CITY HALL — The City Attorney’s Office on Wednesday announced developments in two cases officials hope will serve as warnings to Santa Monica property owners who fail to honor affordable housing requirements.

In one case, City Hall lawyers said they had reached a deal to settle a lawsuit that centered on The Plaza at the Arboretum, a 350-unit apartment complex at 2200 Colorado Ave. whose owners had allegedly violated a contract requiring them to verify the income levels of prospective tenants before renting out 97 apartments designated as “affordable.”

The units were supposed to be reserved for low- and moderate-income tenants, but in a complaint filed in February, City Hall said the owners were unable to prove the tenants in the affordable units met the income requirements.

The suit named Blackrock Realty Advisers, CSHV Arboretum, and Riverstone Residential CA.

Deputy City Attorney Gary Rhoades on Wednesday said the settlement is still being finalized and declined to disclose its terms. But he said the deal will involve revisions to the deed-restriction requirements at the Arboretum and to its 1998 development agreement with City Hall — the contract that put the affordable housing restrictions in place.

He said it was still unknown how many tenants at the building should have been barred from renting affordable apartments there, and added, “It’s very possible that the Arboretum will be able to put together the documents showing that everybody is eligible.”

Rhoades gives the Blackrock attorneys credit for immediately cooperating with the city and helping “us come up with a creative, first-of-its-kind agreement.”

Reached on Wednesday, Councilman Terry O’Day declined to discuss specifics of the settlement, but said: “We feel very comfortable that we have something meaningful that meets our policy objective and maintains the enforceability of our affordable housing agreements.”

On Tuesday, officials also announced they had filed a lawsuit alleging similar affordable housing violations against the owners of three apartment units at another residential building, The Dorchester, located at 1040 Fourth St.

The suit, filed on Monday in Superior Court in Santa Monica, named Novin “Kathy” Golshani and a realty company she is believed to be involved with, Bilet Properties LLC.

The complaint alleges Golshani and the company own three of the Dorchester’s 15 first-floor units, all of which are deed-restricted to low- or moderate-income tenants.

Rhoades said his office has been attempting to obtain verification that the units were occupied by individuals who meet the requirements since last June. Golshani and Bilet Properties, he said, have not cooperated with City Hall.

The investigation into the Dorchester — a 42-condominium building constructed under a 1982 development agreement that designated the entire first floor as “affordable” — revealed other owners also were out of compliance with the building’s deed restriction requirements, Rhoades said.

While he said every first-floor owner will have to comply with the deed restriction requirements, he added he doesn’t expect to file lawsuits against other owners.

“Most of them are already trying to comply and others are going to work with us to get into compliance,” he said.

Some tenants at the Dorchester could be evicted as a result of City Hall’s decision to enforce the deed restrictions.

“If it turns out they have a tenant that is not eligible under this deed restriction, then that person is going to have to leave,” Rhoades said.

The announcements about both lawsuits came the same day the City Council conducted a review of development agreement compliance and affirmed a commitment to holding developers accountable.

Rhoades said the lawsuits are the first of their kind in Santa Monica.

nickt@www.smdp.com

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