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Judge Rules Against City in Development Lawsuit

Builder must be allowed to appeal ruling on South Lake project

Published on Thursday, April 8, 2021 | 12:48 pm

A Superior Court judge has ruled the city must allow a developer to appeal a ruling on a project that was denied by the city after the developer attempted to use a concession to get around a law that restricts converting commercial buildings to housing on portions of that street.

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

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

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.

Under terms of that plan, the developer received two concessions under state law.

However, the developer attempted to use a concession for an
exemption to the housing rule.

Under state law, developers are granted bonuses if they add more than the required number of lower-income housing units.

City officials shot down that request under the claim that concessions could only be used for development standards, including building height, and then denied a request for an appeal on the project.

At the March 19 hearing, Los Angeles County Superior Court Judge Mitchell Beckloff did not rule on the zoning issue that led to the case being filed but, instead, found fault with the city’s refusal to allow an appeal.

“The city concedes the zoning administrator’s letter of September 26, 2019 sets forth two decisions. First, under the clear terms of the Municipal Code, an application for concession is not available when the applicant is trying to change the use of the piece of property. Second, since the application for use concession was simply unavailable, there was no appealable decision on the application,” Becklofff wrote.

“It is curious to the court that despite the city’s decision on Sept. 26, 2019, the city contends petitioner has no remedy for those decisions when he contends the city erred. That is, there can be no appeal where the city has declared the decision as final — case closed,” the judge wrote.

According to the judge, the city’s refusal to hear an appeal did not comply with the city’s municipal code, which states, “an appeal can be filed by any person affected by a determination, decision, action rendered by the Director, Hearing Officer, Board of Zoning Appeals, Environmental Administration, Design Commission, Arts and Culture Commission, Historic Preservation Commission, Advisory Agency or Commission.”

Although the city is mired in an affordable housing shortage, along with the rest of the state, city officials and the City Council have opposed legislation that waters down the city’s ordinances and allows concessions to developers.

In May, McDonald told Pasadena Now that his client has 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.”

The project would have included 10,000 square feet of commercial space on the ground floor.

This is not the first time, McDonald and the city have been at odds.

In July 2019, McDonald threatened to sue the city after the City Council refused to approve a project at 253 S. Los Robles Ave., That project was eventually approved.

“It’s always nice to win,” said McDonald “We are looking forward to having the city finally address and hopefully fix how it processes density bonus applications.”

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