ordered settlement with the city in 2011.

The suit is yet another chapter in the legal back-and-forth between the city and Persons over Los Robles Del Mar, a housing project on unincorporated land near Pismo Beach proposed in the 1980s that remains unbuilt.

The Los Robles Del Mar project failed twice after the county’s Local Agency Formation Commission (LAFCO) denied an application to incorporate into Pismo Beach the land slated for development. The commission cited, among other worries, concerns over the project’s water use. After LAFCO’s first denial, Persons and LRDM sued the city of Pismo Beach. A settlement in the case stipulated, among other conditions, that LRDM would purchase the rights to 140 acre-feet of state water from a company called Pismo-98 LLC to mitigate the proposed development’s water use. LRDM paid roughly $3.6 million for the water, and was required to pay annual carrying costs on it as well. While the project failed a second time after LAFCO again refused to annex the land into Pismo Beach, LRDM remains saddled with the carrying costs until May of 2032.

According to the complaint, LRDM stopped paying the carrying costs in January.

“The city has paid all of the carrying charges associated with the state water project water, including an additional acre-feet allocation in 2015,” the complaint reads. “LRDM has not made any payments to the city in 2015 for its share of the carrying charges.”

Pismo’s suit against Persons and LRDM comes on the heels of the dismissal of another lawsuit filed by the developers against the city. That lawsuit, filed by LRDM against the city in August, harshly criticized the water deal, claiming that LRDM paid far more for Pismo 98-LLC’s water rights than if it had gone elsewhere. With annexation denied, and the project unbuilt, LRDM remains stuck paying for the water.

“As a direct consequence of the city’s actions, LRDM has suffered, and will continue to suffer, substantial damages,” one LRDM court filing stated.

That suit asked the judge to order the city to back a third run at annexation, but it was dismissed without prejudice in October. 

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