Costa Mesa and New Harbor Inn agree to settle their legal battle

The city of Costa Mesa and the owners of the New Harbor Inn have reached a truce in a legal battle that lasted more than a year.

During a closed session Tuesday, the Costa Mesa City Council voted unanimously to settle two cases related to the 32-room motel at 2205 Harbor Blvd., which the city had labeled a public nuisance and the owners had alleged was a victim of discrimination.

“No money will be paid by either party — no attorney’s fees,” City Attorney Tom Duarte said. “Each side will bear their own costs.”

Under the settlement, both sides will dismiss their cases against each other, said attorney Frank Weiser, who is representing New Harbor Inn owners Ming Cheng Chen and Hsiang Chu Shih Chen.

“We settled on what we believe are very favorable terms,” he said. “I think the city has come to a good agreement here and we appreciate the fact that the city attorney worked with us.”

The courtroom clash began in April 2016, when the city filed a public-nuisance complaint seeking an Orange County Superior Court ruling either halting the motel’s operation, appointing a receiver to take over its management or requiring its owners to address security and operations issues identified by the city.

A city news release announcing the action alleged the New Harbor Inn was a “known locale for drug storage and sales” and “the source for a disproportionate amount of police calls.”

City inspections, the release stated, had turned up multiple code infractions, “including substandard property maintenance and health, life and safety violations.”

In response, the Chens filed a lawsuit in U.S. District Court in September, alleging the city had discriminated against them and their tenants.

Efforts to close the motel, the Chens alleged, violated their civil and constitutional rights and were indicative of a “systematic policy, custom and practice” by the city aimed at forcing the motel out of business “to drive down the value of the property for eventual transfer to private developers.”

That suit also alleged that Costa Mesa police officers had entered private areas of the motel without notice, consent, a warrant or a court order.

The New Harbor Inn has remained open throughout the litigation.

Weiser said the Chens “are very pleased” with the settlement agreement and that the pact demonstrates his clients “want to work with the city to alleviate any type of concerns that they might have had.”

“I think we could have come to some kind of an agreement prior to any filing of litigation,” Weiser said. “But be that as it may, it turned out OK.”

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