When Bob Faulis meets for lunch on May 4, he is a grateful man. It’s the national day of prayer, and hours earlier, Faulis emceed a prayer breakfast at Portola Hotel. While doing so, he made an announcement: Ruby Falls Fund, LLC, of which Faulis is a principal, prevailed in the state Court of Appeal in its litigation with Aqualegacy Development, LLC, over who the rightful owner is of the derelict property at 484 Cannery Row, which has sat vacant for decades. Of the roughly 180 people in attendance, he says, about 80 percent broke into applause upon hearing the news. “I was surprised at the number of the people that thanked me, and congratulated me,” Faulis says. “I’m trying to do something good for people.” In his view, Faulis has earned that goodwill through years of being active in the community—going to Monterey City Council meetings, attending beach cleanups, and being active in Monterey’s ministry of Christian Business Men’s Connection, which states on its website that its goal “is to connect businesses and the marketplace to Christ.” He adds, “I’m not just an out-of-town developer. It was really neat to see that people know me.” Faulis arrived in the area in 2018 from San Diego, the year after Ruby Falls acquired the property from the inelegantly named 2012 Canrow Owner, LLC. He quickly went about establishing relationships with local leaders, and evangelizing about the project the Monterey City Council approved in 2004 (with a slew of conditions), and that the California Coastal Commission approved in 2008 (with more conditions): A development that would bring 87,000 square feet of retail and restaurants, 38 market-rate condos, 13 workforce housing units and 377 parking spaces to the last vacant property on Cannery Row. The global recession that followed put the project on ice indefinitely, as funding was impossible to come by. The events that followed regarding ownership of the property are dizzying in their complexity. They centered around the fact that there are two deeds of trust on the property, and that the chain-of-title on the deed—who invested what, and how much of the property they owned—were incomplete. Aqualegacy bought the property in 2013, and was foreclosed on in 2014. In a foreclosure sale at the Castroville library, Medallion Servicing bought the property back on behalf of Canrow. In 2017, Canrow then sold the property to Ruby Falls, and ever since, there’s been litigation over who actually owns it, as Aqualegacy argued the foreclosure sale was unlawful due to improper procedure, among other things. Former Monterey County Superior Court Judge Lydia Villareal, now retired, issued a decision in 2021 granting Aqualegacy title to the property; Ruby Falls and Canrow appealed. On May 1, the state Court of Appeal overturned Villereal’s decision, giving title to the property back to Ruby Falls. The court ruled that Aqualegagy was not entitled to notice of the foreclosure sale, and also that it was not entitled to the $1.19 million in attorney’s fees it was awarded by Villareal. The case could possibly go to the state Supreme Court; Phil Taylor, Agualegacy’s principal, did not respond to requests for comment. So now that Ruby Falls has title to the property, what’s next? That’s not clear. Ruby Falls sued the Coastal Commission in January 2020 after the agency, in November 2019, didn’t extend the coastal development permit for the project due to changed circumstances—mainly, an increased understanding of climate change-induced sea level rise—since its original determination. That litigation was put on pause in 2021 until the litigation over ownership was sorted out. Now, barring a hearing before the state Supreme Court, that question appears to have been answered. Faulis believes that any permits granted are also put on pause—what’s called “tolling”—when a project is embroiled in litigation. (That’s been the case with the project’s permits with the city of Monterey, which have been continually renewed.) Aside from a deeper understanding of sea level rise, one more thing has changed since the project was approved that could potentially impact the Coastal Commission’s analysis: water supply. The approval of the expansion of Pure Water Monterey would theoretically provide enough water—pending approval from the state to lift a cease-and-desist order it imposed after Cal Am’s illegal overpumping of the Carmel River—to serve the project, now called Cannery Row Plaza, as well as any other local projects in the pipeline. Whether or not that water supply is explicitly available will be, for the time being, a determination made by California American Water, the private utility that delivers water to the Monterey Peninsula. As proposed, the Cannery Row Plaza project would include its own desalination component to provide water, something the Coastal Commission had many concerns about. Faulis hopes that with the approved expansion of Pure Water Monterey, there won’t be a need to include the desal component (eliminating it would cut costs considerably, and assuage many of the Coastal Commission’s concerns about the project; that said, it does not currently have a coastal development permit). From Faulis’ perspective, outside of the litigation with the Coastal Commission, the next steps are to raise money for the engineering designs of the project. Whether or not that includes the original plans for an onsite desalination plant remains to be seen. Faulis says that he and his partners are going to ask what investors want to see in the project, which could ultimately lead to an entirely new proposal altogether. That would be a heavy lift—it’s difficult to get any major project approved within the Coastal Commission’s jurisdiction, and having to reapply for a new permit would be costly and take years, even if it were successful. Despite what might be a tough road ahead, Faulis conveys gratitude, and a devotion for his vision for the long-derelict property. “I don’t want to see T-shirts and candy shops, I want to see something more invigorating to the street. Something educational,” he says, referring to the museum within the proposed Cannery Row Plaza plans. “Change is finally going to happen over all these years, and the change is hopefully going to be something the majority of people really enjoy, and really like.” Coast Clearing Hurdles remain in developing Cannery Row’s last vacant property—but now we know who owns it. By David Schmalz Bob Faulis by the Cannery Row property that once housed the San Xavier Cannery warehouse. Monterey City Council approved a mixed-use project on the waterfront property in 2004, but it remains undeveloped, caught in a web of lawsuits. One of those suits—about who owns the property—was resolved on May 1 in the Court of Appeal. news “I’m not just an outof-town developer.” Daniel Dreifuss 16 MONTEREY COUNTY WEEKLY may 11-17, 2023 www.montereycountyweekly.com
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