ITEM 1 - LEGAL PROCEEDINGS



In July 2003, a lawsuit was filed by four members of our Board of Directors
elected by holders of the Series A Preferred Stock against a director elected by
Warburg, Pincus Equity Partners, L.P., a significant holder of the Series B
Preferred Stock.  The lawsuit seeks a declaration that the plaintiff directors
are not required to vote with respect to a proposed redemption of the Series A
Preferred Stock in a manner that would be detrimental to the interests of
holders of Series A Preferred Stock and are entitled to vote in a manner that
reflects and supports those interests rather than prefer the interests of other
classes of Price Legacy's equity securities.  The plaintiff directors also seek
a declaration that their ownership of shares of Series A Preferred Stock does
not disqualify them from considering, voting or otherwise acting on matters
affecting the holders of Series A Preferred Stock, including the redemption of
that stock.  Price Legacy is not a party to the lawsuit.


On or about February 13, 2001, Lewis P. Geyser filed a lawsuit against Excel
Legacy in Santa Barbara County Superior Court, Anacapa Division, Case No.
01038577.  The suit arose out of an Operating Agreement for Destination
Villages, LLC, an entity which is owned jointly by Excel Legacy and Mr. Geyser,
under which Destination Villages, LLC would develop certain eco-tourism
resorts.  The complaint included causes of action for breach of contract, breach
of fiduciary duty, fraud and negligent misrepresentation.  The lawsuit included
a prayer for compensatory and punitive damages.  Excel Legacy had also filed a
cross-complaint against Mr. Geyser for breach of contract, fraud, breach of
fiduciary duty and other related claims.


The trial of this matter began February 26, 2002 and concluded on March 19,
2002.  The trial judge dismissed both the complaint and cross-complaint, and
granted nothing to Mr. Geyser under any of his allegations.  On June 5, 2002,
Mr. Geyser filed an appeal and Excel Legacy subsequently filed a cross-appeal
against Mr. Geyser.  On May 12, 2003, the appellate court reversed the judgment
of dismissal on the complaint and cross-complaint and remanded the case for
retrial.  The court has not yet set a date for the retrial of the matter.  We
believe that our positions have merit and intend to vigorously defend against
Mr. Geyser's claims and pursue our counterclaims.


On June 13, 2002, the Bank of NT Butterfield & Sons Limited filed a lawsuit
against Price Legacy and Excel Legacy in Bermuda for $6.1 million plus other
costs related to a guarantee agreement for a promissory note on the Destination
Villages Daniel's Head project in Bermuda.  The bank claims that Excel Legacy
did not provide sufficient capital for the project to be completed which was
required in the guarantee agreement.  The bank has currently appointed a
receiver who is actively marketing the project for sale to third parties.  We
believe we were in full compliance with the guarantee and intend to vigorously
defend the lawsuit.  On June 3, 2003,



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trial of this matter commenced in Bermuda.  On June 6, 2003,the trial was
temporarily suspended due to illness of counsel.  The matter is currently
expected to be reset by the court for November 2003.


We are not party to any other legal proceedings other than various claims and
lawsuits arising in the ordinary course of business that, in the opinion of our
management, are not individually or in the aggregate material to our business.