A judge has dismissed most of the claims against the city of Los Angeles that formed part of a lawsuit by two business lessees within the L.A. Grand Hotel Downtown whose owners were critical of its temporary conversion into a homeless shelter during the pandemic.
The Los Angeles Superior Court lawsuit was filed by the nonprofit Academy of Media Arts as well as the ROME Nightclub. Both leased portions of the hotel and allege that the city paid the building’s owner more than $54 million as part of Project Roomkey while extending the time the shelter operated well beyond the promise of a temporary usage.
The academy owners contended that students encountered unsafe and unsanitary conditions because of the homeless, while the nightclub proprietors maintained that the Project Roomkey program prevented the business from opening. The hotel has not been used as a homeless shelter since July 2024.
On Friday, Judge Nicholas Daum dismissed all but the inverse condemnation claim that targeted the city. He dismissed the other causes of action against Los Angeles, which consisted of public and private nuisance, maintaining a drug-related nuisance, dangerous condition of public property, waste of public funds, failure to discharge a mandatory duty and civil rights violations.
“Plaintiffs cannot pursue a claim for waste of public funds against the city for past conduct because no meaningful injunctive relief is possible as a matter of law and disgorgement of misspent funds must be sought against the recipient, not the city,” the judge wrote.
Some of the plaintiffs’ claims are barred by government immunity, according to the judge.
Project Roomkey was a coordinated effort to secure hotel and motel rooms in Los Angeles County as temporary shelters for people experiencing homelessness who had a high potential for hospitalization if they contracted the coronavirus.
In a separate lawsuit, the hotel’s owners Sun & Sky LLC maintain that only the academy’s breach of contract suit should proceed to trial. The lawyers contend that the negligence and the intentional interference with prospective economic advantage/contractual relations allegations should be dismissed because they overlap with the breach-of-contract allegation.
But in their opposition to the hotel owner’s motion, the plaintiff’s attorneys contend that the harm to their clients after the hotel was opened to Project Roomkey was “immediate and concrete” and that students complained of fear and discomfort. Families withdrew or declined enrollment and the academy suffered reputational harm, disruption costs, staffing burdens, regulatory exposure and operational instability, according to the school’s lawyers pleadings.
The Sun & Sky motion improperly asks the court to reduce a school-safety and property-management case to an “ordinary commercial lease dispute,” according to the academy’s attorneys’ court papers.
A hearing on the Sun & Sky motion is scheduled for April 2.