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Claremont Colleges win in court, CST has until March to appeal effort

by Mick Rhodes | mickrhodes@claremont-courier.com

A Los Angeles Superior Court judge has upheld the terms of a 1957 agreement between the Claremont Colleges and Claremont School of Theology, clearing the way for a possible sale back to the Colleges.

Judge Peter A. Hernandez ruled on January 7 the terms of the 65-year-old purchase agreement is “valid and enforceable equitable servitudes binding the approximately 16.4-acre campus property described in the 1957 Deed.”

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As the COURIER reported in detail in October 2021, on June 5, 1957, the Claremont Colleges sold the Village-adjacent parcel for $107,500 to the Southern California School of Theology (soon to be known as the Claremont School of Theology). The agreement contains a “first offer clause” that would, under the right set of circumstances, allow TCC to buy back the land for about $4 million, a fraction of its current market value.

Judge Hernandez said in his decision the first offer clause of the agreement provides “[t]hat if [CST] or its assigns or successors in interest desire to sell or transfer the said real property or any portion thereof, or if [CST] does not within three years from the date of this Deed establish upon the said real property its headquarters and reasonably develop the said real property as its principal establishment and headquarters, or if [CST] should cease to exist, or if [CST] should cease to use the said real property as its principal place of carrying on its activities, then the [Subject Property] shall be offered for sale to [Consortium] upon the terms and conditions provided in [the 1957 Agreement].”

The Claremont School of Theology has until March to appeal the decision.

On January 6, The Claremont Colleges released a statement that read in part, “The litigation has been complex and taken several years, but TCC is the prevailing party.”

Claremont Colleges Services CEO Stig Lanesskog declined to comment for this story, but Director of Communications Laura Muna-Landa said, “Our statement reflects our position and we have nothing further to add at this time.”

But CST isn’t ready to quit just yet.

Though CST President Jeffrey Kuan also declined to comment for this story, Executive Vice President for Operations, Communications and Advancement Steve Horswill-Johnston had this to say on the ruling:

“At this time, we don’t have anything further to comment on other than the school leadership is considering appealing the decision or taking advantage of arbitration that the 1957 agreement offers us,” Horswill-Johnston said in an email to the COURIER. “Our goal remains trying to get an equitable price for the property and we hope to to work with TCC to make that happen. We have until March to make a decision about the appeal.”

According to TCC, Judge Hernandez’s ruling settles several issues, including: the original 1957 agreement between TCC and CST is enforceable as originally written; the Right of First Offer created in the 1957 agreement has been triggered; CST must promptly give TCC an offer to sell the property in accordance with the Right of First Offer, including the pricing formula prescribed by that right; CST is prohibited from seeking to lease, sell or transfer the property to any third parties, including Yalong Investment Group, LLC; Yalong is prohibited from using, occupying, or possessing any part of the property.

“Yes, we agree that is a correct reading of the decision,” Horswill-Johnston said of TCC’s interpretation of the ruling. “I’d like to say more, but not at this time.”

Asked if TCC’s assertion that “CST entered into a sale/lease agreement with Yalong, a developer/operator/tenant to operate and develop the property. Yalong has paid CST more than $10 million in connection with that agreement,” Horswill-Johnston again demurred. “I prefer not to comment,” he said. “Again, I hope to have something to report to you in the coming weeks.”

The legal wrangling between CST and TCC has been ongoing since 2015, when the school sent a letter notifying the Claremont Colleges it intended to sell the property. There have since been several rounds of court rulings and appeals, but Judge Hernandez’s could be the last.

Go to claremont-courier.com to read Judge Hernandez’s entire January 7 decision and preliminary injunction, as well as the full statement and FAQs from TCC. Click on https://claremont-courier.com/schools/tcc-vs-cst-a-deal-gone-sour-46608/ for a link to the original 1957 agreement between TCC and CST.

 

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