CITY  COUNCIL – Project Verandas is reconsidered, and approved 

A rendering of Project Verandas. Courtesy Highrose El Porto LLC

by Mark McDermott 

Project Verandas, a 79-unit residential development proposed on Rosecrans Avenue, was approved by the City Council in a special meeting last Thursday.

The council approved the project in a 3-2 vote after rejecting it in another 3-2 vote last October. Project Verandas includes six low-income units, which under a state law intended to address California’s housing shortage qualifies it for a streamlined, ministerial review process. This process does not include usual council discretion. Councilperson David Lesser summed up the ambivalence voiced by his colleagues during the voting roll call. 

“Reluctantly,” Lesser said, “yes.”  

The special meeting, which contained only Project Verandas on its agenda, was convened after the City received warnings from the State of California and a lawsuit from the developer, as well as three pending lawsuits from non-profit housing advocates. 

This was also a different council than the one that rejected the project last year. Lesser and Councilperson Amy Howorth were elected in November, replacing councilpersons Suzanne Hadley and Hildy Stern. Hadley had opposed the project, while Stern voted for it. But Howorth at the outset of council deliberations emphasized that neither she nor Lesser had moved to bring the project back for renewed consideration. 

“That’s just not true,” Howorth said. “That would mean that I or David had request that this come up again, and that’s not the case. We’re hearing it because of the actual lawsuit and the letter from the state. It was a council decision to bring us back.” 

The State of California’s Department of Housing and Community Development (HCD) sent a letter to City Manager Bruce Moe on November 28 that said the agency had monitored the City Council’s deliberations, and analyzed the council’s rationale for rejection. The letter said the rejection was a clear violation of both the Housing Accountability Act (HAA), and the State Density Bonus Law, and gave the City 30 days to respond before the case is referred to the California Attorney General’s office. 

“The City’s response should include, at a minimum, a specific plan and timeline for corrective action, including (1) the repeal of the City’s resolution denying the Project, and (2) the reconsideration, and approval of the Project as proposed,” the letter said. 

The developer, Highrose El Porto LLC, filed suit against the City in early November. The lawsuit alleges that the City broke state laws and violated local zoning and the developer’s property rights in what amounted to a taking of the property through inverse condemnation. It seeks to force the Council to either approve the project or pay an estimated $52 million in damages, in addition to legal fees. 

“Governing bodies of cities, and counties are charged with the responsibility of faithfully executing the laws of the United States, and the State of California; they are not ‘fiefdoms unto their own,’” the lawsuit said, referencing a legal precedent. “In this case, the City ran roughshod over the Rule of Law, and violated the constitutional rights of a private property owner/developer, who only seeks to follow the very rules the City clearly set out for it.” 

The City also received a warning in November from three non-profit housing advocacy groups, who through the state’s Housing Accountability Act have standing to sue cities and recoup legal fees in such lawsuits. A letter, from Californians for Home Ownership, YIMBY Law, and the California Renters Legal Advocacy, and Education Fund (CaRLA), said the organizations are “devoted to using impact litigation to address California’s housing crisis.” 

“In recent litigation against the City of Huntington Beach, the City was forced to pay Californians for Homeownership, CaRLA, and the applicant $600,000 in attorneys’ fees after being ordered to approve the project at issue there,” the letter says. “Huntington Beach, like Manhattan Beach, based its rejection on illegitimate, pretextual health and safety concerns.” 

This month, the organizations sent a new letter, making clear that each non-profit would file its own lawsuit against the City. 

The 96,217 sq. ft., four-story project is located on Rosecrans Avenue, just above Highland, at the former Verandas site, an event facility; and the current Tradewinds commercial building. Development at the site has been in the works for years. Developer Frank Buckley has been involved since 2016, while other developers have also fallen in and out of escrow, with earlier iterations seeking a hotel development. Former Community Development director Carrie Tai issued ministerial approval on March 29. On June 8, the Planning Commission considered four appeals that attempted to overturn the project’s approval. The Planning Commission, however, likewise had limited purview over the project, assessing mainly its compliance with the law, hence its unanimous approval. The project was then appealed to the Council, which began its consideration in August before arriving at its rejection in October. 

Project Verandas faced staunch opposition from hundreds of residents who wrote and spoke against it at previous public hearings, as well as an organization called Chill the Build which offered a pathway to challenge state law. Most opposition concerns centered around Project Verandas’ proximity to the Chevron oil refinery, which is located on a hill above the site, just across the El Segundo border. The proposed legal challenge was outlined by Northwestern legal scholar Martin Redish in a letter to the Council in October. His argument was based on residents’ Constitutional due process rights, and his law firm offered to represent the City pro bono. 

“The constitutional issues here are quite clear. Manhattan Beach needs to fully consider the health and welfare concerns of its residents,” Redish wrote. “ A construction project taking place next to an active oil refinery is rife with danger and fraught with potential disaster…Failure to conduct a full environmental review in light of the specific facts of this matter is not only reckless; it is highly likely to violate the due process rights of the citizens of the community and therefore be enforceable in court.” 

Mayor Steve Napolitano, who was the dramatic third swing vote in October, joining Hadley and Councilperson Joe Franklin in opposition, likewise based his rejection of Project Verdandas on environmental concerns. He made reference to a state law which was not yet in effect at the time, AB 2011, which contained a provision that affordable housing sites much not be located within 3,200 feet of refineries. Napolitano acknowledged the law did not directly govern Project Verandas but said the scientific studies underlying its reasoning did. 

“I highly doubt the current housing that exists so near to Chevron would be built there today given the specific adverse impacts of the known pollution generated there,” Napolitano said at the October 18 council meeting. “And for that reason, additional housing near Chevron should be avoided, as the risks cannot be mitigated.”

