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sr-102781-6qOCT 2 7 4984 CA:RMM:BB:se City Council Meeting 10-27-81 Santa Monica, California TO: Mayor and City Council FROM: City Attorney SUBJECT: Proposed Findings Concerning Certain Vested Right Claims Under Building Moratorium Attached are proposed findings regarding the denials of claims of vested right/hardship exemption for the following claims: 1. M-038 by Manouchehr Barcohen and Ezatolah Barcohen for the properties located at 211 California Avenue. 2. M-066 by Nineteenth Wilshire Developers, a limited partnership; Charles C. Hou, general partner for the properties located at 1129 19th Street. 3. M-067 by Sixteenth Grant Developrs, a limited partnership, Charles C. Hou, general partner for the properties located at 1525 Grant Street. 4. M-068 by Charles C. Hou for the properties located at 2325 20th Street. 5. M-069 by Dave Bentz for the properties located at 2416 34th Street. 6. M-078 by Joseph P. Argenta, Ronald L. Baker, William Thon and Jeffrey Matz dba Professional Center Associates located at 1450 14th Street. c ~. oc~ a ~ ~sa4 CA:RMM:BL:se City Council Meeting 10-27-81 Santa Monica, California CLAIM NO. M-038 211 California Avenue 1. Claimants seek a determination from the City Council of a vested right or hardship exemption to construct a twenty-one (21) unit, six story condominium project with two levels of subsurface parking at 211 California Avenue in Santa Monica. 2. The project site is zoned R-4 and is presently vacant. 3. At the time of acquisition by claimants in February 1976, the property was improved with three residential structures. These structures were demolished at some time between February and April 1979. 4. A determination of a vested right depends on whether, prior to April 22, 1981, a claimant has secured the last governmental approval necessary for construction and, in good faith reliance thereon, has performed substantial work or incurred substantial liabilities in furtherance thereof. 5. Reliance is properly measured in relation to the final governmental approval and not merely the final discretionary approval. 6. Prior to April 22, 1981, claimants obtained the following governmental approvals: 1 Tentative Tract Map 12-06-76 Coastal Development Permit 04-11-77 Architectural Review Board 08-16-78 Demolition Permit 02-21-79 Building Permit 03-05-79 10-27-80 Final Tract Map 09-11-79 7. Although claimants may have acquired the last governmental approval prior to April 22, 1981, they do not now possess the last governmental approval since their October 1980 building permit expired shortly after the adoption of the moratorium. Claimant did not apply for an extension of the building permit until after it had expired. 8. Claimants, having not commenced any of the work authorized by the building permit, recognized that it would expire and that they would need to seek and obtain yet another building permit; claimants attempted to seek a new permit just prior to and after the adoption of the moratorium. 9. The total cost of the proposed development, according to claimants is $2,500,000, exclusive of costs of acquisition of the property. 10. Expenditures prior to April 22, 1981 are stated to be $221,389.33 and are in the following categories: 2 M-038 Property Acquisition and Related Costs (Finance Charges, Interest and Property Taxes Permit, Filing Fees Plans and Design Demolition Attorney's Fees Engineering Miscellaneous $123,723.35 21,258.00 59,314.00 9,282.00 4,103.00 1,250.00 2,460.00 11. Costs of acquisition of the subject property and related ownership costs, permit and permit related fees, planning and design costs do not count toward establishing a vested right. 12. None of the expenditures represent any work performed or expenditures made as a result of and in reliance on the issuance of the building permit in March 1979 or in October 1980. 13. Although demolition of the structures occurred after the issuance of the first building permit, the demolition permit and not the building permit authorize demolition; no evidence demonstrates that claimants relied on anything other than the demolition permits to tear down the structures. To the contrary, after demolition, claimants allowed that building permit to lapse for more than a year. 14. The claimed expenditures in relation to the demolition are, in any event, neither quantitatively substantial nor substantial in relationship to the overall project and its costs. 3 M-038 15. Liabilities are stated by claimant to total $400,000 and represent a loan secured by the property. 16. Liabilities relating solely to the acquisition of the property, and the subsequent refinancings of the property would not count toward or establish a vested right. 17. Although claimants possessed a building permit in March 1979, they allowed the permit to lapse and were without any permit for more than thirteen months and virtually ceased efforts to proceed with the project during that time. 18. Claimants obtained another building permit in October 1980, and after the permit neared its expiration in April 1981, claimants sought to obtain yet another one, not because they were ready to commence construction financing. 19. Claimants could not obtain and had not obtained construction financing during any of the years prior to the adoption of the moratorium and, to this date, do not appear to be in any different position with respect to obtaining such financing. 