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There's already a hole in the ground where Taylor Farms is building a new headquarters in Oldtown Salinas, on a parcel the agribusiness giant bought from the city for $1.5 million.

Lucky for them, then, that Monterey County Superior Court Judge Kay Kingsley threw out a lawsuit against the city and former mayor Dennis Donohue last week, which alleged Donohue had been back-handedly negotiating with Taylor Farms CEO Bruce Taylor.

The lawsuit was filed in 2010 by would-be developers Bob and Curtis Leidig, a father-and-son whose Salinas Renaissance Partners had signed onto a contract with the city for a major downtown development proposal. The city backed out in 2009, and the Leidigs sued, arguing they'd already spent $2 million on plans and should've had first right of refusal.

In court papers, the developers alleged Donohue had hidden information from the public by exchanging emails to negotiate the Taylor Farms deal by using his business email address instead of his city email account.

On Dec. 7, Kingsley upheld the city's motion to dismiss the case, except for one of the Leidigs' requests, that the court issue an injunction to prevent Salinas from distributing any of the developer team's confidential information.

The Leidigs were not available for comment, but their attorney, Bob Rosenthal, says they're considering an appeal. "It was a surprise," Rosenthal says. "We're reviewing the court's decision."

Salinas City Attorney Vanessa Vallarta praised Kingsley's decision, and said it would enable the city to continue entering into potentially risky business agreements with the private sector while still preserving their ability to back out.

“The city and the mayor must be responsible stewards of public money, and they need to be able to make prudent decisions that they believe to be in the best interest of the city,” she said in a statement.