City Council to Discuss Developer Lawsuit in Closed Session

The City Council will discuss a lawsuit filed by a developer regarding a property on Lake Avenue in closed session on Monday.

According to Richard McDonald the city refused to process an affordable housing concession permit on the grounds that housing cannot occupy more than 50 percent of the total building floor area on Lake Avenue.

DC Properties wanted to build a 70-unit all market rate mixed use project at 141 S. Lake Ave.

“We have a big disagreement with the city over the applicability of the state density bonus law and the interpretation of the local code on mixed use projects along South Lake Avenue. The city contends that certain restrictions on the project are not subject to the state density bonus law, and we contend that they are,” said Richard McDonald.

The project was changed to an 87-unit density bonus project, including six very-low income units, and 10,000 square feet of commercial space on the ground floor.

The developers applied for a concession to use less than 50 percent of the ground floor for commercial, but that was rejected. In the lawsuit McDonald is asking the project be allowed to proceed and several million dollars.

“They didn’t let us even appeal their decision,” McDonald said. “They would not let us apply. They would not let us appeal. They would not let us do anything. The only recourse we had was the lawsuit.”

This is not the first time McDonald has threatened to sue the city.

In July, McDonald threatened to sue the city after the Council refused to approve a project at 253 S. Los Robles Ave., That project was eventually approved.

Under state law, developers are granted bonuses if developers adds more than the required number of local income housing units. Developers were asking for 21 extra units and two extra units for eight additional units.

Among other things the current lawsuit blames the political atmosphere in Pasadena.

“On July 18, the Pasadena City Council then considered a development moratorium, similar potential limits on development, across the board reductions in city wide height limit by 10 feet, and other options targeted at density bonus projects under the SDBL (State Density Bonus Law).

In doing so, the City Council and in particular Councilmember Victor Gordo asked staff to recommend policy to counteract and guard against state action/exceptions.”

According to the lawsuit, the developers will prove they have suffered damages due to not being able to advance with the project, including the loss of the value of the land, the lost value on the proposed units that were to be built on the property

The state and the city are undergoing an affordable housing crisis. Gov. Gavin Newsom wants to limit city’s ability to curtail housing projects.

“The desire of many cities to control their own fate leads to disagreements like this lawsuit,” said McDonald.