Local lawsuit levied by Jacobs still pending
A new owner could soon take over one of the most controversial and largest development sites in Santa Monica.
Developer Howard Jacobs, who owns property on the north end of Main Street which has been approved for a residential and commercial complex, confirmed Friday that he has had some “bites” on his $27 million listing.
“There are some active negotiations,” he said, adding he didn’t want to elaborate on them until a deal is closed.
Jacobs, who has been battling City Hall for nearly four years to get the project approved, put the property up for sale in November, shortly after he received the last approval he needed from the state’s Coastal Commission.
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.
Jacobs, who has developed seven other properties in Santa Monica, said he wasn’t planning on selling the Main Street property, but his circumstances have changed.
“We think the timing is right and the market is strong,” he said. “Just like anything else, during the process things change in people’s lives. It’s the right time for me.
“I don’t think it’s a surprise... a lot can happen in a person’s life,” Jacobs added. “It’s personal and business combined.”
When City Council members approved the project last February, they thought Jacobs would be the developer. But as one City Councilman said, once the property is approved for development, it doesn’t matter who develops it.
“The conditions are supposed to go with the land, not the owner,” said City Councilman Ken Genser. “It’s not a city issue. The same conditions will apply to whomever buys the property.”
The development site occupies the entire block bounded 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.
The approved project has gone through at least four major revamps in the past 3 1/2 years, when Jacobs first purchased the property. He has had every aspect of the property put under scrutiny — everything from the height and width of the buildings’ elevators to how the potted plants on the top floor will be watered, to the color of paint and kind of materials that will be used for the exterior.
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 be luxury apartments for rent.
But the public review process was only part of the delay. Jacobs said the planning department — known for its bureaucratic red tape and slowness — spent too long preparing a crucial document that reviews impacts to the neighborhood.
So Jacobs filed a lawsuit against the city in 2001 claiming it has cost him millions of dollars because it dragged its feet in completing the environmental impact review of the project. The report was completed several months after the supposed deadline.
Jacobs has said in the past that the delay has cost him nearly $3 million because he was sitting on land that he had to pay for and 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 lawsuit is moving forward but Jacobs said he’s open to making a deal. The city, however, isn’t budging so far.
“We are always ready to discuss a meaningful settlement, but they want us to drop the lawsuit, which is not a settlement,” he said. “If and when the city wants to talk about a settlement, (we) stand ready.”
“We are always ready to discuss a meaningful settlement, but they want us to drop the lawsuit, which is not a settlement.” — – HOWARD JACOBS Developer
Genser wouldn’t comment on the case because it’s pending.
The development will be the largest project Main Street has seen in years. Supporters of it say it will clean up a section of Main Street that has become blighted since the Pioneer Boulangerie Bakery was abandoned. But some neighbors say the development is too big, will ruin the character of the area and create too much traffic.
Originally published in the Santa Monica Daily Press print edition on February 3, 2003. Read the original PDF.