Judge rules in City Hall’s favor in development suit
A Santa Monica judge on Wednesday dismissed a developer’s $2 million lawsuit against City Hall, saying it wasn’t responsible for delays in approving the largest project Main Street has seen in years.
Howard Jacobs sued City Hall in 2000, claiming he lost millions of dollars because it dragged its feet in completing the environmental impact review of his development project. The environmental report was completed several months after the supposed deadline, Jacobs claimed.
Although he was unavailable for comment on Thursday, Jacobs has said in the past that the delay cost him nearly $3 million because he was sitting on land that he had to pay for. He said the city delayed him his right to get a return on his investment in a timely manner. Jacobs has said that he pays $115,000 a month for the mortgage, insurance and maintenance of the property.
The development site occupies the entire block between Neilson Way and Main Street, and Bay Street and Bicknell Avenue, as well as another parcel across the street. The larger site, on the west side of Main Street, used to be the location of the Pioneer Boulangerie Bakery.
Jacobs put the property up for sale shortly after he received the last approval he needed from the state’s coastal commission last fall. He purchased the property for $5 million and it is now on the market for $27 million.
Along with the price tag comes all the approvals and conditions given by the Santa Monica City Council to build the 170,000-square-foot, four-story, 133-unit housing and retail development.
Superior Court Judge Patricia Collins granted the city’s motion to dismiss the lawsuit on the grounds that the city is not liable for permit delays. Judge Collins ruled that the city had not deprived Jacobs of his property rights and “delays in the permit process itself are not actionable.”
Judge Collins ruled that “such delays are an incident of ownership that may be imposed on the developer rather than the general taxpayer without violating the United States Constitution.” Judge Collins also ruled that Jacobs failed to produce any admissible evidence to show that the city fabricated delays.
2D4,“This ruling affirms a bedrock principle of land use law that a city is not liable for permit delays,” said Deputy City Attorney Cara E. Silver, who argued the case for the city. “The city has an obligation to the community at large to comply with environmental laws and should not be forced by a developer to take shortcuts in this area.”
Jacob’s permit application to develop a mixed use project on the site was deemed complete in April 2000 and the draft environmental impact report was completed in August 2000, according to city officials. The Planning Commission denied the project in December 2001. The Santa Monica City Council reversed the Planning Commission’s decision and approved the project in February 2002.
Jacobs, who has developed seven other properties in Santa Monica, battled City Hall for nearly four years to gain approval for the project.
The approved project has gone through at least four major revamps in the past 3 1/2 years.
Jacobs’ investment not only includes millions of dollars in plan preparations and the price of the property itself, but also hundreds of hours spent in the public review process.
Jacobs had envisioned the ground floor of the buildings’ retail space to have neighborhood-serving stores and upstairs would feature luxury apartments.
Originally published in the Santa Monica Daily Press print edition on May 9, 2003. Read the original PDF.