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sr-082581-7fCA:RMM:BB:se City Council Meeting 8-25-81 STAFF REPORT TO• Mayor and City Council FROM: City Attorney AUG 2 5 1981 SUBJECT: Claim for ~?ested Right from Emergency Building Moratorium, Claim Number M-057, b_<<~ Santa Monica Employees Federal Credit Union To Remodel Existing Structures for Credit Union Offices at 3205 Santa Alonica Boulevard. PROJECT DESCRIPTION Claimant seeks to remodel a vacant structure at 3205 Santa Monica Boulevard, previously used for office for use by the Santa Aionica City Employees Credit Union. The cla m. «as filed because claimant seeks to convert a 4-car garage within the structure into office space. Parking spaces for 3 cars will be provi,?ed in front of the structure. The property is zoned C-4. It was purchased by claimant on May 19, 1981. VESTED RIGHT A determination of vested right depends on whether the claimant has secured the last governmental approval necessary for construction and, in good faith reliance thereon, performed substantial work or incurred substantial liabilities in further- ance thereof. In connection with this project, claimant did not obtain any of the necessary governmental approvals prior to the adoption of the moratorium. Since April 22, 1981 claimant has obtained an Santa Monica, California AUG ? 5 1981 exemption from Rent Control as non-residential rental property. ARB approval and a building permit will be necessary: No expenditures were made nor liabilites incurred prior to adoption of the moratcrium. Claimant does not have a vested right to proceed in that no governmental approvals were obtained prior to April 22, 1991 and no expenditures were made and liabilities incurred in reliance on such approvals prior to that date. unRnaurp According to claimant, it purchased the subject property and sold the structure currently occupied by the Credit Union under orders from the National Credit Union Administration. The reasons stated for the order concerned the building's size and cost - too much money was being spent on too large a building, and- the fact that the Credit Union was acting as a landlord with respect to the building, apparently an impermissible funr_tion. The subject property was purchased after the rent control exemption was granted. Claimant has also sold property it currently occupies. Since claimant cannot u£ilize .the entire structure without exemption from the moratorium, it continues to operate at its present location. It now pays $6000 monthly rent to the new owners of that property and, at the same time, makes mortgage payments for the subject property. According to claimant, delay in being able to move inter the new location will require continued monthly payments of rent and mortgage ,thereby potentially diluting c'_aimant's liquidity and -2- preventing funds now used for rental from being used to strengthen the financial position of the Credit Union. RECOMMENDATION 1. It is resne.^_tfully recommended that the claim for vested right be denied. Prior to April 22, 1981, claimant had not obtained the last necessary governmental approval and di~i not perform substantial work or incur substantial liabilites in reliance thereon. 2. If, under the fact as presented above or as may be determined at the ti*_*ie of the hearing, the City Council should determine that application of the moratorium to claimant's project wou13 result in an unfair hardship to claimant, an exemption on the basis of unfair hardship should be granted. -3-