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Cars line up along Olympic Boulevard during rush hour. A proposed development on Bundy Drive and Olympic Boulevard has been put on hold because of a bankruptcy filing. Residents in Santa Monica are concerned it would contribute significantly to traffic congestion along Olympic. (photo by File Photo)

EASTSIDE — A controversial development project on the outskirts of Santa Monica at Bundy Drive is further away than ever after the bankrupt developer removed the project from the Los Angeles City Council calendar in recent weeks.

According to a press release by L.A. Councilmember Bill Rosendahl’s office, the developer of the proposed Bundy Village & Medical Complex, Michael Lombardi, sent a letter to the council on June 23 noting his intention to remove the project from the calendar of the Planning and Land Use Management committee indefinitely.

It was set to go before the committee July 26.

The proposed project raised alarm in Santa Monica, residents concerned that the complex would draw too much traffic to an intersection — Bundy Drive and Olympic Boulevard — that is already overwhelmed during rush hour.

Rosendahl declared victory, saying that the version that he first backed and then opposed is “dead, and no longer a threat of being approved in its current form.”

The applicant agreed to bring the revised project back before the City Planning Commission at a public hearing for the commission’s consideration before moving on through the process.

The shift in momentum of the project from stalled to sliding backward came after a mailer was sent out to thousands of residents saying that the dormant project could be automatically approved unless the City Council took action.

Although it is technically true that the project could have found itself approved if the government had not acted within a certain time frame, it would not have benefited the developer, who is still languishing under bankruptcy protection while it gets a new development and financing plan underway, to do so.

The attorney for Lombardi, Dale Goldsmith of Armbruster Goldsmith and Delvac LLP, accused a rival real estate firm, Kilroy Realty, of funding the mailer.

“Kilroy Realty, which owns the massive Westside Media Center across the street, recently paid for a deceitful mailer stating that the Michael Lombardi developer is seeking to develop a 900,000-square-foot hospital,” Goldsmith wrote in an e-mail. “That is entirely incorrect.”

Although a statement submitted to the L.A. City Council did say that Lombardi was courting Kaiser Hospital, UCLA and Cedars Sinai for a 900,000-square-foot development, it was only one of several options being considered as a way to recapitalize the project, Goldsmith wrote.

“There is no agreement with any hospital, nor has Mr. Lombardi submitted any revised applications to the city,” Goldsmith wrote in an e-mail.

Justin Smart, the senior vice president of development at Kilroy, did not return a phone call for comment by presstime.

Officials and neighborhood groups from Santa Monica have long-opposed the project in West L.A., citing a study conducted by the Los Angeles Department of Transportation that showed the development would create 20,000 additional trips in the already-gridlocked area.

A message from the Santa Monica Planning Department included in the final environmental impact report for the project described 15 intersections that would be significantly impacted by the project.

Another two intersections would be impacted under a different report, the letter continued, for a total of 17 intersections within Santa Monica city limits seeing a major increase in traffic as a result of the project.

According to the letter, that’s the majority of the 25 intersections that will be impacted by the project.

In another letter responding to the proposed development, local neighborhood group the Friends of Sunset Park expressed its disapproval of the 1.3 million square foot proposal.

The group’s board continued, saying that the traffic impacts would be too great, and that the town did not need another hospital.

ashley@smdp.com