USC, developer sue student housing firm

USC joined in a federal lawsuit, filed Tuesday, that alleged a developer of off-campus student housing was trying to squelch competition with intimidation, extortion and fraud.

Conquest Student Housing, a firm that owns numerous apartments in the neighborhoods near USC, is illegally trying to stop construction of a rival’s project, University Gateway, that would house more than 1,600 students and include retail stores, a fitness center and a parking structure, according to the suit.

The complaint accused Conquest of using lawsuits to delay the project by two years and of inciting neighborhood opposition to University Gateway with a campaign of distortions. The suit also contends that Conquest has harassed the rival developer, Urban Partners, with unmerited challenges to unrelated projects throughout the state and the West.

A Conquest official allegedly described his firm as being like “Al Qaeda” and reportedly said that it “does not cost a lot to build a bomb and cause extensive damage” to a project, according to a declaration by another potential rival businessman that is included with the suit.

The case was filed by Urban Partners and by USC, which owns some of the land at Figueroa Street and Jefferson Boulevard where the University Gateway project, now estimated to cost at least $150 million, is slated to break ground next year.

Phone calls seeking comment from Conquest Student Housing officials, including Alan Smolinisky and Brian Chen, who were named as defendants, were not returned Tuesday. Jack Rubens, an attorney who has represented Conquest in actions involving University Gateway, declined to comment, saying that he had not seen the lawsuit yet.

Conquest officials in the past contended that University Gateway has too little parking and they admitted contributing to a website that urged opposition to Urban Partners’ plan.

Conquest’s website said the firm runs 19 buildings in the USC area with “upscale” apartments for 1,400 students. Last year, the company opened a high-profile complex, the Tuscany, which has apartments for 512 students, just across Figueroa Street from USC and a block from the University Gateway site.

The USC suit seeks an injunction against Conquest and its officials, as well as unspecified financial damages that could total “several millions,” said attorney Karl Tilleman of the Steptoe & Johnson firm, which is representing USC and Urban Partners in the case.

Michael L. Jackson, USC’s vice president for student affairs, said Tuesday that USC co-filed the suit because it wanted “a level playing field” for housing developers.

“It’s unfair for any entity to try to bully anybody so they can monopolize student housing,” he said, adding that the school and neighborhood need more student housing, whether built by USC or by private firms. He described Conquest’s Tuscany as a welcome addition to the area.

Matthew Burton, a principal of Urban Partners, said he thought that there was plenty of demand for student housing near USC to support “friendly competition” but that Conquest had crossed the line into illegal tactics that are restricting the supply of new residences.

larry.gordon@latimes.com