The beleaguered Alma Plaza project in south Palo Alto has been hit with another woe: Greenbriar Homes, the Fremont-based homebuilder that recently pulled out of the project, has sued for $5.31 million in option fees it has paid over several years.
The lawsuit was filed April 21 in Santa Clara County Superior Court the same day Greenbriar notified the City of Palo Alto by letter that it "hereby withdraws from the development of the Alma Plaza property."
The suit names Trestle Alma Plaza, LLC, as the technical developer rather than John McNellis, of McNellis Partners, LLC, the public face of the project over many months, even years, of city consideration.
The final project included the building of 37 homes and a building in the front, facing Alma Street, with a modest-sized grocery store and other shops, with 14 below-market apartments above the store.
McNellis, under advice from his attorney, said he could not comment on the lawsuit.
In the lawsuit, Greenbriar claims that no land-subdivision was completed for the segment of the property it agreed to purchase "on or about April 25, 2005" for a total purchase price of $20.5 million.
"Therefore, the Agreement was and is void as of its initial execution on or about April 25, 2005," the lawsuit states, citing Government Code 66499.30 covering subdivision of land.
Greenbriar "has demanded restitution and repayment of all consideration received by Defendants," the suit states.
The suit also indicates the defendants received a total of $5.31 million "to which they were not entitled because the Agreement was void from inception."
Although McNellis could not comment on the lawsuit, he earlier told the Weekly, when Greenbriar's withdrawal became known, that the pullout was due to the recession and slump in the housing market.
Ironically, the City Council in late January gave the project the green light, although a group of residents have since launched a petition drive against the project.