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Hoffman Street, LLC v. City of West Hollywood

November 23, 2009

HOFFMAN STREET, LLC, ET AL., PLAINTIFFS AND APPELLANTS,
v.
CITY OF WEST HOLLYWOOD ET AL., DEFENDANTS AND RESPONDENTS.



APPEAL from a judgment of the Superior Court of Los Angeles County, David P. Yaffe, Judge. Reversed with directions. (Los Angeles County Super. Ct. No. BS111413).

The opinion of the court was delivered by: Croskey, J.

CERTIFIED FOR PUBLICATION

Hoffman Street, LLC (Hoffman), and Harper Project, LLC (Harper) (collectively Petitioners), seek to redevelop their properties in the City of West Hollywood by demolishing existing apartment buildings and constructing new condominium projects. The city determined that the development applications were incomplete and later adopted an interim ordinance restricting development in areas zoned for multifamily residential uses.*fn1 After the city council extended the interim ordinance for one year, Petitioners filed a combined petition for writ of mandate and complaint against the city, its city council, and its community development department. Petitioners challenge the extension of the interim ordinance under the Planning and Zoning Law (Gov. Code, § 65000 et seq.), the Permit Streamlining Act (id., § 65920 et seq.), and the California Environmental Quality Act (CEQA) (Pub. Resources Code, § 21000 et seq.). They also seek damages based on the denial of due process, denial of equal protection, and inverse condemnation. After a hearing on the merits of the counts seeking a writ of mandate, the trial court entered a judgment denying the petition and denying any relief on the complaint. Petitioners appeal the judgment.

We conclude that the city council failed to make findings required under Government Code section 65858, subdivision (c) upon extending the interim ordinance and that the extension therefore was contrary to law and invalid. As a result, the trial court‟s denial of Petitioners‟ petition for a writ of mandate was improper thus requiring a reversal of the judgment as to the first count of Petitioners‟ combined pleading. We also conclude, however, that Petitioners have shown no prejudicial error in the denial of relief on their second count alleging a violation of the Permit Streamlining Act, and that the third count alleging a CEQA violation is moot. Finally, by entering judgment on counts four through seven without affording the parties an opportunity to be heard on those counts, the trial court deprived Petitioners of their right to a fair hearing, thus requiring a reversal of the judgment as to those counts as well.

FACTUAL AND PROCEDURAL BACKGROUND

1. Development Applications

Hoffman owns a parcel of real property located at 1350 North Hayworth Avenue in the city. The area is zoned R4, which allows multifamily residential uses. Hoffman submitted an application to the city‟s community development department in January 2006, seeking to demolish the existing 16-unit apartment building on the property and build a 17-unit condominium complex. The department sent a letter to Hoffman on February 16, 2006, stating that the application was incomplete and requesting that Hoffman provide six items and conduct a neighborhood meeting as required by the municipal code. The department sent Hoffman another letter on February 27, 2006, requesting an additional 57 items.

Hoffman held a neighborhood meeting in April 2006. A city resident submitted an application to the city in April 2006, seeking to designate the property a historical resource. The city‟s Historical Preservation Committee conducted a hearing and denied the application in October 2006. The resident appealed the denial to the city council. After a hearing on the appeal in January 2007, the city council continued the matter several times pending the preparation of a draft Historical Resources Survey Update. The city refused to accept further materials in support of the development application until after a decision on that appeal. The city denied the appeal in June 2007, without the benefit of the awaited Historical Resources Survey Update, on the grounds that the appeal presented no new information, as required.

Harper owns a parcel of real property located at 1264 North Harper Avenue in the city. The area is zoned R4. Harper submitted an application to the city‟s community development department in January 2007, seeking to demolish the existing 15-unit apartment building on the property and build a 16-unit condominium complex. The department sent a letter to Harper on January 29, 2007, stating that the application was incomplete and requesting that Harper provide numerous items of additional information and conduct a neighborhood meeting. Harper held a neighborhood meeting in March 2007 and provided additional information in an effort to complete its application.

2. Interim Ordinance and its Extension

The city council adopted an interim ordinance (Ord. No. 07-759U) on June 4, 2007, temporarily prohibiting the issuance of permits or other approvals for the development of new multifamily dwellings in the city‟s R3 and R4 zoning districts, with the exception of developments in compliance with specified interim zoning standards. The ordinance stated that its purpose was to increase both the number and the affordability of multifamily housing units in development projects in areas zoned for multifamily housing. The city adopted the ordinance as an urgency measure.

The interim ordinance stated that the city council found that "the recent proliferation of applications for multi-family structures in the R3 and R4 zoning districts with both fewer and larger units than are desirable to meet the City‟s unmet housing goals... and the significant unmet need for smaller affordable housing units are posing a current and immediate threat to the public health, safety and welfare." It stated that the city was preparing to revise the land use and housing elements of its general plan, including new regulations governing the construction of multifamily dwellings. The ordinance stated that it was adopted pursuant to Government Code section 65858 and that it would remain in effect for 45 days, unless it was extended in accordance with section 65858.

