Buena Park buys back land where Butterfly Palladium never took flight

A fenced off dirt plot near Knott’s Berry Farm once promised to recreate a resplendent Costa Rican rainforest complete with butterflies as its main attraction. But after years of litigation over the highly anticipated Butterfly Palladium, Buena Park took the land back instead.

The Buena Park City Council unanimously approved the purchase for $9 million during its July 12 meeting and announced a clean slate for the 9-acre site along Beach Boulevard.

“This is day one of a new trajectory for this project,” Councilman Connor Traut said during the meeting. “The people of Buena Park have continued to see this property sitting there vacant as things have been battled out in court. It’s finally back in the city’s hands, the people’s hands.”

The Movieland Wax Museum and a Starbucks previously stood on the grounds until the former tourist attraction closed in 2005. The city’s redevelopment agency owned the site until 2012 when Gov. Jerry Brown dissolved all such programs across the state.

Buena Park finally sold the property to Rubin Stahl, developer of the Butterfly Palladium, in 2015 for $2.5 million. His previous projects included the Butterfly Wonderland in Scottsdale, Ariz., which bills itself as the largest pavilion of its kind across the nation.

Stahl hoped to create a similar experience in Buena Park. Construction began in 2017 on the attraction that was to feature a large butterfly atrium, jellyfish aquarium, 3-D theater, café and gift shop.

But the Butterfly Palladium missed key development benchmarks.

By 2019, the city lost confidence in the project, surmised that it was only 10% to 15% completed and rejected an 18-month extension requested by Stahl. Months later, Buena Park sued the developer alleging a breach of contract and called the plot of dirt mounds a “nuisance.”

The city also intended to buy the property back for its original $2.5 million selling price; Stahl’s attorneys at the time called the move a “land grab” with no basis in law since the “buy back” clause expired. They also claimed that Stahl had already poured $22.2 million into developing the site.

Buena Park City Council approved the purchase of the former Butterfly Palladium construction site during a July 12 meeting.

(Scott Smeltzer / Staff Photographer)

While the legal battle grew to include multiple parties who claimed an interest in the property, Proforma77 acquired the site in September 2019 at a foreclosure auction.

Stahl lost ownership and passed away the following year.

Litigation continued while Buena Park negotiated with Proforma77. The two reached an agreement on a $9-million “bargain sale transaction” with the company having estimated the unencumbered fair market value of the land at $24 million.

At council, the city looked forward to closing escrow by the end of July, leasing the land back to Proforma77 in the interim and ending the legal fight.

“The city’s role in the pending litigation will be rendered moot,” said Chris Cardinale, Buena Park’s city attorney, during the meeting.

But attorney Gary Carlin, who represents Lila Stahl, said that he’s been retained for future litigation as part of his services. Lila, who is president of Butterfly Palladium, has already put him in touch with witnesses who allege that Buena Park’s executive leadership didn’t allow the Stahls to succeed.

“The city manager and the city attorney at the time both said that they would see to it that Lila would be thrown into bankruptcy,” Carlin claimed. “They just didn’t trust her, her husband, or corporations that they owned.”

He also stated that the project was 40% complete at the time Buena Park rejected the extension.

Looking to move forward, the city will be issuing Request for Proposals in the coming days while an independent appraisal of the property by Proforma77 is also on track.

Where the company struggled to find interested developers to take on the site during the pandemic, the city is hoping to have better luck with adding a new attraction to its Entertainment Zone bookended on Beach Boulevard by Knott’s Berry Farm and the Source.

Buying the land back and ending the suit allows for such optimism to flutter again.

“Our motivation is to ensure that an appropriate type of entertainment venue is completed at this location as quickly as possible,” said Councilwoman Susan Sonne, who represents District 3 where the Butterfly Palladium was to be. “There’s more interest in development, overall. The time is now ripe for this.”

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