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Appellate Court Rules in Favor of Saudi Prince in Benedict Canyon Case
Rejects arguments that ordinance requires environmental review

In the much publicized case of a Saudi Prince seeking to build his residential estate, a unanimous three-judge panel of the Court of Appeal published a decision in which it affirmed a lower court judgment and ruled in favor of the Prince and against the City of Los Angeles, Bruce Karsh and Martha Karsh. In Tower Lane Properties v. City of Los Angeles, Bruce Karsh, Martha Karsh, the appellate court rejected the City and Karsh arguments that the residential project must first file a tentative tract map and undergo environmental and discretionary review before issuance of a building permit.

In reaching its conclusion, the court considered the plain meaning of the subject ordinance (Los Angeles Municipal Code 91.7006.8.2) as well as the City’s historical interpretation and application. The court found that the prior owner of the Prince’s property has been granted grading permits in 2005 and 2006, and that “…the Karshes obtained grading permits for nine projects on their large hillside property, all without undergoing any environmental review under the Ordinance.” The court concluded: “Thus, out of 22 grading permits for properties having hillside grading sites larger than 60,000 square feet, only one required any type of clearance, which was obtained without undergoing any environmental review.”

The court rejected the City’s efforts to interpret the Ordinance in such a manner as to require the Saudi Prince to undergo environmental review, concluding: “Because the City cannot point to a consistent and long-standing interpretation, its current interpretation is entitled to no deference.”

Tower Lane’s land use attorney, Benjamin M. Reznik of Jeffer Mangels Butler & Mitchell LLP in Los Angeles, stated that his client, who has been the target of allegedly unfair and at times vicious attacks by local residents and the media, feels completely vindicated by the court ruling. “The City continues to single out the Saudi Prince with new requirements never before applied to other property owners all in an effort to deny him the right to a building permit. This unfair treatment has to stop,” said Reznik.

Tower Lane Properties is an entity established by Saudi Prince Abdulazziz ibn Abdulazziz al Saud, who is currently the Deputy Foreign Minister of Saudi Arabia, to develop his family residence in the hills above Benedict Canyon. Next door neighbors Bruce and Martha Karsh have been leading and funding efforts to stop the Saudi Prince.

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By Matthew Hinks
The well-known “nexus” and “rough proportionality” tests from the United States Supreme Court’s opinions in Nollan v. California Coastal Commission, 483 U.S. 825 (1987) and Dolan v. City of Tigard, 512 U.S. 374 (1994) do not apply where a condition to issuance of a building permit does not otherwise constitute a taking. So says the California Court of Appeal in Powell v. County of Humboldt, a new published opinion that could potentially limit the reach of Fifth Amendment takings protections for California property owners.

Factual Background

Scott and Lynn Powell own property near the Arcata-Eureka Airport in Humboldt County. The previous owners of the property constructed a covered porch and carport without securing a building permit. In May 2008, the County gave notice to the Powells that unless they secured an “after-the-fact” permit for the porch and carport they would be subject to monetary penalties. The Powells thereafter filed a permit application, which included work to secure the porch foundation and strengthen the structures to bring them into compliance with building codes. The County informed the Powells that, pursuant to a County general plan requirement, the County would require, as a condition to issuance of the permit, that the Powells dedicate an aircraft overflight easement over their property granting the County the right to, among other things, allow flights and noise inherent thereto, and regulate the release of substances, light and electrical emissions, in the airspace over the property.
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by Matthew Hinks
Spot zoning – the practice of singling out a parcel of property for either more or less restrictive zoning regulations – does not always constitute an impermissible abuse of discretion according to a new opinion from the California Court of Appeal in Foothill Communities Coalition v. County of Orange that could potentially alter the way spot zoning is viewed in California.
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At the recent Hotel Developers Forum hosted in JMBM’s Los Angeles office, LA City Administrative Officer Miguel Santana emphasized the City’s commitment to development, particularly of hotels in the downtown area. Santana is the chief financial advisor to the mayor, and his office has direct oversight over the city’s budget, labor negotiations, and development incentives for the City.

“We’re big advocates for hotel expansion in the City,” he said, adding that the City of Los Angeles is willing to work with property owners in a variety of ways to create projects that balance profitability with revenue for the city.
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JMBM Best Law Firm 2014LOS ANGELES – Jeffer Mangels Butler & Mitchell LLP (JMBM) is pleased to announce its land use practice has been selected for inclusion in the U.S. News & World Report / Best Lawyers® list of Best Law Firms. JMBM achieved a number of First-Tier Rankings, including a Metropolitan First-Tier Ranking (Los Angeles) in the area of Land Use and Zoning Law.

