LA City Sued Over Canceling Permits For Mohamed Hadid Spec Mansion

Mohamed Hadid’s spec home in Beverly Hills, once the largest home ever permitted in Los Angeles, is in danger of losing its building permits, The Real Deal has learned.

A turnaround specialist has filed a lawsuit against the city of L.A., claiming that city authorities improperly canceled the building permits for the 37-acre, partially-built spec mansion, which Hadid once listed for $250 million.

The lawsuit, filed in L.A. Superior Court last month, relates to Hadid’s bankruptcy on the planned 78,000-square-foot development at 9650 Cedarbrook Drive. Hadid filed for bankruptcy on the site in August of 2022 and the property has since been listed for sale at $68 million.

In the complaint, J. Michael Issa at B Riley Financial, who was appointed by the court to manage Treetop Development — Hadid’s entity that owned the property — accused the city of taking back its word after providing assurances that the permits for the site were still active.

At the center of the dispute is an order from former Los Angeles Mayor Eric Garcetti issued in March 2020, at the start of the COVID-19 pandemic, pausing deadlines to act on entitlements.

Issa claimed that the order extended the validity of permit to March 1, 2023. According to the suit, with the city’s assurances, the estate took out millions in debtor-in-possession financing to perform “meaningful construction” to maintain the permits.

The city allegedly declared the permits as expired in July, claiming that Treetop’s permit expired three days before Garcetti’s order was issued. Before then, the city allegedly gave “repeated assurances,” and directed Treetop to perform construction work to keep the permits active.

The Los Angeles City Attorney’s Office did not respond to a request for comment.

“The city’s about-face on the permits was unexpected,” the complaint said. “If the city is allowed to expire the permits, it will strip the estate of its major asset at the expense of its creditors, primarily lenders and vendors who invested millions of dollars of cash and time based on the belief that the city was acting in good faith in their administration of the permits and the development process.”

Hadid’s Treetop bought the property in 2012, records show. It first surfaced on listing sites in 2017 with an astronomical and aspirational asking price of $250 million.

The planned structures in the complex include a 55,000-square-foot main house and a 23,000-square-foot guest house. Plans for the property also included a bowling alley, a 36-person home theater and a Turkish bath.