Monterey Bay Shores, a proposed resort on 39 acres of Sand City’s northern coastline, may finally break ground soon. Or, it may not. It’s complicated.
The project’s developer, Ed Ghandour, has been locked in litigation for several of the years since Sand City approved the project in 1998. He’s sued the California Coastal Commission for denying the project, and ultimately prevailed. (The Coastal Commission approved it in 2014, with a lengthy set of conditions.)
He’s sued the U.S. Department of Fish and Wildlife over their pressure that he obtain a costly incidental take permit – which would mitigate liability if the project leads to harm of federally threatened species – and also prevailed.
But now he’s in litigation over whether or not he controls the project, and the Coastal Commission – which hasn’t signed off on pre-construction conditions, but is close – doesn’t know who it should be negotiating with.
“It’s kind of a complicated mess,” says Dan Carl, the agency’s Central Coast district director.
At the heart of that mess is an agreement Ghandour’s company, Security National Guaranty (SNG), made with another company, Evariste Group LLC, in September 2015. In it, Evariste agreed to form a joint venture and loan Ghandour’s company $27 million.
As a stipulation of that agreement, Ghandour’s company was not to spend more than $25,000 per month on the project without prior approval, a stipulation Evariste claims was violated every month since the agreement was made.
Evariste sued Ghandour’s company in February 2016 to take over management of the project, and won an injunction in August 2016. SNG then appealed. The state’s First District Court of Appeal upheld the injunction, and the case remains locked in litigation with Ghandour still fighting to regain control.
“We will prevail on all matters,” says Ghandour, who calls Evariste Group a “predatory lender,” and says he would have started grading the project site two months ago if not for the litigation.
Jerry Marcil, who’s managing the project for Evariste, says, “[Ghandour] has sued us at every corner.” Marcil says he is confident Evariste will continue to prevail, and adds grading could start on the project as soon as the next month.
Sand City, meanwhile, is steering clear of the controversy. City officials continue to meet with contractors and engineers regarding pre-construction requirements, like having a stormwater runoff plan during construction.
The Coastal Commission has reached a tentative agreement with Ghandour over a habitat protection plan – which would address protecting threatened species during and after construction – but that agreement has been thrown into limbo by questions of who, exactly, controls the project.
“Now it’s just this question of who’s in charge,” Carl says. “We’ve been contacted by both entities, suggesting this is their project, and that puts us in a tough spot.”
When the ownership issue is resolved and the Coastal Commission signs off, the local coastline is set to be transformed: The sand dune known as Scribble Hill will be reshaped, and an estimated 400,000 cubic yards of sand will be disposed of – roughly twice the amount of sand mined annually by the Cemex operation in Marina.