Judge Rules Against Kilroy REIT

LOS ANGELES, CA-Los Angeles Superior Court Judge David Yaffe ruled in favor of Thomas Properties of Los Angeles and against Los Angeles-based Kilroy Realty Corp. last week in the latest round in the long-running legal and political battle over a proposed Thomas development in El Segundo, Calif.

Yaffe denied Kilroy’s petition to halt the proposed Thomas project, a 46-acre development of up to 2 million sf of office space and 500,000 sf of retail, restaurants, industrial and hotel space on Sepulveda Boulevard, just south of Los Angeles International Airport.

The judge also ordered Kilroy to pay the court costs incurred by Corporate Campus developer Thomas Properties Group, the city of El Segundo as well as the site’s owner, Federal Express Corp.

Kilroy, which formerly was based in El Segundo but has since moved to West Los Angeles, filed suit to block the project under the California Environmental Quality Act. It challenged the environmental impact report for the Thomas project and claimed that El Segundo officials violated environmental law when they approved the EIR.

Neither Thomas nor Kilroy could be reached for comment Friday, but both companies have indicated to GlobeSt.com in the past that they would likely appeal any court decisions they lost until they have exhausted appeals.

Kilroy’s legal challenge was running concurrently earlier this year with a city-wide referendum in El Segundo in which Thomas lobbied for voters to approve its project while Kilroy lobbed for voters to reject it. The city’s voters approved the project by a 2-1 margin in June, with both Thomas and Kilroy spending hundreds of thousands of dollars in the campaign.

The Thomas project would be developed on a former Rockwell aerospace site, now owned by Federal Express. The company’s hope is to acquire the land from Federal Express if it resolves the battle with Kilroy.