Santa Ana Files Lawsuit Against Homeless Shelter Developer

SANTA ANA, CA — An attorney for a Newport Beach-based developer Tuesday said the company was "surprised and disappointed" that Santa Ana officials have sued the contractor on claims that it was shutting down a homeless shelter project to drive up the price for the work.

Santa Ana filed a lawsuit in federal court on Monday and is seeking a temporary restraining order to compel the developer, Dyer 18 LLC, to continue work on the homeless shelter at 1815 E. Carnegie Ave.

The developer is "surprised and disappointed by the city of Santa Ana's federal filings of March 21, 2022," attorney Cory Baskin said. "Dyer 18 is, and has always been, committed to assisting its Orange County municipal partners to address the significant homelessness crisis affecting our community and imperiling the lives and futures of our unhoused citizenry."

"The city of Santa Ana's court filings profoundly mischaracterizes the pertinent facts concerning Dyer 18's efforts to ensure completion of the 200-bed shelter at the 1815 E. Carnegie Ave. premises owned by Dyer 18. There is no basis, emergency or otherwise, for the relief requested by the city of Santa Ana.

"Dyer 18 has no intention of delaying the shelter's completion by ceasing construction. Regrettably, the city of Santa Ana has, quite literally, created a federal case out of ordinary construction budgeting communications occasioned by the city's own requested changes to the scope of the project."

Baskin added that the company "hopes and expects that this baseless suit will be swiftly and appropriately resolved by the court so that taxpayer money goes toward solving the homelessness crisis, rather than legal maneuvering."

The city has appealed to U.S. District Judge David O. Carter, who oversees a settlement with many Orange County cities to construct and maintain shelter for the county's transients.

City officials said the developer ceased construction in a "devious ploy to strip the city of the option to purchase the Carnegie property." They accused the company of "claiming without merit that the city has breached" its lease agreement with Dyer.

In a statement, officials said it was a move that appears "motivated by (the developer's) belief the Carnegie Property is now worth more than the purchase price agreed to with the city and a desire to delay the sale for tax purposes."

In federal court papers, the city argued that the project was nearly 90% complete and that the work stoppage was "retaliation" for a lawsuit it filed earlier this month in Orange County Superior Court.

City News Service