By Jason Islas
Staff Writer
January 9, 2013 -- Unless the City overturns a decision to rescind a development agreement for the Village Trailer Park, developers will seek more than $50 million in damages and immediately shut down the park, according to a lawsuit filed in Superior Court Monday.
The lawsuit comes one month after the City Council voted to reverse its decision to grant a development agreement for a project that had been in the works for more than six years.
“I believe that the City Council knows full well that the action at the December 11 hearing cannot undo the City’s commitments,” Village Trailer Park Co-owner Marc Luzzatto told The Lookout Tuesday.
The suit maintains that the action was illegal because, though the Council has 31 days after an ordinance approving a DA is passed to change its mind, it must follow the same steps required for passing the ordinance.
An ordinance must go before the Council twice, for a first and a second reading, before it is approved.
The petition claims the park has been losing money for more than a decade at the expense of Luzzatto and his partners.
“The City's withdrawal and recission... caused significant injury to VTP,” the petition reads, adding that much time and money had been put into the DA process, which has stretched on for over six years.
“It’s just not fair to lead us down the path for six years and cause us to spend huge sums of money and lose so much money operating the park and then take away the City’s agreement,” Luzzatto said.
Boyd Hill, an attorney with Hart, King & Coldren, is representing Luzzatto and his partners.
Hill wrote that though the exact amount VTP has been damaged would be determined in court, it could be “as much as $50 million or even significantly more.”
“We spent six years working to satisfy the concerns of all constituencies. We would prefer that the City honor its commitments so that we do not have to pursue litigation,” Luzzatto said. “I do believe that there is an achievable resolution and we will work toward it, but time is critical.”
The petition also claims that the December 11 decision was a breach of a Memorandum of Understanding (MOU) that Luzzatto and his partners entered into with the City in 2006 in order to avoid immediate closure of the park.
Under California State law, the owners were required only to give 12 months notice and pay the tenants the City's minimum relocation fee.
According to the Municipal Code, the City requires that for every tenant who must move from a single or studio unit, the owner must offer $7,900 compensation. If the tenant is elderly, disabled or lives with a child, the amount is $9,050.
The DA included several relocation packages available to the 36 residents still residing at the park.
One option available to residents was that Luzzatto and his partners would “purchase, install, and transfer title to resident a manufactured home that is reasonably similar architecturally to those previously approved by the ARB (Architectural Review Board),” according to the DA. Those units then would be moved to the City-owned Mountain View Trailer Park.
The DA also stipulated that Luzzatto and his partners would donate part of the land to the City so that up to 10 trailers could remain on the property.
If the DA is scuttled, Luzzatto and his partners will still close the park, only without the relocation options put forth in the agreement.
The motion to reconsider the DA on December 11 was placed on the agenda by Council member Kevin McKeown who said that the approved project did not have enough affordable units.
He believes that there should be at least 49 affordable units. The DA rescinded on December 11 had 16, down from 44 in the previous iteration of the plan.
The revision was made after a new plan was drawn up in response to the Council's request that the developers try to keep some trailers on the site.
The December 11 meeting was the first meeting of a newly-elected Council and McKeown's motion received support from the two newest Council members, former Planning Commissioner Ted Winter and Tony Vazquez.
McKeown's motion also got the support of Council member Gleam Davis.
