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CIM Group to Meet Magic Castle, City of LA in Court

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We've been looking at some of the legal drama on the Yamashiro and Magic Castle hill. Part 1 is here.


Photos of CIM's Orchid Avenue rental property
If you were hoping a jury trial that pits CIM Group, one of the city's most powerful developers against the owners of Magic Castle and the city of LA, would contain a bunch of juicy allegations, well, you’ll be disappointed. The trial, which starts in two weeks, is focused on the mundane issues of water run-off and dirt. But here's the back story: The Hollywood-based developer filed a lawsuit against the Magic Castle and the city last year, claiming the two parties are responsible for water-run off and debris that's damaged a small cluster of buildings on Orchid Avenue, right at the edge of the Magic Castle property.

CIM Group purchased the three buildings, coined the Orchid Apartments, in April 2007 for roughly $2 million. One building was built in 1950, the other two in 1920, according to court filings, and have a total of 10 rental units. It's not clear why, but one of the buildings is entirely fenced off.

CIM Group blames water and debris coming from a nearby Magic Castle parcel and a city street (a street without an adequate curb) for the buildings' deterioration, and is seeking at least $1 million in damages. In a statement to Curbed, the developer stated its "plan is and has been to renovate and reposition the Orchid Apartments and return it to a productive real estate asset...The investment in renovating the Orchid Apartments, like the many other properties CIM Group has purchased and renovated in Hollywood, enhances the value of all of our property investments in the district."

This is the first time CIM Group has named the city in a lawsuit, according to City Attorney Peter Langsfeld, who agrees the buildings are damaged, but disputes that it's because of water. “The buildings are in bad shape because they haven’t been maintained,” Langsfeld says. Andy UIloa, CEO of Yamashiro, and one of the family owners of the 10-acre site, also denies the water damage.

The trial will likely take about two weeks, believes Langsfeld.

Meanwhile, if there’s some irony here, it’s this: CIM Group was said to be one of the bidders on the whole 10-acre Magic Castle and Yamashiro site when it was listed for sale a few years ago, a deal that ultimately went to Sean MacPherson.

Given that MacPherson may lose his lawsuit, one might wonder if CIM would be interested in acquiring any or all of the hill if it eventually is put up for sale again. In a statement, CIM stated it wasn't interested. “CIM Group is not interested and will not pursue the purchase of any or all of the Yamashiro or Magic Castle properties."
· At Yamashiro and Magic Castle, a Fight for the Hill [Curbed LA]

Magic Castle

7001 Franklin Ave., Hollywood, CA 90028

1811 orchid avenue, los angeles