Downs is Dead

Seaside Mayor Ralph Rubio said the idea that Seaside might try to develop the Downs project site in other ways was not true, "because we don’t own that parcel."

Nic Coury

When Seaside City Council approved the Monterey Downs environmental impact report Nov. 10 in a 3-2 vote, not a person in the council chambers would have guessed that, just three weeks later, the council would consider rescinding that approval.

But that is what happened Dec. 1, when the council voted 5-0 to de-certify the EIR and rescind all project approvals. 

The move came after Downs attorney Beth Palmer sent the city an email Nov. 22, writing that developer Brian Boudreau's Monterey Downs, LLC would not sign an indemnification agreement that release Seaside from all legal liabilities related to the project.

Furthermore, she asked the city to cease all payments related to the project. 

In response, the city posted its Dec. 1 city council meeting agenda the next day that included rescinding all project approvals except for the EIR. Then, Nov. 30, a new special meeting agenda added decertifying the EIR as well. 

With the 5-0 vote Dec. 1, Monterey Downs is officially dead, and will never be revived. 

After the vote, the chambers fell silent, and Mayor Ralph Rubio quickly moved on to the next agenda item. 

Given that the project was proposed about six years ago—and vehemently opposed by many residents all along—there was much celebratory hand-shaking in the hallways after the vote. 

People hugged, everyone smiled. 

The meeting featured a familiar cast of characters that have long attended Downs meetings, with only Boudreau and Palmer being notably absent. 

After public comment, during which the council was mostly urged to rescind approvals, City Attorney Don Freeman advised the council about the legal liabilities the city could face if it did not rescind the EIR; this came after activist groups Keep Fort Ord Wild and Landwatch both sued the city Nov. 28 over its project approvals. 

He added there was much risk in allowing the EIR to live on, and perhaps let another developer use it for a different project. 

"By rescinding, what we’re attempting to do is start with a clean slate," Freeman said. "There is no benefit to anyone to keep any of the approvals in place."

The councilmembers who supported the project—Mayor Ralph Rubio and councilmembers Ian Oglesby and Dennis Alexander—stuck by their prior judgment in approving it, but said they understood the necessity to now rescind those approvals. 

Oglesby asked if the developer would have to pay back the money the city has spent on the project that has yet to be reimbursed—presently about $103,000—and was told by Freeman that yes, the city expected to be repaid. 

"I think what I did was right," Oglesby said, referring to his votes to approve the project. "It might have been the wrong decision."

When Councilmember Dave Pacheco asked Freeman if the city would be on the hook to defend the lawsuits, Freeman said, "There are certain things I will not discuss in a public meeting."

It will be interesting if Seaside ever sees that $103,000. According to Salinas resident Eric Petersen, a retired auditor with the Internal Revenue Agency, it would not be hard for Boudreau and his partners to walk away, because limited liability companies (LLCs) are easy to dissolve.  

He says it was something that drove auditors nuts in his time at the IRS.

"If [Monterey Downs, LLC] goes through with the documents to dissolve the LLC, if they just walk away, I don’t think Seaside has any recourse," he says. 

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