20. Although personal reasons have been cited as explanation for the lengthy efforts and lapses in those efforts toward claimants' developments, those reasons do not influence the determination that claimants are not entitled to a vested right to proceed since they do not possess the last necessary governmental approval and they did not perform substantial work 4 4~I-038 and incur substantial liabilities in good faith reliance on their building permits. 21. The staff reports submitted to the City Council by the City Attorney for its hearing of July 28, 1981 and by the City Attorney and the Hearing Examiner for the hearing on September 8, 1981 on Claim No. M-038 are hereby incorporated and adopted as though fully set forth herein. 5 M-038 CA:RMM:BL:se City Council Meeting 10-27-81 Santa Monica, California CLAIM NO. M-066 1129 19th Street 1. Claimant seeks a determination from the City Council of a vested right or hardship exemption to construct six (6) two-story condominium units at 1129 19th Street in Santa Monica. 2. The project site is zoned R-2 and is presently vacant. 3. The property was acquired by claimant in February 1979. 4. A determination of a vested right depends on whether, prior to April 22, 1981, the claimant has secured the last governmental approval necessary for construction and, in good faith reliance thereon, has performed substantial work or incurred substantial liabilities in furtherance thereof. 5. Reliance is measured in relation to the last necessary approval and not merely the last discretionary approval. 6. Prior to April 22, 1981, claimant obtained the following governmental approvals: Demolition Permit 03-23-79 Tentative Tract Map 04-07-80 ARB Approval 06-04-80 Building Permit 03-02-81 Final Tract Map 03-24-81 1 M-066 7. Claimant obtained all of the necessary governmental approvals prior to April 22, 1981. 8. The total cost of development, according to claimant, is $1,016,050. It is not known whether this total includes the cost of acquisition of the property and related property costs. 9. Expenditures prior to April 22, 1981 are stated to be $34,725.59 and relate primarily to property taxes, permit and permit related fees, architectural design, blueprints, engineering costs, dump fees and tree moving. 10. None of the expenditures listed by claimant appear to be in reliance on the last governmental approval, i.e., the final tract map. 11. Even assuming the building permit were regarded as the last governmental approval, it appears that the only expenditure arguably made in reliance on said permit is the cost of tree moving for $1575. 12. No evidence is provided to demonstrate that that expenditure was incurred only after and in reliance on the issuance of the building permit. Even if such expenditure were in reliance on the building permit, it is neither the type nor of the magnitude which would establish a vested right. 13, Costs of acquisition of the subject property and related ownership costs, permit and permit related fees, planning and design costs do not count toward establishing a vested right. 2 M-066 14. Liabilities prior to April 22, 1981 are stated to total $5,523.32, but their nature and the time at which they were incurred are unknown and would in any event not establish a vested right. 15. Although claimant obtained the last necessary governmental approval prior to April 22, 1981, no actual construction had commenced and no substantial liabilities and expenditures were incurred in reliance on the last governmental approval. Accordingly, claimant does not have a vested right to proceed with the proposed development. 16. The staff report submitted to the City Council for its hearing of September 15, 1981 on Claim No. M-066 is hereby incorporated and adopted as though fully set forth herein. 3 r~-oC,6 CA:RMM;BL:se City Council Meeting 10-27-81 Santa Monica, California CLAIM N0. M-067 1525 Grant Street 1. Claimant seeks a determination from the City Council of a vested right of hardship exemption to construct five {5) two-story condominium units at 1525 Grant Street in Santa Monica. 2. The project is zoned R-2, is presently vacant, and was acquired by claimant in March 1979. 3. A determination of a vested right depends on whether, prior to April 22, 1981, the claimant has secured the last governmental approval necessary for construction and, in good faith reliance thereon, has performed substantial work or incurred substantial liabilities in furtherance thereof. 4. Reliance is measured in relation to the last necessary approval and not merely the last discretionary approval. 5. Prior to April 22, 1981, claimant obtained the following governmental approvals; Tentative Tract Map 06-16-80 Architectural Review Board 07-02-80 Building Permit 03-05-81 6. Claimant did not obtain the last governmental approval prior to April 22, 1981 in that a final tract map had not yet been obtained. 1 7. The total cost of development, according to claimant, is $739,260.00. It is not known whether this total includes the cost of acquisition of the property and related property costs. 8. Expenditures prior to April 22, 1981 are stated to be $24,587.45 and relate primarily to property taxes, permit and permit related fees, architectural design, blueprints, engineering costs, and miscellaneous items. 9. In that the last governmental approval was not obtained prior to April 22, 1981, none of the expenditures listed could be determined to be in reliance thereon, 10. Even assuming the building permit were regarded as the last governmental approval, it appears that the only expenditures arguably made in reliance on said permit are the deposit for relocating city tree ($1000) and a payment to King Fence Co. ($580). 