sr-092281-5bCA:RMM:BB:se
City Council Meeting 9-15-81
Santa Monica, California
STAFF REPORT
SEP 2 2 1989
TO: Mayor and City Council
FROM: City Attorney
SUBJECT: Claim for Vested Rights from Emergency Building
Moratorium, Claim Number M-07~, by Harris Toibb to
Construct 30 Condominiums and 10 Rental Units at
1034-1050 4th Street.
PROJECT DESCRIPTION
Claimant seeks to proceed with the demolition of ten rental
units at 1034-1050 4th .Street and the construction of a 6 story,
30 unit condominium project and a 10 unit apartment building,
affordable to persons and families of low moderate income, on
that site. Although claimant, in his application, speaks in
detail of a 6th Street site and its connection with the proposed
development, it is not part of this claim and neither affects nor
is affected by the Council's determination of this. claim. A
removal permit application has been filed for that property and
will be heard in October by the Rent Control Board.
The property is zoned R-4 and was purchased by claimant in
September 1976.
VESTED RIGHT
A determination
claimant has secured th
construction and, in
substantial work or
furtherance thereof.
of a vested
e last gover
good faith
incurred
1
right depends on whether the
nmental approval necessary for
reliance thereon, performed
substantial liabilities in
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SEP 2 2 9981 SEP ~ 1981
1. Governmental Approvals
In connection with this project, claimant obtained the
following approvals prior to April 22, 1981:
Tentative Tract Map
- extension granted
- extension granted
ARB Approval
Rent Control Board
Approval (Category 3)
9/18/78
9/17/79
9/15/80
9/20/78
4/09/81
Claimant obtained a tentative tract map, and subsequent
extensions for the construction of a 42 unit condominium project
on the subject site. Following the adoption of Rent Control,
claimant submitted a claim for vested rights and various removal
permit applications to the Rent Control Board, which were denied.
1/ On April 9, 1981, the Rent Control Board granted a Category
III removal permit to claimant which would permit him to demolish
the existing units are built on that location, in accordance with
several conditions imposed by the Board, 30 condominiums and 10
rental units.
It has heretofore been the position of the City Attorney
that the change from the 42 unit condominium project to the 30
condominium, 10 rental unit project is, in effect a new project
requiring a new tract map and not merely a modication to the
existing map. Even without this issue, claimant would not be
1/ It should be noted that following denial of claimant's
applicationu,litigation was commenced against the City and the
Rent Control Board and has proceeded through a trial and the
filing of a second lawsuit. There is yet no final judgment in
either.
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entitled to a vested right, in any event, since he did not posses
the last necesssary governmental approval to proceed prior to
April 22, 1981 and still needed to obtain Coastal Commission
approval, final map, demolition and building permits.
2. Expenses and Liabilities
Claimant has not indicated a total cost of development
stating that he is "unable to price out the project because of
circumstances set forth in this application."
Expenditures and liabilities to date are listed on Addendum
2, pages 20 and 21. As stated earlier the 6th Street property is
not part of this claim, and while its purchase and subsequent
costs, may be related to claimant's desire to construct
condominiums on the 4th Street property, those costs have no
bearing on the vested right question. Similarly, the costs of
operating the rental units as rental units and the costs of
seeking approval from the Rent Control Board do not count towards
establishing a vested right to proceed.
The remaining expenditures and liabilities apgear to be in
the following categories:
Pre-tentative tract map
- Land acquisition
- Architect and Engineering Costs
Refinancing of property
Unspecified costs
Post-moratorium
- Permit fees
$400,000
$ 78,559
$320,000
$ 9,610
$ 630
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- Landscaping plans $ 6,900
- Architectural fees $ 65,000
In addition, claimant has noted a cost of $200,000 in
management fees and $125,000 in legal fees and costs accrued.
The nature and timing of these costs is not otherwise explained.
None of the costs are in reliance on the last governmental
approval, nor the type that would establish a vested right. Land
acquisition and related maintenance expenses would not count
towards a vested right. Architectural fees were incurred either
prior to and in anticipation of even the first governmental
approvals or after the adoption of the moratorium and therefore
would not count toward a vested right.
HARDSHIP
Claimant explains the history of this project and the
financial hardship he faces on pages 9 through 19 of the claim,
extensively detailing what he considers "an unfortunate
combination of bad luck, bad timing and bad advice from [his]
advisor."
Claimant indicates that although the property was purchased
in 1976, disputes with the seller and a divorce proceeding in
1978 delayed. active pursuance of his tract map until 1979.
Thereafter Rent Control was adopted and affected his plans.
His dealings with the Rent Control Board, apparently through an
advisor, are explained. Proceedings with the Rent Control Board
continued through several applications, appear to have lasted more
than a year, and despite the Board's approval of the "30/10
plan", culminated in litigation which is ongoing. According to
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claimant, as a dart of his dealings with the Rent Control Board
he also purchased an additional property on 6th Street to provide
off-site replacement housing to meet Coastal Commission and
perceived Rent Control Board requirements. As the claimant
learned at some point, those perceptions were incorrect in that
off-site replacement housing was not permitted by the Rent
Control Board and as claimant deems it, his 6th Street property
purchase was "unnecessary." A hearing on a removal permit
application for that site is pending.
As further support for his hardship exemption, claimant has
also submitted on pages 11-31 a partial transcript of his
appearance before the Residential Task Force and supportive
statements of members of that Task Force.