The interim zoning standards allowed the construction of (1) "[p]rojects for multi-family housing which were deemed complete or approved prior to May 21, 2007";*fn2 (2) multifamily dwellings in which at least one-half of the units were affordable, as defined in the municipal code; (3) multifamily dwellings in which the units did not exceed specified maximum size limits, the buildings did not exceed a specified height, and the net increase in total units was at least three-fold; (4) public facilities; (5) projects consolidating adjacent parcels in particular areas, provided that the projects included "a significant commercial enhancement on Sunset Boulevard"; or (6) projects adding new residential units to existing multifamily dwellings without the demolition of existing units.

The city council adopted an ordinance (Ord. No. 07-767U) on July 16, 2007, extending the interim ordinance for 10 months and 15 days.*fn3 The ordinance stated some of the same findings made in the interim ordinance concerning urgency and the need for affordable housing. It also revised the interim zoning standards by increasing the maximum size limits for some units and allowing the construction of multifamily dwellings on land where there were no existing residential buildings or only single family residential buildings.

3. Trial Court Proceedings

Petitioners filed their combined petition for a writ of mandate and complaint against the city, its city council, and its community development department in October 2007. Petitioners allege that the city council, upon extending the interim ordinance, failed to make the findings set forth in paragraphs (1) through (3) of Government Code section 65858, subdivision (c), as required. They also allege that the extended interim ordinance may have a significant impact on the environment and that the city failed to comply with CEQA. They allege further that the city intentionally delayed the processing of Hoffman‟s application to ensure that the project would not qualify under the interim zoning standards as a project for which the application was complete as of May 21, 2007.

Petitioners‟ combined pleading alleges counts for (1) failure to comply with Government Code section 65858, subdivision (c) (by both Petitioners), seeking a writ of mandate ordering the city to set aside the extension of the interim ordinance; (2) failure to comply with the Permit Streamlining Act (by Hoffman), seeking a writ of mandate establishing that Hoffman‟s application is exempt from the terms of the interim ordinance as a previously completed application; (3) violation of CEQA (by both Petitioners), seeking a writ of mandate ordering the city to set aside the extension of the interim ordinance; (4) denial of procedural due process under the United States Constitution, pursuant to title 42 United States Code section 1983 (section 1983) (by Hoffman), seeking damages arising from the delay in the processing of Hoffman‟s application; (5) denial of equal protection under the United States and California Constitutions, pursuant to section 1983 (by Hoffman), seeking damages arising from the delay in the processing of Hoffman‟s application; (6) inverse condemnation (by both Petitioners), seeking damages; and (7) declaratory relief as to all of the foregoing (by both Petitioners).

The trial court conducted a hearing on the merits of only the first three counts seeking a writ of mandate. In a minute order filed on August 18, 2008, the court concluded that the requirement that the legislative body adopt the findings set forth in paragraphs (1) through (3) of Government Code section 65858, subdivision (c) in order to extend an interim ordinance did not apply to projects involving the demolition of affordable housing units, pursuant to subdivision (g) of section 65858, and that Petitioners had failed to show that the existing apartment buildings contained no affordable housing units. It concluded that the city was not required to make those findings upon extending the interim ordinance and that the extension was neither arbitrary nor capricious. The trial court also concluded that the administrative remedy of an appeal to the city council was available for "any denial of an application for a permit," and that Petitioners had failed to exhaust that administrative remedy. The court stated further that Petitioners had failed to exhaust their administrative remedy with respect to their challenge to the extension of the interim ordinance by failing to argue to the city council that additional findings were required under section 65858, subdivision (c), and that they had failed to exhaust their administrative remedy with respect to their argument that the city was equitably estopped from asserting that their development applications were incomplete by failing to raise that point before the city council.

The trial court stated with respect to the CEQA count that Government Code section 65858, subdivision (a) expressly exempted from CEQA the adoption of an interim ordinance such as the one adopted by the city, and that the extensive procedural requirements of CEQA were "fundamentally inconsistent" with an urgency measure adopted pursuant to section 65858. It stated further that there was no evidence to support a fair argument that the interim ordinance would cause a significant environmental impact.

The minute order concluded by directing the city to prepare a proposed judgment. The order did not specifically address counts four through seven. The city submitted a proposed judgment in favor of the city on all counts alleged in the petition and complaint. Petitioners objected to the proposed judgment on the ground that the court had conducted no hearing on the merits of counts four through seven. The court overruled the objection and entered a judgment in September 2008 denying the petition for writ of ...


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