Republic Metropolitan LLC (ReMet) has filed a lawsuit against the City of Santa Clara, alleging that the city abruptly terminated negotiations on a significant development project, thereby breaching both express and implied terms of an Exclusive Negotiation Agreement (ENA). The complaint was filed by ReMet in the Sixth Appellate District Court of California on May 24, 2024.
According to the court documents, ReMet proposed a high-density housing and amenities project near a train station and university on land owned by the City of Santa Clara and Valley Transportation Authority (VTA). The project was expected to generate nearly $1 billion in economic benefits. Negotiations for this project began in 2016, leading to an ENA signed in February 2018. This agreement mandated good faith negotiations for 12 months with an option for a six-month extension. During this period, neither the City nor VTA could negotiate with any other entity regarding the property.
The ENA was first extended in February 2019 for six months. In July 2019, the City Council authorized another extension until August 5, 2020. Despite continued progress on the project after this date, no formal amendment extending the ENA was executed. In October 2020, the City Council voted in closed session to terminate the project, which led to ReMet filing its lawsuit.
ReMet claims that despite thousands of hours and millions of dollars invested into advancing the project, it failed due to what they allege as bad faith actions by the City. Specifically, ReMet argues that termination occurred despite ongoing collaborative efforts up until the final day before the vote. The plaintiff asserts that this termination breached both explicit terms of their agreement and an implied covenant of good faith and fair dealing.
The trial court initially sustained a demurrer without leave to amend based on findings that ReMet had not sufficiently pleaded facts invoking doctrines like waiver or equitable estoppel that would nullify expiration dates set forth in their agreements. The court found that ReMet did not demonstrate how these doctrines could extend obligations beyond August 5, 2020.
ReMet is seeking judgment from the court to recognize breach of contract claims along with associated damages for lost investments and proprietary information shared during negotiations. They also seek specific performance or other equitable reliefs such as attorney fees.
The case is being overseen by Judge Lie at Santa Clara County Superior Court under Case ID H050805. Representing Republic Metropolitan LLC are attorneys from law firms specializing in real estate and contract law while legal counsel for Santa Clara includes municipal law experts defending procedural adherence.