City of Los Angeles Faces Lawsuit for Angels Landing Project

UPDATED JANUARY 20, 2025 at 10: 30 AM:

Developer Don Peebles and partner Victor MacFarlane’s Angels Landing Partners has sued the City of Los Angeles for allegedly unlawfully terminating their contract to build the $1.6 billion Angels Landing project Downtown, which would have been among the largest African-American-led developments in the city’s history.

Peebles’ eponymous firm and MacFarlane Development Company are seeking $20 million they invested in the project when the city “abruptly and inexplicably terminated its agreement with Angels Landing without proper justification,” according to the complaint filed in L.A. Superior Court.

The Angels Landing team was selected by the city to develop the vacant site at 361 South Hill Street, between Hill and Olive streets and 4th and 5th streets, in the Bunker Hill neighborhood following a request for qualifications in April 2017.

The 1.9 million-square-foot DTLA mixed-use project was going to mark the Peebles Corporation’s foray into the L.A. market, the company’s CEO said. The firm is based in Miami, but has developed in New York and elsewhere.

Angels Landing called for two mixed-use buildings — one 850 feet tall and the other 600 feet tall — with hotel rooms, rental and condominium units, retail, restaurants, an elementary charter school and open space.

The city and the developers executed an exclusive negotiating agreement as of March 2018. It stipulated that the developers would be reimbursed by the city if the city terminated the agreement when the developers were not in default of their obligations, per the complaint.

Peebles and MacFarlane filed suit against their minority partner, Ricardo Pagan-led Claridge Properties, for failing to make an initial capital contribution of $184,951 in April 2021. The suit was resolved and dismissed in June 2023, with Claridge no longer maintaining a capital interest in Angels Landing.

But the city informed Angels Landing in July 2023 that Claridge’s transfer of interests to Peebles and MacFarlane “constituted an unauthorized ‘transfer,’ which would allow the city to terminate” the exclusive negotiating agreement. The city sent a second letter about the default in October 2023 calling the assignment an “unpermitted transfer.”

In February 2024, the city terminated the agreement with Angels Landing.

“The city tried to say it was a breach of our development agreement, which it was not,” Peebles told The Real Deal Wednesday. He added that they tried to “argue they had the right to terminate our agreement, which they did not.”

MacFarlane and the City Attorney did not respond to a request for comment. Pagan was not reachable.

Clarification: The previous version didn’t clearly identify the party that filed the lawsuit.