But at last Thursday’s meeting, both acting Community Development Director Talyn Mirzakhanian and City Attorney Quinn Barrow laid out reasons why rejecting the project on environmental grounds had no sound legal basis. 

The City cannot reject such a project, Mirzakhanian said, unless it has “significant, quantifiable, direct and unavoidable impact made upon the public health or safety” based on the stringent standards outlined in the state’s Housing Accountability Act (HAA). 

“To date, no such adverse impact arising from the project has been identified by the appellants or the public, and the proximity to Chevron is not considered a significant quantifiable, direct and unavoidable impact resulting from the construction or operation of the project itself,” she said. 

Mirzakhanian said the developer complied with the law by conducting initial environmental assessments. 

“And that included nine borings, 21 soil samples, multipole soil and vapor samples,” she said. “Again, the assessments concluded that there there was no significant environmental concern to the site at this time.” 

Those stuides, called Phase I and Phase II Environmental Site Assessements (ESA), are performed by third party experts and adhere to Environmental Protection Agency protocols. Barrow noted that the Phase II assessment was performed in 2020 and ongoing assessments would be part of any construction process. 

“I would not describe this property as an inherently unsafe,” Barrow said.  “In fact, they’ve done the Phase I and the Phase II [assessments] and found no condition…There’s no impact from Chevron that has somehow migrated after that Phase II. But the most important part about this….there’s several environmental protections during construction, so if they find something that Phase II didn’t find, then construction stops.” 

Barrow was questioned by Lesser regarding the precedent that approving this project might set, following up on concerns from residents that Project Verandas would open the floodgates to similar projects. Barrow responded that the ministerial review for this project was not just state law, but actually written into the City’s own Local Coastal Plan adopted by the City Council in 2013. 

“I don’t know if it’s reassuring, but this has been on the books since 2013,” Barrow said. “This is the first project. It’s similar to the SB 9  issues that were of considerable concern last year —  that people were going to be able to subdivide their single family houses into four units. And at that time, the Community Development Director did an analysis of the City and said that can only happen in about 3 percent of the properties in the city, but we haven’t received any SB 9 applications. So back to precedent — there’s no precedent…Whatever happens on this property is not going to have any influence on other properties.” 

Franklin, who began the night with a statement saying that he had an open mind regarding the project, said that after three hours of reports, new testimony, and discussion, he’d heard nothing that changed his mind from his no vote in October. 

“Fundamentally, there is nothing that I see that would make me change my opinion and vote from before,” he said. 

Montgomery likewise said he’d heard nothing that changed his mind from his yes vote. He said although he preferred a hotel at the site, it was “a simple decision” to approve Project Verandas because no City has successfully challenged state law, and attempting to do so presented too much risk with too little chance of success —  a risk that included not only millions of dollars, he said, but loss of local permitting powers. 

“In my mind, let’s not risk $50 million that could be spent on police or fire or roads, or the Scout House Community Center, and give others all that money,” Montgomery said.  “…I’ll make it clear. I’m not going to risk the money. I’m not going to risk what happens when our city loses control of our permit process.” 

Montgomery made the motion to approve the project. 

Howorth said that when Napolitano based his opposition on the studies underlying AB 2011 back in October, she thought it was a clever approach and hoped that might be a plausible route to legally oppose the project. 

“But the letters in the state indicate that that reasoning is not defensible,” she said. “So because of that decision to deny the project… It’s not a threat of action by the state, so it’s no longer a theoretical question. We now have three lawsuits challenging the city’s denial that have been filed, and the city’s Housing Element is under review by the state. So I I can’t in good conscious make a decision… that exposes the city to a protracted and wildly expensive legal fight. We will not win it, and I can’t give a state a reason not to approve our housing element because that’s going to take away our ability to enforce our own zoning, so it isn’t local control. All bets are off that. So I’m holding my nose, because I’m following the law, and I feel that I am preventing an even worse fate for this city.” 

Lesser said he did not like the project but saw no way to effectivey oppose it. 

“The challenge is separating we would like the law to be from what it is in fact,” he said. “The state has dislodged local jurisdictions like us from the ability to entitle projects just like this. You’ve heard we do not have discretion on this project…They have weaponized the state law such that there is huge liability and new equitable remedies not just to developers, but to third party organizations that can bring their own suits and get legal fees for their lawyers to boot. There’s also an attorney general strike force that’s looking for cases like this and then similar ones has injected itself into the action and forced cities to move forward.” 

“Under the circumstances, under the state law, I see no other choice other than to support this project for the benefit of our community and its residents, because of this significant liability that we face if we don’t.” 

Napolitano said in his previous denial he didn’t cite specific studies showing adverse impacts of living near a refinery because he didn’t think this was in dispute. 

“A 2020 study by the National Library of Medicine shows statistically significant increased risk of all types of cancer for those living close to an oil refinery,” he said. “A 2022 Yale study said there’s an increased risk of stroke for folks who live close to a quote in close proximity to a refinery. There have been statements made by the National Hispanic Medical Association. The University of Texas did a recent study and found a clear connection between the distance people live from refinery and the increased rate of all cancer types. Going back to 2005, the California Air Resources Board resources air quality board said in their land use handbook they recommended avoiding siting near refineries and longterm residential is a sensitive use. So there is plenty to consider.” 

Napolitano also argued that the very fact that the project was allowed, under state law, to be appealed, meant that the council had the power to reject it. 

“That in itself is discretion,” he said. “Decisions can be made. And I understand that folks think their hands are tied and again, I while I disagree with that conclusion, I respect the fact that you have [made that decision], and for the reasons that you have.” 

“There is no perfect decision that is going to be made here,” the mayor said. “Everybody is voting for what they feel is best for the community.”


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