USC and the developer of a proposed mixed-use student housing development for the university’s students have filed a lawsuit against Conquest Student Housing.

The litigation is the result of a two-year campaign by Conquest to monopolize the student housing market around USC’s University Park Campus and its threats to attack competing development projects.

The lawsuit alleges a pattern of racketeering, abusive litigation, extortion, fraud and intimidation by Conquest officials who described themselves as the “Al-Qaeda” of USC student housing, even going so far as to state they know how to legally “bomb” competitive development projects.

Conquest officials have said they would do whatever it takes to prevent the construction of the University Gateway Project being developed by Urban Partners, LLC on land leased from the Shammas Family and USC.

The Gateway Project is an urban infill, mixed-use, transit-oriented development designed to increase the limited supply of suitable student housing at the juncture of Figueroa Street and Jefferson Boulevard.

“Conquest’s attempt to monopolize the USC student housing market through abusive litigation must be stopped. Conquest’s tactics of threats and intimidation, as outlined in the complaint we filed today, have the ultimate effect of increasing the cost of development and decreasing the supply of new apartments and condominiums available to residents of California,” said Matthew Burton, a principal of Urban Partners. “They are so intent on eliminating or preventing competition that they have said they are willing to spend more than a million dollars to stop a single project.”

Michael L. Jackson, vice president of student affairs, said, “Conquest’s destructive campaign has caused harm to USC and our students, who face a limited supply of area housing, by preventing the development of additional student housing near campus. Conquest’s anti-competitive and abusive conduct has also wasted the time and resources of public agencies and the courts.”

The lawsuit names Conquest, its principals Brian Chen and Alan Smolinisky and other Conquest agents as defendants and spells out a long list of tactics used to control the student housing market around USC and its attempt to stop the University Gateway Project and other student housing projects in the area, including:

• using unfounded environmental litigation to threaten another developer that had a site under contract for development of a student housing project near USC. In that case, a representative of Conquest said it should be thought of as “Al Qaeda” and that Conquest knows how to “bomb” competing development projects through litigation under the California Environmental Quality Act;

• interfering with a number of Urban Partners’ development projects in California and Washington, in which Conquest has no relevant interest, in retaliation for Urban Partners’ attempt to enter the USC student housing market;

• threatening to block or delay any of USC’s own future development plans if those plans include student housing;

• telling USC officials that it will do whatever it takes to prevent construction of the University Gateway Project, then boasting to others that Conquest is using the California Environmental Quality Act to oppose other projects involving Urban Partners in order to stifle competition and put pressure on Urban Partners to abandon the University Gateway Project;

• offering to pay a local resident in order to induce the resident to oppose an Urban Partners development;

• initiating numerous abusive challenges to the environmental impact report and entitlements granted by the City of Los Angeles on the University Gateway Project – all of which were rejected. Conquest subsequently sought to further delay the project by filing an additional round of appeals with the courts; and

• misrepresenting the scope and size of the University Gateway Project to area residents and others to incite artificial concern within the community. Conquest-sponsored advertising, Web site and other materials falsely stated that Urban Partners was planning to work with the City of Los Angeles to take homes through eminent domain, wrongly stated that the project had inadequate parking and made other false claims.

The lawsuit was filed in U.S. District Court, Central District of California by Steptoe & Johnson LLP, legal counsel for Urban Partners, USC and the University Gateway Project. It alleges Conquest has violated the Racketeer Influenced and Corrupt Organizations Act, the Sherman Act, the California Unfair Competition laws and other state and federal laws. The lawsuit requests a permanent injunction to prevent Conquest from continuing its illegal activities and asks for unspecified damages.

The eight-story University Gateway Project will be home to more than 1,600 students and will provide more than 11,000 square feet of student service facilities, including computer rooms, laundry facilities and exercise rooms. The 421-unit project also will contain 83,000 square feet of neighborhood-oriented retail, including a book store and restaurant.

It is designed to help increase the limited supply of student housing near USC and enjoys widespread support in the surrounding communities from a diverse roster of community groups and civic and elected leaders. The project will be built entirely with private money and will have no public subsidies.