“Our clients count on us to successfully guide their development projects through the maze of politics, community concerns, and the law. It’s rewarding to deliver hard-won results, and a pleasure to be recognized for it,” said Benjamin M. Reznik, Chair of JMBM’s Government, Land Use, Environment and Energy Department. “My colleagues at JMBM and I are particularly pleased to be recognized as a Best Law Firm in this area, as it is an honor bestowed by our clients and peers.”
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This session’s California Environmental Quality Act (“CEQA”) reform bill, Senate Bill 743 (“SB 743”) packs a potentially large punch, but only for a narrow group of projects. SB 743 is the brainchild of Senator Darrell Steinberg (D-Sacramento), who made CEQA reform a top political priority for 2013. While Senator Steinberg’s primary objective was to deliver on a promise to NBA Commissioner David Stern to streamline approval of the Sacramento Kings arena project, SB 743 also provides new rules of general applicability that significantly benefit select projects. First, with regard to projects in transit priority areas, SB 743 reduces the scope of CEQA’s impact analysis and may also change the standard traffic evaluation. Second, SB 743 substantially expedites judicial review of so-called “environmental leadership development projects.” Thus, while many will be disappointed that SB 743 does not completely overhaul CEQA, certain project proponents will benefit tremendously from the new rules.
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By Matthew Hinks
Amidst reports of rising home prices throughout California and fears of a new housing bubble, controversial plans floated by California cities to deal with the lingering effects of the mortgage meltdown by invoking their powers of eminent domain are gaining traction. The City of Richmond in Northern California has begun implementing the plan by sending letters to hundreds of holders of underwater mortgages — mortgages on homes that are now worth less than the mortgage amount — offering to purchase the loans at a discount. If the mortgage holders refuse, Richmond’s mayor has indicated that the city will move to seize the loans pursuant to its eminent domain powers.

The idea came to national prominence last year when the County of San Bernardino combined with the cities of Ontario and Fontana to form a Joint Powers Authority to publicly examine proposals to assist homeowners within their jurisdictions who are underwater on their mortgages. The JPA publicly flirted with the use of eminent domain to seize underwater mortgages only to abandon the idea after opposition surfaced.

The Los Angeles Times reports that the City of El Monte is considering adopting a similar plan. Other cities across the country and throughout California, including La Puente, near El Monte, and Orange Cove and San Joaquin in Fresno County, are reportedly doing the same.
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by Neill Brower
An August 5, 2013, the California Supreme Court provided some additional flexibility to local agencies in deciding what conditions properly constitute the “baseline” for analysis under the California Environmental Quality Act (“CEQA”). The decision, Neighbors for Smart Rail v. Exposition Metro Line Construction Authority (“Neighbors”), Case No. S202828, narrowly upholds the environmental impact report (“EIR”) prepared for phase 2 of the Exposition Corridor Transit Project (“Expo Phase 2”) and strikes a middle ground among previous decisions regarding the use of various future baselines. The court ruled, among other things, that although an agency may, in very limited circumstances, evaluate project impacts on the basis of conditions anticipated to exist at the time of certification of an environmental impact report (“EIR”) for the project, or on a hypothetical longer-term future baseline, these cases remain the exception, rather than the rule. If using only a hypothetical future conditions and omitting existing conditions as a baseline, an agency must demonstrate that an analysis based on existing conditions “would detract from an EIR’s effectiveness as an informational document” by providing an uninformative or misleading analysis. In most cases, an agency must still evaluate the impacts of a project in comparison to existing conditions, though nothing prevents additional analysis of long-term impacts, particularly in the context of a cumulative analysis or a “no project” alternatives analysis.
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By Matthew Hinks
Effective environmental review of a real estate development project under the California Environmental Quality Act (“CEQA”) often requires that the approving agency and representatives of the developer work together collaboratively to ensure that environmental review is carried out according to the dictates of the law. However, doing so raises the question of the protectability of communications shared between the developer, the CEQA lead agency and their lawyers. Communications between an attorney and his or her client are privileged and are therefore not subject to disclosure as part of the discovery process or the administrative record in CEQA litigation. But what about in situations where communications take place or are shared among a developer, a lead agency and their lawyers?

A new California Court of Appeal opinion — Citizens for Ceres v. Superior Court — offers a new answer to that question, which will have significant practical implications for property owners and developers engaged in the CEQA process. However because the opinion appears to conflict with a prior Court of Appeal opinion, it is unclear how the rule announced by the Ceres court will get applied in future litigation. Moreover, there is significant question as to whether the Ceres rule will get applied outside of the CEQA context.
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By Matthew Hinks
State density bonus law — one of many California statutes enacted to implement the state’s policy of promoting the construction of affordable housing — has withstood a significant challenge posed by the County of Napa (the “County”) in a new California Court of Appeal opinion, Latinos Unidos del Valle de Napa y Solano v. County of Napa. The Court’s opinion is good news, not only for advocates of affordable housing, but also developers of multifamily housing who rely upon the law, which provides valuable development incentives and is a useful and powerful tool in the permitting process.
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