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Magnolia Partnership LLC informs its clients that Northgate Market has filed a lawsuit against the mixed-use commercial multi-family development of its Magnolia flats



Magnolia Partnership LLC (“Magnolia”) owns 16 acres of mixed-use zone property at 10481 Magnolia Avenue, Riverside, California (“Magnolia Property”). Magnolia purchased the Magnolia property to build an attractive mixed-use commercial development that includes much-needed workforce multifamily housing (450 apartments) and 9,000 square feet of retail space (“The Magnolia Project”). In developing the Magnolia Project, Magnolia aims to provide much-needed workforce housing for hundreds of middle- and low-income families in the Riverside community. This new multifamily housing development will greatly help the City of Riverside achieve compliance with the State of California’s Regional Housing Needs Allocation (“RHNA”) requirements. The City of Riverside is required to provide at least 18,415 new housing units for the 2021-2029 housing element cycle. An added benefit of the Magnolia project will be additional customers coming to businesses around the Magnolia property, such as the proposed Northgate Market grocery store. However, Northgate wants to halt development of the Magnolia project due to perceived accessibility and accessibility concerns.

Magnolia went through an arduous two-year process and designed the Magnolia Project, culminating with the Magnolia Project, recently being approved by the City of Riverside. The city approval includes a review of noise and design considerations for the corridor, which are governed by the State of California CEQA and the City of Riverside Code. At the time the Magnolia Project was approved, it was the largest multifamily housing community recently approved by the City of Riverside. Unfortunately, on September 14, 2021, Northgate Gonzalez, LLC (“Northgate Market”) halted development of the Magnolia Project by filing a lawsuit against Magnolia and Real Estate, LLC (“Realm”) (Northgate Gonzalez, LLC v. Realm). Gave. Real Estate, LLC; Magnolia Partnership, LLC, case number CVRI2104149). The complaint, filed by Northgate Markets, included Wilson Holdings, LP (“Wilson”), a real estate entity owned by Scott Bell of ICI Development Company, Inc., and Los Altos XXVII, LP (“Los Altos”), a real estate entity Name too. An entity owned by Northgate Gonzalez RE, LLC, of ​​which Oscar Gonzalez, Co-President, Chief Operating Officer, and owner of Northgate Markets and Carl Middleton are members as plaintiffs. According to the complaint, Wilson and Los Altos are the owners of the property where Northgate Market is located (“Northgate Property”).

In its complaint, Northgate Market alleges a technicality that the development of the Magnolia Project violates a 1979 easy agreement between Northgate Market and Magnolia Project Properties. Northgate Market alleges that the land should be used for a shopping center and commercial purposes. Previously, a Toys-R-Us operated on the Northgate property and a Gemco was located on the Magnolia property (Toys-R-Us and Gemco both closed their stores, leaving the vacant site a gloomy and under-utilized ).

Concurrently with filing its complaint, Northgate Market also placed a preliminary injunction to incorporate (block or restrict) the Magnolia Project, the largest multi-dimensional housing community recently sanctioned in the City of Riverside. Thus, pending the outcome of the ongoing litigation, the development of the Magnolia project has come to a halt. In the interim, Magnolia and Realm have appealed the preliminary injunction on the grounds that the accessibility agreement is intended for entry, egress and parking, and has no use restrictions, to maintain the mixed-use commercial Multifamily Magnolia Project. in compliance with commercial language. easement agreement. Northgate Market is yet to respond to Magnolia’s appellant brief. Additionally, Magnolia has filed a cross-complaint against Northgate Markets.

Not surprisingly, in their cross-complaint, Magnolia alleged that before being sued by Northgate Market, representatives of Northgate Market, Wilson and Los Altos demanded substantial funds from Magnolia. The cross-complainant alleges, “On or around January 29, 2019, the plaintiff and the cross-complainant’s representative [Magnolia] The cross-complainants met in Newport Beach to discuss the project. Plaintiffs’ representative Scott Bell began the meeting by saying ‘this would cost iStar too much money!’” According to the cross-complaint, the owner of the iStar Magnolia property at the time Mr. Bell made these comments Clearly, it appears that based on the timeline of events described in the cross-complaint, monetary solicitations made to Magnolia to include, or block the development of the Magnolia Project from filing a Northgate Market complaint The first is. This begs the question, was the lawsuit filed for using the constraint of the approved project to “accurate” a substantial monetary payment?

Darin Olson, a representative for Magnolia, says, “Northgate Market’s decision to file a lawsuit to oppose the city-approved development of 450 housing units is unfortunate because the state of California and the city of Riverside are in dire need of housing since the inception of Magnolia. Through the project and today, the development team has put a lot of effort into harmonizing mixed-use commercial and multi-family development with ease and integration with its neighbors such as Northgate Market, while designing the Magnolia Project. Going above and beyond. A method that addresses and addresses those concerns voiced by Northgate Market, including delivery truck circulation.” Mr. Olson adds: “Words cannot describe how disappointed we are at Northgate Market’s opposition to a much-needed 450-unit multifamily workforce housing development project. The same residents of our proposed apartment development as Northgate Market’s potential The customers are. Magnolia simply wants to improve our community by providing much-needed workforce housing in the area.”

Mr. Olson continues, “The City of Riverside describes his vision of Riverside as ‘the place where the American dream is realized. A place where people, regardless of income level, find specific, special places to live. are capable of.’ The Magnolia Project has been designed with the goal of providing such housing so that the city can realize that vision and represent that dream.Sadly, Northgate Market does not share the same dream or vision and is intent on halting the development of more workforce. housing.”

Notably, the developer behind Magnolia Flats has successfully developed other architecturally attractive multifamily projects in the Inland Empire that provide significant housing enhancements to communities. For example, “Mission Lofts” is a charming 212-unit apartment community located on the Eastside of Riverside, a Hispanic neighborhood whereby a gloomy, Metrolink adjacent, commercial site was redeveloped into workforce housing. Additionally, “Monterey Station” is a 349-unit apartment community that was developed by the owners of Magnolia and completed in downtown Pomona. Similar to the Magnolia Flats and Mission Lofts development, the Monterey Station project site was a gloomy commercial area near downtown Pomona and next to Metrolink station, before being developed into new workforce housing for hundreds of families.

Similar to Mission Lofts and Monterey Station, Magnolia’s owners are seeking to enhance and provide multifunctional housing, a 450-unit workforce on a degraded site in Riverside.

About Magnolia Partnership LLC and its InvestorsMagnolia Partnership LLC is a partnership developing Magnolia Flats, with project investors including The Bascom Group and Realm Group. They have completed over $20.7 billion in multi-family value-added transactions since 1996, including 350 multi-family community acquisitions and 90,000 units as well as multiple developments.

Source Magnolia Partnership LLC




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