Thirteen controversial oversized developments could be reined in if a proposed settlement goes through. The quid pro quo is the City will settle several lawsuits with the developer WS Communities. The City of Santa Monica wants to bring 13 Builders Remedy projects back into the regular development pipeline at their May 9 meeting through incentives created as part of a settlement with the developer.
City Hall has proposed settling several lawsuits with several companies related to WS Communities, the development company owned by Neil Shekhter that applied for 13 of the 16 Builder’s Remedy projects. While the cases being settled are entirely unrelated to the Builders Remedy projects, the terms include a clause that offers WS Communities incentives to drop the otherwise unstoppable projects.
WS Communities and its subsidiaries have been engaged in several lawsuits with the city over tenant harassment and the city’s leasing rules. At the May 9 meeting, Council will be presented with a settlement that covers those cases.
“The Settlement Agreement provides financial benefits for three recently displaced tenants of 1242 10th Street and guarantees them the right to return. The Settlement Agreement would also authorize the transfer of 20 deed-restricted affordable units from 1560 Lincoln Blvd to 1038-42 10th Street,” said the staff report.
However, the deal includes an additional clause independent of the leasing/harassment cases. The settlement offers WS several incentives to reenter the normal development process. It allows the developer to combine affordable housing requirements from individual projects into a single location while preserving State density bonuses that would otherwise be invalid if affordable housing were combined. It also offers increased allowable parking in their developments.
“As part of the Settlement Agreement, the owners’ have the option to suspend the BR Project applications, and, instead, file thirteen new multi-family housing projects that would qualify for ministerial approvals under the ordinances implementing the certified Housing Element adopted on April 11, 2023 with the additional incentives authorized by the State Density Bonus Law and, potentially, the local incentives discussed above if the City Council elects to ultimately adopt the ordinance,” said the staff report.
Ministerial review does not allow the city to outright deny a project if it conforms to preestablished zoning standards and the city said it would prioritize the new applications if the deal is agreed upon by both sides.
The City of Santa Monica failed to adopt a state mandated Housing Element by the deadline, allowing developers to file for Builders Remedy projects. Those projects are entirely outside city control and can bypass all zoning rules provided they meet minimum standards for affordability. The City said it maintained the applications were not valid and the application of the provision is untested in court.
The proposed deal would cover projects at 1437 6th street, 601 Colorado Avenue, 1518-24 7th Street, 1443 Lincoln Boulevard, 3030 Nebraska Avenue, 2901 Santa Monica Boulevard, 1415-27 5th Street, 1557 7th Street, 1238 7th Street, 1925 Broadway, 12381242 10th Street, 1007 Lincoln Boulevard and 1038 10th Street.
“The overall result is that WS will utilize the Housing Element implementing ordinances with expedited processing rather than the Builder’s Remedy statute to develop housing, and the housing built by the owners will satisfy a significant portion of the City’s regional housing needs, as planned in its certified Housing Element. Additionally, three tenants will have the right to return to their units with financial compensation,” said the report.
The Santa Monica Coalition for a Liveable City (SMCLC) opposes the deal saying the information presented so far lacks important details.
“This proposed settlement is essentially a mega development agreement – the biggest one in the city’s history,” said Diana Gorden on behalf or SMCLC in an email sent to Council. “Given this, there needs to be a high degree of disclosure as to what is being built and what the real-life benefits and burdens to the community will be if implemented. And there needs to be a more open and transparent process and sufficient notice than simply adding, almost as an afterthought, an administrative item to an already packed Council agenda.”
Council meets on Tuesday May 9 in City Hall. Closed session begins at 5:30 p.m. and open session begins when closed session items are concluded.