A long-awaited legal decision on the dilapidated historic La Jolla Cove cottages could be La Jolla’s sweetest Valentine’s Day gift ever. A jury trial is called for Feb. 23 in Superior Court, Central Division to resolve a contractual-interference suit filed in September 2014 by a scorned potential buyer of the property.
The Red Rest and Red Roost — located at 1187 and 1179 Coast Boulevard — were built in 1894 for George J. Leovy and Dr. Joseph E. Fishburn, respectively. Also known as the Neptune and Cove Tea Room cottages, they are believed to be La Jolla’s oldest still-standing structures. But most current residents have only known them as eyesores, a visual accompaniment to the fecal stink wafting from the bevy of sea lions perched along the shoreline cliffs nearby.
In 1967, the cottages were purchased by the hotel next door (then known as La Jolla Cove Motel and Hotel Apartments and today as La Jolla Cove Hotel & Suites). New owner Jack Heimburge, a low-key boot shop magnate, intended to raze the bungalows and build an apartment complex. However, in March 1976, his demolition plans were thwarted when the cottages were designated historic landmarks on the National Register of Historic Places — a designation later also made on the State of California Register.
According to a source close to the case, who spoke to the Light only on condition of anonymity, family members blame a lack of funds to properly deal with the cottages, which were fenced off and tarped. Most community members, however, saw a clear case of strategic neglect. Denied permission to develop as he wished, Heimburge performed zero maintenance on them, which strongly suggested the hope that they would achieve a state of disrepair revolting enough for the City to demand their demolition. To the City’s credit, however, that never occurred — despite a series of mysterious arson fires and cinder blocks thrown through the cottages’ roofs over the years.
After Heimburge died in 1998, according to the Light’s source, his real-estate holdings were divided 50/50 between family member Krista Baroudi and Heimburge’s children. But disagreements between the parties, the source said, led Heimburge’s children to sell their 50 percent of the hotel and cottages in 2014 to a Denver-based real-estate company, Aimco, which owns 2,500 San Diego apartment units. Baroudi then exercised a right of first refusal to buy the Heimburges’ interests, the source said, and entered into a $60 million contract to sell the whole enchilada to La Jolla Cove Shops, an LLC owned by Brian Veit, Peter Boermeester, Terry Arnett, Melody and David Abeles, Rafael and Karla Galicot, Gregario Galicot and Leonardo Simpser.
The current lawsuit, filed by La Jolla Cove Shops, alleges that Aimco previously sued to prevent the Heimburges from selling to Baroudi, and that — after a court rejected the suit — Aimco then sent a letter to the escrow company threatening to unwind the sale. This ultimately prevented Baroudi from honoring her contract. Thus, Shops’ lawsuit claims, Aimco “acted wrongfully … to interfere with the performance of the superior contractual rights of others.”
In October 2014, the Heimburges completed their sale to Aimco, followed in December of that year by Baroudi. But the reason the Red Roost and Red Rest continue to languish in disrepair is an injunction issued prohibiting any redevelopment of the property, including the cottages, until the case is decided.
Various plans for the site came and went over the years. One was to renovate and move the cottages forward on the property and build a three-story boutique hotel behind them. But that would have required cantilevering the hotel and building it into the hillside, which scared off development partners. Aimco has its own plans, which it says it is eager to implement as soon as the current legal web is untangled.
“Our plans would honor the historic features and significance of the structures,” Aimco spokesperson Cindy Lempke wrote in an e-mail to the Light. “Aimco representatives have spoken to members of the community and to the La Jolla Historical Society (LJHS) and we understand the historical importance of these structures.”
Heath Fox, LJHS executive director, said he takes Aimco at its word. “Since I first contacted them, they’ve been very cordial and understanding and very cooperative,” he said. The Historical Society — along with San Diego’s Save Our Heritage Organisation (SOHO) — has been advocating for this restoration for decades.
Each cottage would need to be either restored or reconstructed, according to Secretary of the Interior standards: “as it appeared at a particular period of time by means of the removal of features from other periods in its history and reconstruction of missing features from the restoration period.” This would be an expensive process that could — depending on the state of rot and mold — necessitate replacing most of the structures, according to Fox. However, that money could be recouped by Aimco via booking fees for the cottages, which both could be modernized internally.
“They can be very valuable in terms of rental properties,” Fox said. “The cottages could be a wonderful property for visitors to stay in and for the community.”
So there is finally light at the end of this 40-year-long tunnel. But how much longer could the plaintiff’s quest for damages, and subsequent appeals, potentially drag on? The litigation is in its third year, has already been to the court of appeals once, and failed at the mediation table.
“There’s no way to tell,” the Light’s source said. “But some decisions will flow out of there.”
Cross those fingers, La Jolla.