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Santa Monica Council Ponders Options to Deal with Non-Compliant Developer

Santa Monica Real Estate Company, Roque and Mark

Pacific Park, Santa Monica Pier

Harding Larmore Kutcher & Kozal, LLP  law firm
Harding, Larmore
Kutcher & Kozal, LLP

By Jonathan Friedman
Associate Editor

January 30, 2015 -- For the second consecutive year, the drug company Agensys has not met its end of a development agreement (DA) with the City regarding the property at 1800 Stewart Street. Frustrated City Council members learned Tuesday night that litigation is an option if non-compliance continues.

“At the end of the day if they were in default, my recommendation would be particularly if it didn’t appear they were making any progress toward getting out of default, I suppose the City could sue them,” City Attorney Marsha Moutrie told the council.

She later clarified that her comment was not a recommendation because the City “wouldn’t be well-situated in court unless you could clearly establish the default,” but rather that this move would be one of last resort.

Mayor Kevin McKeown responded that he hoped City staff “will think more about [litigation]” as a method against those who are not in compliance with development agreements.

He added, “To hear for the second consecutive year [from City staff] ‘well, discussions are ongoing,’ that doesn’t solve the problem, and I think we need to treat this as a problem worthy of solution.”

Agensys agreed to various so-called public benefits in exchange for development perks in its agreement with the City that was approved by the council in 2010 (See “Council Approves Agensys Deal, Mayor Objects,” September 20, 2010).

In a report that was before the council on Tuesday, City staff said the company had not met its obligation of creating limited net total vehicle trips. 

Vehicle trip limitations is a feature of many development agreements because traffic congestion has been deemed a problem by many activists and government officials in Santa Monica.  

City Council member Ted Winterer called Agensys’ lack of compliance “troubling.”

He added, “I am philosophically concerned that we have written into this DA a requirement that’s not being met.”

Winterer made a motion that Agensys not be given the designation of operating in good faith, and give this label to the owners of 15 other development projects included in the report. 

He backed off this motion after hearing comments from Councilmember Pam O’Connor.

“I wouldn’t label them as not operating in good faith yet,” she said. “I’d hesitate [to do that], we’re trying to work with them.”

Winterer said he understood what she was saying, and changed his motion to include all of the developers as working in “good faith,” which was approved by the full council.

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