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SDNews.com
Home Beach & Bay Press

Belmont Park lease dispute triggers $25 million breach of contract dispute

Tech by Tech
January 18, 2012
in Beach & Bay Press, News, No Images
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Tom Lochtefeld, the former operator and master leaseholder of Belmont Park, filed a lawsuit in December and is suing the city for $25 million for breach of contract and fraudulent misrepresentation. Lochtefeld was forced to give up the lease in June after a bankruptcy hearing awarded receivership to the East West Bank. “We are confident in defending the city against Mr. Lochtefeld’s claims,” said Jonathan Heller, communications director for City Attorney Jan Goldsmith’s office. Heller declined to address further questions over the city’s split with Lochtefeld because of the litigation. The bitter lease dispute with the city forced the closure of the iconic and historic Plunge pool in May. That facility has yet to be reopened and a target date of November has since lapsed. “The people that are hurt by this are the customers and users of The Plunge,” Lochtefeld said. The Lochtefeld-city relationship dates back to 2000 when the city asked him to take over the lease of Belmont Park. Lochtefeld launched improvements to the park, which included creating the Wavehouse Athletic Club in 2002 and the eye-catching wave simulation machine guests can bodyboard on. The lease relationship began to sour after Lochtefeld proposed a plan to revitalize Belmont Park with a water park and hotels in 2006. According to Lochtefeld, the plan was received positively by the city initially, but said he did not hear back from officials until 2008 when the city rejected his plan. City officials claimed Lochtefeld was in breach of contract for incorrectly submitting his proposal. The end result was that Lochtefeld was no longer eligible to receive rent subsidies and his rent increased by about 800 percent, from about $70,000 to $550,000 — a clause city officials maintained Lochtefeld agreed to and knowingly entered into when he assumed the lease. Lochtefeld, however, was unable to pay the rent hike, and the city declared him in default. Lochtefeld filed for Chapter 11 bankruptcy in November 2011 and was forced to close The Plunge on May 26. Belmont Park is currently operated by Ken Krasne of Los Angeles, the court-appointed receiver. The Plunge is scheduled to reopen after temporary repairs are made but there is no word yet on when those repairs will happen. To keep the pool opened permanently, the facility will need another $1.2 million in repairs, according to an engineer hired by the city. “It will probably be open for six months but there is no plan to go forward to fix it permanently,” Lochtefeld claims. When Belmont Park and The Plunge opened almost 87 years ago in May 1925, The Plunge was the largest saltwater pool at the time. Over time, the park fell into disrepair and was closed in 1976 but was reopened in 1990 thanks to a grassroots “Save the Coaster” campaign. The Plunge remained open except for a brief period in 1987-88. There is a “Save the Plunge” website at www.wavehouseathleticclub.com/savetheplunge.

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