11. No evidence is provided to demonstrate that those expenditures were incurred only after and in reliance on the issuance of the building permit. It is likely that the tree relocation is not related to the building permit, but rather fulfills a condition of the tentative tract map, the satisfaction of which is a prerequisite to obtaining a final tract map. Even if either or both expenditures were made in reliance on the building permit, neither is of the type or magnitude which would establish a vested right. 2 M-067 12. Costs of acquisition of the subject property and related ownership costs, permit and permit related fees, planning and design costs do not count toward establishing a vested right. 13. Liabilities prior to April 22, 1981 are stated to be $53,562.54 and represent an assumption of claimant's note for $48,812.54 and $5000 for liabilities, the nature and occurrence of which are unknown. 14. The assumption of the note appears to be a liability relative to the acquisition of the property in March 1979 and as such would not count towards a vested rights. 15. Since prior to April 22,1981, claimant had not obtained the last necessary governmental approval, had not commenced actual construction., and had not incurred substantial liabilities and expenditures in reliance on the last necessary approval, claimant does not have a vested right to proceed with the proposed development. 16. The staff report submitted to the City Council for its hearing of September 15, 1981 on Claim No. P9-067 is hereby incorporated and adopted as though fully set forth herein. 3 M-Ob7 CA:RMM:BL:se City Council t9eeting 10- 27-81 Santa Monica, California CLAIM NO. M-068 2325 20th Street 1. Claimant seeks a determination from the City Council of a vested right or hardship exemption to construct five (5) condominium units at 2325 20th Street in Santa Monica. 2. The project site is zoned R-2, is presently vacant, and was acquired by claimant in September 1978. 3. A determination of a vested right depends on whether, prior to April 22, 1981, the claimant has secured the last governmental approval necessary for construction, and in good faith reliance thereon, has performed substantial work or incurred substantial liabilities in furtherance thereof. 4. Reliance is measured in relation the last necessary approval and not merely the last discretionary approval. 5. Prior to April 22, 1981, claimant obtained the following governmental approvals: Demolition Permit 03-23-79 Tentative Tract Map OS-07-79 ARB Approval 06-06-79 Building Permit 10-16-79 07-01-80 04-21-81 1 6. Claimant did not obtain the last governmental approval prior to April 22, 1981 in that he did not possess a final tract map by that date. 7. The total cost of development, according to claimant, is $774,010.00. It is not known whether this total includes the cost of acquisition of the property and related property costs. 8. Expenditures prior to April 22, 1981 are stated to be $26,972.65 and relate primarily to property taxes, permit and permit related fees, architectural design, blueprints, engineering costs, and miscellaneous items. 9. In that the last governmental approval, i.e., the final map, was not obtained prior to April 22, 1981, none of the expenditures listed could be determined to be in reliance thereon. 10. Even assuming the building permit were regarded as the last governmental approval, the point of reliance would be the permit issued on April 21, 1981, and no expenditures were made in reliance on the issuance of that permit. 11. Only the building permit issued on April 21, 1981 may be appropriate to consider in that no work authorized by the previous building permits was commenced during the time they were valid {i.e., 180 days) as demonstrated by the need to obtain a new and third building permit on April 21, 1981 2 PII-068 12. Costs of acquisition of the subject property and related ownership costs, permit and permit related fees, planning and design costs do not count toward establishing a vested right. 13. Liabilities are listed at $9,564.53 and are undated and unexplained and are accordingly not determinative of or considered for a vested right. The figure is, in any event, neither quantitatively substantial nor substantial in relation to the overall cost of the project. 14. Since, prior to April 22, 1981, claimant had not obtained the last necessary governmental approval, had not commenced any significant, if any at all, construction, and had not incurred substantial liabilities and expenditures in reliance on the last necessary approval, claimant does not have a vested right to proceed with the proposed development. 15, The staff report submitted to the City Council for its hearing of September 15, 1981 on Claim No. M-068 is hereby incorporated and adopted as though fully set forth herein. 3 M-068 CA:RMM:BL:se City Council Meeting 10-27-81 Santa Monica, California CLAIM NO. M-069 2416 34th Street 1. Claimant seeks a determination from the City Council of a vested right or hardship exemption to construct six (6) condominium units at 2416 34th Street in Santa Monica. 2. The project site is zoned R-2 and is presently vacant. 3. The property was acquired by claimant in January 1980. 4. A determination of a vested right depends on whether, prior to April 22, 1981, the claimant has secured the last governmental approval necessary for construction and, in good faith reliance thereon, has performed substantial work or incurred substantial liabilities in furtherance thereof. 5. Prior to April 22,1981, claimant obtained the following governmental approvals: Demolition Permit 12-28-79 Tentative Tract Map 04-07-80 Architectural Review Board 12-03-80 Building Permit 03-20-81 Final Tract Map 04-03-81 6. Claimant obtained all of the necessary governmental approvals prior to April 22, 1981. 