Diners enjoy lunch next to the wave machine at Belmont Park's Wavehouse in Mission Beach
Diners enjoy lunch next to the wave machine at Belmont Park's Wavehouse in Mission Beach — Earnie Grafton

A long-running legal dispute between the city of San Diego and the former operators of Belmont Park in Mission Beach has apparently come to an end.

Just how the matter was settled, though, remains unclear, following an odd turn of events ending with the City Attorney's office on Friday withdrawing a news release boasting that the former operator had dropped his lawsuit. City Attorney Jan Goldsmith would only say that a new release would be issued early next week.

At issue was a suit filed in 2011 by businessman Tom Lochtefeld, who was seeking $25 million from the city following a rent dispute over the city-owned property that led him to file for bankruptcy.

Lochtefeld, who lost his rights to the property’s master lease in bankruptcy proceedings, accused the city of breach of contract and fraudulent misrepresentation for preventing him from a second major expansion of the park.

Belmont has since been taken over by Rancho Santa Fe-based Pacifica Enterprises, a real estate investment firm that teamed with the Pacific Beach company Eat.Drink.Sleep to transform the amusement park into a major retail, dining and entertainment destination. A new rooftop restaurant offering panoramic views of the ocean already opened earlier this year, and at least one more major dining venue is planned.

In a statement, Lochtefeld said he was unable to disclose the specific terms of the settlement agreement.

"My attorney and I, while we believed strongly in the merits of the claim against the city for its conduct, which we laid out in significant detail in the complaint we filed, determined that getting the matter resolved was in my long range interests," he said. "...The decision to settle had nothing to do with the merits of the case. The fact is, the city dodged a bullet based on outside factors."

Lochtefeld said he has emerged from Chapter 11 bankruptcy and intends to reimburse all of his creditors. He's also proceeding with the development of more of his signature Wave House attractions that simulate ocean waves. He recently opened one in Mallorca, Spain, and is planning three more in China, he said.

He was credited with overseeing the comeback of the beachfront park over the past decade, more than doubling the venue’s annual revenues to $21 million. He had hoped to develop a hotel and water attractions that he said would make the site more economically viable but claimed the city rejected those efforts.

While Lochtefeld took advantage of rent credits that kept his lease payments to $70,000 a year, he had amassed more than $17 million in debt as he spent about $6 million on improvements, including $2.8 million on two wave machines. Lochtefeld refused to pay the higher rent demanded by the city, the city declared him in default, and he filed for bankruptcy.