sr-061681-Rh.t..
City Council Meeting 6-16-81 Santa Aionica, California
STAFF REPORT
T0: Mayor and City Council
FROM: City Attorney
SUBJECT: Claim for Vested Rights from Emergency Building
Moratorium, Claim Number M-027, by Robert Davis et al.
for a Vested Right to Construct a 3-Story Office
Building at 1545 26th Street
PROJECT DESCRIPTION
Claimants seek to proceed: with the construction of a
3-story office building at 1545 26th Street. .The property is
zoned M-1 and is currently vacant. Although the project is _
intended as office condominiums, claimant is not seeking a vested
right or hardship with respect to the subdivision issue. (The
tentative subdivision map was disapproved by the City Council on
May 26, 1981.)
The building will be located on a 15,886 square feet lot.
The building will contain 13,700 square feet of gross building
area and was designed as a three-story structure (two stories for.
office use and one story for parking).
VESTED RIGHT
A determination of a vested right depends on whether the
claimants have secured the last governmental approval necessary
for construction and, in good faith reliance thereon, performed
substantial work or incurred substantial liabilities in
furtherance thereof.
1. Governmental Approvals.
In connection with this claim, the following. governmental
approvals were obtained prior to April 22, 1981:
Demolition Permit
ARB Approval
Building Permit
11-13-79 & 12-11-79
12-17-80
4-14-81
In the present case, claimants secured the final
governmental approval necessary to complete the construction of
the office building.
2. Expenditures and Liabilities.
Claimants indicate that the total cost of development is
$1,620,000, including land acquisition. The propety itself was
purchased for $485,000. The actual cost of construction is
estimated not to exceed $1,135,000.
According to claimants, they have expended $294,954.43.
These expenditures consist princigally of land acquisition costs
and architectural fees incurred prior to the issuance of the
building permit.
In a supplemental letter in support of their claim,
claimants "conservatively" identify $23,341.07 of expenses in
direct reliance on their building permit. A major portion of
this expense is the liability incurred in connection with
entering into a construction contract. Although claimants were
seeking construction financing, none was obtained prior to the
adoption of the Emergency Building Moratorium.
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The liabilities listed by claimant prior to April 22, 1981,
are stated to be $335,006. These claimed liabilities primarily
consist of land acquisition costs, advanced deposits by a
prospective lessee, and the ,balance of architectural fees. None
of these claimed liabilities should be considered in determining
a vested right. (Land acquisition and architectural fees are not
the type of expenditures considered for a vested right; the lease
entered into with the prospective tenant created no liabilities
other than to return advanced payments made.).
In the present case, claimants have not performed
substantial construction prior to the adoption of the Emergency
Building Moratorium. Their claimed expenditures are neither
quantitatively substantial nor substantial in relationship to
overall project costs.
Claimants have pointed to two cases where small dollar
amounts are said to have vested rights to proceed under lawfully
granted permits.
Claimants' cite Kissinger v. City of Los Angeles, 161 Cal.
App. 2d 454, 327 P.2d 10 (1958), for the proposition that a
$2,300 expenditure is substantial. However., claimants did not
describe the work represented by .this expenditure: "The work
consisted of the clearing of the property, erection of the power
poles, trenching and setting of forms for foundations, the
prefabrication. of plumbing and the delivery of lumber onto the
property." 327 P.2d at 13.
Claimants also cite Trans-Oceanic dil Corp. v. City of
Santa Barbara, 85 Cal. App. 2d 776, 194 P.2d 148 (1948}, for the
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proposition that a $4,500 expenditure is substantial. Once
again, claimants did not describe the work represented by the
expenditure: "At a cost of approximately $4,500 it constructed
substantial concrete foundations for a derrick, erected an oil
derrick, dug a sump hole, erected a power house, moved boilers
into place, and laid necessary pipe lines to the site." 194
P.2d°. at 150.
In other cases, larger expenditures have not been found to
be substantial. See Cooper v. County of Los Angeles, 69 Cal.
App. 3d 529, 138 Cal. Rptr. 229 (1977) ($5,000 not substantial);
Environmental Law Fund, Inc. v. Town of Corte Madera, 49 Cal.
App. 3d 105, 122 Cal. Rptr. 282 (1975) ($10,000 to $15,000 in
expenditures not substantial); Burger v. County of Mendocino, 45
Cal. App. 3d 322, 119 Cal. Rptr. 568 (1975) ($6,500 in
expenditures not substantial).
Because claimants have not commenced construction and
because their expenditures are neither quantatively substantial
nor substantial in relationship to overall project costs,
claimants have not secured a vested right.
Claimants have given a detailed description of the economic
hardship .that they state will be incurred. if the project cannot
proceed. The declarations accompanying the Claim for Vested
Right contain this description.
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RECOMMEA'DATION
1. It is respectfully recommended that the claim for
vested right be denied. Prior to April 22, 1981, claimants did
not perform substantial work or incur substantial liabilities.
2. If, under the facts as presented above or as may be
determined at the time of the hearing,~`the City Council should
determine that application of the moratorium to claimants'
project would result in an unfair hardship to claimants, an
exemption on the basis of unfair hardship should be granted.
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