1 7. The total cost of development, according to claimant, is $710,000 which includes the purchase price of the subject property. 8. Expenditures prior to April 22, 1981, exclusive of the cost of acquisition, are stated to be $35,455 and related to demolition costs, plans, permits and related fees, engineering costs and the cost of a temporary power pole. 9. None of the expenditures listed by claimant were in reliance on the last governmental approval, i.e., the final tract map. 10. Even if the building permit were regarded as the last governmental approval, the only expenditure in reliance on the issued building permit is $150.00 for a temporary power pole, 11. Permit fees and planning and design fees do not count toward establishing a vested right. Nor would costs of acquisition count towards establishing a vested right. 12. Liabilities prior to April 22, 1981 are stated to be $216,805 and include the costs of acquisition, the expenditures referred to in finding #8 above, an unspecified loan fee and a cost stated to be for securing and letting bids. 13. None of the liabilities are in reliance on the last governmental approval and would not establish a vested right. 2 M-069' 14. Although claimant obtained the last necessary governmental approval prior to April 22, 1981, no actual construction has commenced and no substantial liabilities and expenditures were incurred in reliance on the last governmental approval. Accordingly, claimant does not have a vested right to proceed with the proposed development. 15. The staff reports submitted by the City Attorney and Hearing Examiner to the City Council for its hearings of September 8, 1981 and September 15, 1981 on Claim No. M-069 are hereby incorporated and adopted as though fully set forth herein. 3 P4-069 CA:RMM:BL:se City Council Meeting 10-27-81 Santa Monica, California CLAIM N0. M-078 1450 14th Street 1. Claimant seeks a determination from the City Council of a vested right to construct an office building at 1450 14th Street, consisting of two stories of office space above grade level parking and subterranean parking. 2. The project site is comprised of three parcels. Two of the parcels are presently zoned C4A, the third is zoned R3. 3. The Commercial and Industrial Task Force of the City of Santa Monica had recommended that the area of the proposed development be rezoned R3 which recommendation was pending at the time of the decision. 4. The parcels are presently vacant and were acquired by claimant, in April and August, 1978. 5. A determination of a vested right depends on whether, prior to April 22, 1981, the claimant has secured the last governmental approval necessary for construction and, in good faith reliance thereon, has performed substantial work or incurred substantial liabilities in furtherance thereof. b. Prior to April 22, 1981, claimant obtained the following governmental approvals: 1 ARB Approval 09-06-78 Demolition Permit 02-14-79 Building Permit 04-30-79 12-06-79 7. Claimant did not obtain the last governmental approval prior to April 22, 1981, since it was required to obtain and had not obtained a new building permit, its previous one having expired nearly a year before the adoption of the moratorium without commencement of construction. 8. Claimant also needed a variance to use the R3 lot for commercial purposes. A renewal of said variance had been obtained in January 1981 and expired in June 1981. 9. Despite knowledge that the variance would and, indeed, had expired claimant waited until more than four months from the adoption of the moratorium had passed and until one month before its expiration to file a claim for exemption. 10. The total cost of development, according to claimant, is $3,000,000, including land acquisition in the amount of $480,500. 2 m-n~R 11. Expenditures prior to April 22, 1981 are stated to be $246,944.74 and are in the following categories: Land loan interest $ 91,162 Property taxes 10,496 Land liability insurance 285 Architectural fees and architect fees loan payment 122,571 Permit and permit fees related 9,508 Demolition 4,800 Miscellaneous 5,740 12. The work performed prior to April 22, 1981 consisted of demolition, soil and seismic tests, permit and permit related fees and building and design plans. No construction commenced prior to April 22, 1981. 13. In that claimant did not possess the last governmental approval prior to April 22, 1981, none of the expenditures listed could be determined to be in reliance thereon. 14. Nearly all of claimant's expenditures concern land acquisition and related property costs and architectural fees incurred even prior to the issuance of the now expired building permits. 15. In any event, costs of acquisition of the subject property and related ownership costs, permit and permit related fees, planning and design costs do not count toward establishing a vested right. 3 ra-o7s 16. Liabilities are listed at $394,500 plus down payment costs of property acquisition. The liabilities represent payment owed to the architect for building plans and a $3&5,000 land loan. 17. Since prior to April 22, 1981, claimant did not possess the last necessary governmental approval, i.e., a valid building permit; had not commenced construction; and had not incurred substantial liabilities and expenditures in reliance on the last governmental approval, claimant does not have a vested right to proceed with the proposed development. 18. The staff report submitted to the City Council for its hearing of September 22, 1981 on Claim No. M-078 is hereby incorporated and adopted as though fully set forth herein. 4 M-078