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By Olin Ericksen
Staff Writer
April 26 -- Surrounded by a team of lawyers and
his architect, residential mega-developer Neil Shehkter paced
and made small talk in the marble City Hall lobby, but nothing
could take his mind off the tens of millions of dollars that
hung on the City Council's decision Tuesday night.
With studios comprising more than two-thirds of all rental
housing planned in Santa Monica, the council Tuesday rushed
through an emergency ordinance to dramatically slow their
permitting.
Now Shehkter, the single largest developer behind the buildings,
and his company NMS properties, plan to file a lawsuit challenging
the council’s move, which would require the projects
to undergo a potentially lengthy and costly public process.
(see story)
"The law will basically stop (the projects) and send
them to discretionary review, and then God knows what will
happen," Shehkter said, as the council debated the new
ordinance in nearby chambers before unanimously approving
it.
"The bank might not give us an extension on our loan
or the financial reserves might run out," said Shehkter,
speaking with an accent. "I don't know because I don't
know what the timeline is going to be in the discretionary
review. I don't know where they are going to put” these
projects.
Tuesday’s vote came two weeks after council members
learned that 1,057 studios of no more than 400 square feet
and renting for more than $1,000 each had entered the planning
pipeline under an ordinance that allowed large affordable
housing projects in non-residential zones to be quickly approved
administratively. (see
story)
The new emergency ordinance ensures that any project of more
than 50 units anywhere in the city, including those that are
affordable, must go before the Planning Commission, whose
decision could be appealed to the council.
"It is an adjustment and needs to happen now,"
said Council Member Herb Katz, who along with Bob Holbrook,
scheduled the item.
In addition to covering future projects, the decision could
likely redirect hundreds of units already submitted to the
City for staff approval.
These include the 623 units in a sprawling four-story project
Shehkter plans to build in Santa Monica’s light manufacturing
district, which is the subject on an ongoing debate over how
best to use that land.
"We as a council for a long time have talked about what
uses can be” in the manufacturing zone, Katz said. "If
we don't look at (recent development), we could change the
complexion of the City."
Despite a desperate need for housing, especially affordable,
City planners worry that the wave of 150 to 400-square-foot
units limited to a maximum of two persons each could subvert
plans to build a healthy mix of rental housing.
"More than half of all the development taking place
(in Santa Monica) are Single Room Occupancies (SRO),"
said Eileen Fogarty, the City's new planning director, noting
that 1,660 total units are being proposed citywide.
While City officials contend that 1,057 of those are proposed
SROs or studios, the firm hired by Shehkter, Santa Monica-based
Killefer Flammang Architects, estimates that 1,150 units have
either already been or are soon to be proposed in five projects.
Because Shehkter's affordable housing projects outside residential
zones qualify for bonuses under State and local laws, they
can take up more than a third more square footage and add
10 more feet of height, perfect for parcels in industrial
zones, Fogarty said.
"The big issue in terms of the (manufacturing district)
is you have very large parcels," the planning director
said.
The proposed projects -- which are expected to be rented
to students and young professionals -- also would avoid environmental
review and are not required to provide as much open space
or parking as other development projects.
Shehkter, however, said his company would include a parking
space per unit and more than 60 percent of the land would
be dedicated for open space.
Despite trying to work with planners and following all the
rules, Shehkter and his attorneys believe he is being singled
out.
"I think they are targeting our project and targeting
any affordable projects," he told the Lookout Tuesday.
"You don't want any affordable housing, fine… Nobody
else does 100 percent for-profit (affordable) housing. Nobody
else does it."
Shehkter's attorneys said they are "going to examine
the new law" and take stock of "their legal remedies."
Some of those remedies may already be laid out in a 9-page
letter submitted Tuesday to the City by Benjamin Reznik and
Derek Jones of Jeffer, Mangels, Butler and Marmaro LLP in
an effort to undercut the emergency status of the ordinance.
Council members counter that the law must be implemented
immediately to persevere long-term planning options and avert
the negative impacts any large development would have on the
health and safety of residents in the area, through such things
as traffic.
In his efforts to fight back, Shehkter also began laying
the groundwork for a legal challenge based on State affordable
housing laws, the illegal taking of property by governments
without due process and other potential issues.
"God only knows what will happen," Shehkter said.
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