sr-091581-7l~-~
DATE: September 15, 1981
TO: Mayor and City Council
FROM: Raymond F. Correio, Hearing Examiner
SUBJECT: Supplemental Report, Claim for Vested Right No. M-069
Dave Bentz, Claimant. Property location:
2416 34th Street
BACKGROUND
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Claimant filed his claim for vested right on August 20, 1981.
On September 11, 1981, a hearing was held at the City Attorney's
Of`_ice. Claimant and his wife appeared at the hearing. Claimant
testified under oath.
PROPERTY ACQUISITION AND FINANCING
Claimant opened escrow on November 10, 1979. Escrow closed
and a deed on the property was recorded on January 10, 1980. The
property was purchased from Cora Fitzgerald.
The purchase price of the property was $160,000 plus $373.10
in closing costs. There is no financing on the property as claimant
purchased the property outright.
Dave Bentz Enterprises, Incorporated which consists of claimant
and his wife is the owner of record of the property.
The single family dwelling which existed on the property when
it was purchased was demolished in January 1980.
GOVERNMENTAL APPROVALS
Claimant has received the following governmental approvals
which are listed in chronological order:
Demolition Permit
12/28/79
Architectural Review Board 12/3/80
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Tentative Tract Map 4/7/80
Building Permit 3/20/81
Final Tract Map 4/3/81
Claimant placed particular emphasis on the soil report which was
attached to his vested right claim. Due to the nature
of the subsurface conditions existing on the property, the report
makes specific recommendations as to the time when foundation work --
should begin.
We believe that there could be a considerable
amount of water percolating into the site
during the excavation of the fill and topsoil
layers. It will be very difficult to control
the inflow, therefore, the foundation work
should be started late in the summer and
completed just prior to the onset of the
winter rains.
Claimant testified that he delayed commencement of construction in
order to conform to the recommendations set forth in the soils
report. He stated that he obtained his building permit on March 20,
1981 so that he could commence construction during the summer months
before the 1981 rainy season would begin.
However, it should be noted that the soil report referred to
by claimant is dated April 11, 1980. In addition, by April of 1980,
claimant possessed completed plans for construction of the project.
Claimant did not submit his plans for plan check until
September 22, 1980, five months after the soil report was completed..
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Claimant stated that he proceeded in an expeditious manner at all
times in preparing for actual construction. However, it appears from
the listing of work and related expenditures set forth in Section IX
o.`_ his claim that claimant may have been able to commence
construction in the summer of 1980.
EXPENDITURES
Excluding the $163,000 purchase price of the property,
claimant lists expenditures of $35,455 related to demolition costs,
plans, permits and related fees, engineering costs, and a temporary
power pole. Claimant has provided supporting documentation for
these expenditures.
COST OF DEVELOPbiEN^1
Claimant lists the cost of development as $710,000 which he
stated included the cost of property acquisition. Based on the
proposed construction of six condominium units, the cost per unit
would be approximately $118,000. Claimant testified that he
anticipated a per unit sales price of approximately $125,000 to
$140,000.
t4ith respect to the feasibility of inclusion of low/moderate
income housing, claimant stated that it would not be feasible based
on project cost and anticipated profit factor.
In response to a question as to the source of construction
financing, claimant testified that he had made arrangements to
borrow $500,000 from a pension fund. Further questioning by the
hearing examiner led to claimant's admission that the pension fund
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was his own under Dave Bentz, Incorporated. He stated that he is the
trustee for his own pension fund.
Claimant stated that the $500,000 loan would be for a two-year
period with a 20o interest rate.
HARDSHIP
Claimant stated that he has been a licensed general contractor
since 1959. He stated that work on this project was the only major
project for his construction company. Claimant testified that he
has just finished construction of a house located at 742 23rd Street
and is currently remodeling a small house which will be completed
in 35 to 40 days.
Claimant testified that the loss of this project will impact
on his construction company. He stated that he employes his son
and one other employee who has worked for him for 22 years.
In response to questions related to other investments, claimant
indicated that he has the follooring interests in Santa Monica:
1. A six unit apartment building located at 2419 20th Street.
He stated that the building was constructed subsequent to the
enactment of the Rent Control Ordinance. Claimant owns the property
in joint tenancy with his wife.
2. A 15 unit apartment building located at 2318 16th Street
cahich was constructed approximately four years ago. Claimant owns
the property in joint tenancy with his wife.
3. Seven apartment units constructed six or seven years ago
located at 2410 Ocean Park Boulevard. Claimant owns this property ;
as a corporate entity.
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4. Claimant owns three condo=ziniums located at 1834 11th Street.
5. A 25o interest in 19,000 feet of commercial space
located at 33rd and Ocean Park Boulevard.
b. A home in Santa Monica, in which he has resided for
five and one-half years.
Claimant stated that he has attended numerous City Council
meetings and has observed the embarrassing and humiliating situations
which many property owners found themselves in. He testified that
he delayed in filing his claim because he is a proud man and did not
want to subject himself to such humiliation and embarrassment.
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