Glendale sued over land deal for 10-acre entertainment district

A Legal Battle Unfolds Over Glendale’s 4 Mile District Development

A proposed entertainment district in Glendale has become the center of a legal dispute.

The developer spearheading a 10-acre project anchored by Alamo Drafthouse alleges that its contract to purchase a portion of the development site has been terminated due to actions taken by the city of Glendale.

Central Street Capital, led by Rob Salazar, filed a lawsuit against Glendale, accusing the city of breaching the contract by preparing to transfer 5 acres of land that was intended to be part of the planned 4 Mile District.

The lawsuit claims damages exceeding $20 million.

The project, named after the nearby Four Mile Historic Park, is set to be constructed on 10 acres along Virginia Avenue. While plans include various retail and dining establishments, as well as a potential hotel, the only confirmed tenant so far is an Alamo Drafthouse owned by Central Street.

Despite the ongoing litigation, Central Street has continued infrastructure work on the project, which involves underground utilities and a parking garage funded by over $50 million in bonds through a metro district.

Central Street President Isiah Salazar stated, “Construction on the site related to public improvements will continue, despite the legal action.”

However, the lawsuit poses a threat to the private development phase of the project.

Central Street only owns a small portion of the development site, with the rest being owned by Glendale.

In 2021, the two parties reached an agreement where Glendale would sell the land to Central Street in two phases upon meeting certain construction and investment milestones. Central Street was to pay $1 for each phase.

According to the lawsuit, Central Street claims to have met the milestones required to purchase Phase 1, consisting of 5 acres. Glendale initially disputed this but later agreed to proceed with the sale.

However, just before the scheduled closing date on March 5, Glendale imposed a “use covenant” on the Phase 1 property, placing restrictions on its development. Central Street argues that the covenant makes it impossible to comply with the approved development plans and affects its ability to secure financing.

The lawsuit states that Central Street proposed alternative versions of the covenant that would not hinder the property’s marketability, but Glendale rejected them. The land transfer did not take place, leading Central Street to consider the contract canceled due to Glendale’s default.

The lawsuit outlines damages sought by Central Street, including the fair market value of the Phase 1 property, expected reimbursements for land acquisition and construction costs.

Attorneys from Davis Graham & Stubbs are representing Central Street in the legal battle.

In response to the lawsuit, Glendale issued a statement vowing to “vigorously defend” against the claims, labeling the lawsuit as a frivolous attempt to exploit a technicality in a development agreement.

Glendale has long sought to establish itself as an entertainment destination, with previous projects like Glendale 180 and Glendale Riverwalk failing to materialize as planned due to various challenges.

The outcome of the legal dispute will determine the future of the 4 Mile District and the development of Glendale’s entertainment offerings.