Finally, as claimant notes, it has been the position of the
City Attorney that the proposed "30/10 plan" represents a project
significantly different than that approved in the tentative tract
map, which is prohibited by the moratorium and the ordinance
lifting the moratorium. It is claimant's position that the
project should be regarded as only a modification of an existing
map .
RECOMMENDATION
1. It is respectfully recommended that the claim for
vested rights be denied. Prior to April 22, 1981 claimant did
not obtain the last necessary governmental approval and did not
incur substantial expenditures and liabilities in reliance
thereon.
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2. If the Council accepts the position of the City
Attorney that his project constitutes a new project and requires
a new tract map, it is recommended that the hardship exemption be
denied since the project could not proceed. Otherwise, if it is
determined that this project is a modification of an existing
map, and if, under the facts as presented above or as may be
determined at the time of hearing, the City Council should
determine that application of the moratorium to claimant's
project would result in an unfair hardship to claimant, an
exemption on the basis of unfair hardship should be granted.
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T0: The Honorable Mayor and City Council
Members of the City of Santa Monica
RE: Claim No. M-071
Reconsideration of Application of
:Iarris Toibb for Determination of
(1) Hardship, (2) Vested Rights,
and (3) Exemption.
DATE: October 19, 1981
Prompted by my discussions with certain Council Members
and the City Attorney, I wish to further supplement my
Application for a Hardship Determination, etc. In order
that the 4th Street property proposal be more attractive to
the City Council, I have been strongly urged to include 6th
Street as part of the project.
Accordingly, I now propose to provide greater assurance
the 6th Street Apartment Building is constructed ( at my risk
of losing the property). I am making the following changes to
my .October 9, 1981 Memorandum:
1. I will include 6th Street as part of the 4th
Street project. Thus, I will provide to the
City 23 apartment units, which will:
a. Constitute 85% of the 27 condominium
units;
b. Add 8 new units to the City not part of ~~
OOT 2 7 79$1
my previous proposal;
°'~.~
c. Constitute 460 of the 50 units proposed
for the 4th Street and 6th Street sites;
d. The 8 units on 6th Street will constitute
an increase of 2670 over the existing 3
units.
2. The 23 apartment units will be provided in two phases:
a. Phase 1 - I will immediately build 15
new units, as part of the 4th Street
Inclusionary Building; and
b. Phase 2 - An additional 8 units will be
constructed, or I will dedicate the 6th
Street property to the City.
In particular, I propose the following revisions and
clarifications:
SIXTfi STREET PROPERTY
1. Eight Apartment Units. There will be 8 apartment
units comprised as follows:
a. 2 two-bedroom units [in my prior proposal,
all 8 units were one-bedroom, and no two-
bedroom units were included for low
income-rent levels];
b. 6 one-bedroom units;
c. Three units (1 two-bedroom and 2 one-bedroom)
will have rents set to be affordable to low
income persons; and
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d. The five remaining units will have rents
set to be affordable to moderate income
persons.
2. Phase 2 of the 4th Street Project. I will include
8 apartment units on 6th Street as part of the 4th Street
project:
a. I will designate 6th Street as a site for 8
low- and moderate-income housing units, by
.way of deed-restriction;
b. The 8 units will be built as Phase 2 of
the 4th Street project (within 5 years).
3. Five Year Building Limit.
a. I will. agree that within five years from
"breaking ground" on the fully approved
4th Street project, one of the following
will occur:
(1) I will cause the demolition of the
existing 3 units, and construction
of the 8 new units;
(2) OR a third-party will build the 8
apartment units; or
(3) If construction or "breaking ground"
for the 8 units has not occurred by
the end of the fifth year, I will
dedicate title to 6th Street to the
City.
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b. Regarding the 8 apartment units:
(1) All 8 units will not be exempt .from
the provisions of Section 1801 (c) of
The Rent Control .Charter Amendment;
(2) The development will contain 100%
low or moderate income units, and
thus will contain far in excess of
the 25% low or moderate income units
referred to in Section 3B of the
Moratorium Ordinance No. 1205, and
the 25% standard referred to in the
State Density Bonus Act [Section 65916
of the Government Code];
(3) Construction of the units will commence
within 180 days of the date of demolition
of the existing units;
(4) Existing. tenants shall have a right
of first .refusal for the new units.
c. In return for my commitment of these additional
8 units, the City agrees that:
(1) All necessary. and appropriate variances,
density bonuses, Coastal approvals,
Removal Permits, demolition and building
permits, and other permits and approvals
are issued by the City for 4th Street and
6th Street;
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(2) During the five year period. of Phase 2,
I may sell the 6th Street property;
however,. the buyer will be obligated
to cause the 8 apartment units to be
built on 6th Street as provided above;
(3) I will receive credit for 8 low and
moderate .replacement units (8 Develop-
ment Credits) should I cause the 8
units to be built. Likewise, 8
Development Credits will be credited
and transferred to any third party
purchaser of 6th Street, towards any
requirement for the buyer to supply low
and .moderate income replacement housing
for the City;
(4) The City will exempt 6th Street from any
ordinance, fee or requirement that would
create an indirect expense in the cost
of this housing development (pursuant to
Government Code X65916, and other
applicable law),
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FOURTH STREET PROJECT
Regarding the 15 apartment units in the Inclusionary
Building:
a. 5 units will have rents set to be affordable for low
(1 two-bedroom unit and 4 one-bedroom units);
b. 10 units will have rents set to be affordable for
moderate income persons (2 two-bedroom units and
8 one-bedroom units).
Respectfully submitted,
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~~,~ r~~~
H RRIS TOIBB
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