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Legal Arbitration Awards California City of Half Moon Bay $10 Million

Tuesday, October, 30, 2012


The struggling city of Half Moon Bay, California, to the relief of its government and citizens alike, was awarded ten million dollars after an arbitration attorney ruled in its favor.

The city went after reimbursement from an insurance company at the cost of having bought 24 acres of land after a lawsuit settlement. Charles Keenan, a landowner from Palo Alto, sued Half Moon Bay in 2000 when water drainage issues caused wetlands to emerge, making the land, known as “Beachwood”, unfit for development.

Arbitration Attorney's Ruling Rivals City's Yearly Budget

The arbitration lawyer that ruled in favor of the city, Edward Panelli, is also a retired Supreme Court justice. The ten million dollars Panelli awarded to the city amounts to about half of the city's yearly budget. When Half Moon Bay will receive the money has not yet been disclosed, however, officials of the city are beginning to discuss the manner in which it will be spent.

At a council meeting held at the beginning of October, certain members proposed that the city should move forward with projects that were neglected or put on hold in an attempt to avoid the city's becoming bankrupt. Councilwoman Naomi Partridge stated, “If we could get back on track, it would be so nice to have the streets paved even every four years rather than every seven.”

Legal Arbitration Award May Be Spent on Bond Debt

Half Moon Bay has also had legal and financial trouble in relation to bonds. The Beachwood land was bought using Series B bonds that were issued by the program Build America. The Internal Revenue Service demanded that Half Moon Bay pay an additional 1.38 million dollars on the bond issue.

Half Moon Bay citizen and candidate running for a seat on the City Council spoke on the issue of the bonds at the early October meeting saying, “I think the only intelligent use of this windfall is to pay down the bonds as soon as possible in any way that makes sense.” Another council member, John Mueller, who is rerunning this November, suggested that the ten million financial arbitration awards be put in escrow and closely managed.