The owners of a former nursery in downtown Larkspur have filed a lawsuit seeking to end their nearly 13-year relationship with a Walnut Creek developer, a move that throws long-standing plans to build 85 residences at the site into limbo.

Attorneys for Irving Group, which represents the Niven Nursery site owners, filed the complaint against developer Larkspur Housing Partners on Aug. 11 in Marin County Superior Court. "For sale" signs went up at the property, also known as the Rose Garden site, earlier this month, a real estate agent said.

The lawsuit alleges that Larkspur Housing Partners failed to make good on its purchase agreement, which has gone through various revisions since 1997, thus voiding the contract. Larkspur Housing denies the allegations but hasn't filed a response yet.

Because Larkspur Housing Partners failed to close escrow by a July 1 deadline, "any and all rights formerly held by defendant LHP under the Former Sale Contract expired and terminated," the complaint states.

Since the contract expired, Larkspur Housing has interfered with the owners' attempts to sell the 16.8-acre property to a third party by refusing to complete official paperwork publicly voiding the relationship, the lawsuit says.

It also said Larkspur Housing "has falsely represented to the public, including potential third party buyers, that it holds a valid interest in the property."

In an e-mail to the Independent Journal, Irving Group attorney William Norman described


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Larkspur Housing Partners as "out for good" as a prospective buyer and developer of the property, situated along Doherty Drive.

Anton Qiu, a senior vice president at TRI Commercial in San Francisco, said the owners have retained his company to sell the property, and "for sale" signs went up about two weeks ago. Qiu declined to comment further because of the sensitivity of the proceedings.

Irving Group manager Cynthia Niven also declined to comment.

But Steve Seely, of Larkspur Housing Partners, said he still hopes to close escrow on the Rose Garden property by the end of September.

"We hope to resolve our differences," Seely said, declining to comment further.

Meanwhile, Larkspur city officials are still trying to determine whether all of the rights to the development plan would transfer to a new developer, City Manager Dan Schwarz said.

"We've been asked by the property owner ... to assess what elements of the development project to date travel with the property and what, if anything, is owned by Larkspur Housing Partners," Schwarz said. "We're in the midst of that, and I won't have a definitive answer ... for another few days."

Most of the permits already granted should travel with the property so long as there aren't major changes, he added.

Irving Group attorney Norman added that while the matter is "under discussion, and the answers are no doubt compound in nature ... we are absolutely confident that our new buyer will successfully complete the project to the benefit of the Larkspur community."

Earlier this year, the City Council adopted a development agreement with Larkspur Housing Partners for the project, which includes 29 single-family homes, six affordable cottages and 50 condominiums for seniors, as well as a large public space and creek restoration.

The site is part of the Central Larkspur Specific Plan, or CLASP -- the downtown development plan approved in 2006 after years of debate.

Councilman Larry Chu expressed frustration at news the entire project may now be on hold.

"It's kind of disappointing all this blowing up at the 11th hour -- something that's been going on for 12 years," Chu said.

Read more Larkspur stories at the IJ's Larkspur, Corte Madera section.

Contact Jessica Bernstein-Wax at jbernstein-wax@marinij.com

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