City Faces Challenge to Controversial DWP Housing Project

On the final day of the public comment period for the DWP housing project’s environmental report this month, the city received a 22-page letter from a law firm, challenging every major aspect of the project.

Drafted by the Santa Monica law firm Chatten-Brown & Carstens on behalf of a group called Seal Beach for Open Space (SBOS), the letter pokes holes in the report’s environmental findings and argues that the city’s legal settlement with the property’s owners precommits the city to the project in violation of state law. The letter raises the specter that one of the decade’s most divisive projects could, once again, result in a lawsuit against the city.

The environmental report’s “analysis is infected by the City’s precommitment to rezone this property for residential uses. The project would also violate the Coastal Act and public trust doctrine by allowing private residential uses instead of visitor serving uses that promote coastal access and recreation. For these reasons, SBOS urges the City to consider alternatives that would reduce the impacts and would allow for visitor serving uses in this unique location,” the letter states. “Precommitment to a project has been repeatedly condemned by the California Supreme Court as rendering the environmental review process under CEQA little more than a post hoc rationalization for a decision already made and defeating the fundamental purposes of CEQA.”

The attorney who drafted the letter did not return calls for comment.

After a year of legal wrangling between the city and property owners Bay City Partners, the two sides inked a settlement agreement in March that essentially commits the city to consider the 48-home project “in good faith.” The City Council is not required to approve the project.

However, if the project were approved, the developers would give the city 6.5-acres for open space and access to a bike trail and the First Street parking lot. In exchange for the open space, access and a sewer easement, the city will pay Bay City Partners nearly $2 million and give the developers about 7,000 square feet of roadway along First Street. The city would also agree to support the project when it goes before the California Coastal Commission for approval. Of the $2 million, $900,000 has already been paid in exchange for a sewer easement, and the city won’t pay the remaining $1.1 million to for the open space or get the deed to it until the project has received all it's approvals, including Coastal Commission approval. If the city approves the final project, it will advocate for it before the Coastal Commission.

In the letter, SBOS accused the city of having a financial stake in approving the project because the city will be out the $900,000 it already paid for the sewage easement should the lease expire in 2015 without the project being approved by the council.

“The California Supreme Court found that even if a public agency retains legal discretion to reject a proposed project, by executing a detailed agreement with a developer and lending its political and financial assistance to a project, the agency has, as a practical matter, committed itself to the project, necessitating the completion of CEQA review,” the letter continued. “Additionally the settlement agreement requires the City to assist the Project proponents in obtaining a coastal development permit (CDP) from the Coastal Commission, including a requirement to testify on behalf of the Project proponent in favor of a CDP before the Coast Commission. The city’s commitment to advocate in favor of the Project further precommits it to the Project.”

City officials did not return calls for comment on the letter, but last spring Planning Director Mark Persico took pains to illustrate that the legal agreement did not mean that the city would approve the project.

“It should be noted that a settlement agreement is different than a development agreement,” Persico wrote in a staff report. “A settlement agreement typically settles a dispute, where a development agreement authorizes development of a project. In this case, the settlement agreement resolved litigation and does not commit the City to any action except a “good faith” review of BCP’s proposed project.”

The SBOS letter went on to object to several conclusions in the city’s environmental report, calling inadequate the findings regarding the project’s impact on water quality, wetlands, wildlife, aesthetics, coastal access and hazardous materials on the property.

On Feb. 22, the city’s Recreation and Parks Commission will meet to review the project’s impacts on parks and open space, and the Final Environmental Impact Review will be released on Feb. 24.