The city of Half Moon Bay announced Thursday it has received an interim award of $10 million from a former insurer following a long-standing dispute over liability coverage related to the Beachwood land-use case. The award is the result of arbitration the city’s attorney considers binding and the money could be forthcoming in a matter of weeks, according to City Attorney Tony Condotti.
The award was rendered by retired California Supreme Court Justice Edward A. Panelli and could cost the Insurance Company of the West millions of dollars. It represents the culmination of the first of two phases of arbitration. The second phase could add interest to the total payout. That phase of discussions has yet to be scheduled, Condotti said.
The city ultimately paid $18 million to the owner of land known as Beachwood on the city’s north side, after a court ruled the city rendered parts of the land undevelopable as the result of botched drainage work years ago. Since then, the city has struggled financially, shuttering its police force and laying off employees.
The city has already recovered $5 million from a separate claim against a liability plan run by the Association of Bay Area Governments. The $10 million award means that the city has recovered 84 percent of the total judgment from its insurers.
Condotti said he expects the money “in the next several weeks to months.” He said the insurance company, sometimes known by the initials ICW, is viable and able to pay the claim.
In a press release from the city, Mayor Allan Alifano said city leaders would be meeting to decide how to spend the money but that he expected the city would be “looking to pay off much of the $18 million” in bonds issued to pay for the settlement with landowner Chop Keenan. He indicated some of it could be used for other city priorities.