DEVELOPMENT – Manhattan Beach City Council rejects Project Verandas in 3-2 vote

A rendering of Project Verandas. Courtesy of Project Verandas

by Mark McDermott

Project Verandas, the 79-unit residential development proposed along Rosecrans Avenue in El Porto, was rejected by the City Council in a 3-2 vote Tuesday night. 

Mayor Steve Napolitano cast the deciding vote. Napolitano had remained silent on the issue since the Council began deliberating, in August, on the five appeals to the Planning Commission’s approval of the project. In a dramatic turn of events following another night full of passionate testimony for and against the project, Napolitano rejected most of the reasons the project’s opponents had urged for its denial, including its alleged lack of fit with the character of the town, which he said was not at issue. He also acknowledged the potential legal peril the City would put itself in by rejecting the project.  

“People are lining up to sue us,” Napolitano said. “And that’s fine, some will say. But not if we don’t have a leg to stand on. To deny this project because a lot of people don’t like it is like bringing a spoon to a knife fight. It just doesn’t work. And all the wishing and gnashing of teeth won’t change that. As I’ve said all along, we need a legally defensible reason to deny this project.” 

At least a dozen housing rights groups have indicated a willingness to litigate should the City deny the project, which includes six low-income housing units and thereby qualifies for a streamlined, ministerial approval process under the state’s bonus density laws, meant to encourage such housing. Additionally, the state itself has paid special attention to the project. Both the California Department of Housing and Community Development and State Attorney General Rob Bonta sent the City of Manhattan Beach letters outlining Project Verandas’ compliance with state laws, and indicating the state’s intention to enforce those laws.

Napolitano also rejected the most recent argument the development’s opponents have raised, an argument that a newly enacted state law, AB 2011, gives the City legal cover to reject Project Verandas. AB 2011, which was signed into law by Governor Gavin Newsom on September 28, is intended to streamline approval for affordable housing projects on commercially-zoned lands and mixed-use in commercial corridors as long as the projects meet affordability and environmental criteria. Among that criteria is such projects cannot be within 3,200 feet of oil refineries.  Project Verandas, located on the former site of the Verandas event facility and the current Tradewinds office building, is within 3,200 feet of El Segundo’s Chevron refinery. 

A City staff report said that AB 2011 would not alter the project’s ministerial approval process because in such cases it refers back to the City’s own underlying process for such projects, which are also ministerial, meaning the Planning Commission and City Council do not have the power to make decisions based on anything but state law. Napolitano noted that AB 2011 also does not go into effect until next year. 

“Unfortunately, despite all good intentions, our local review process was changed in 2013 to a ministerial review as well,” the mayor said. “Plus AB 2011, which doesn’t take effect until next year, can’t be applied retroactively to this project. Which leads us back to only being able to deny the project based on specific adverse impacts.” 

City Attorney Quinn Barrow said that the preliminary “phase one” and “phase two” environmental assessments performed by consultants hired by the developer had adequately demonstrated that the project would have no adverse environmental impacts, and in any case, requirements throughout the construction process, including soil sampling, would provide safeguards against any such potential impacts. Barrow said that in order to reject the project in a way that would hold up in court, specific evidence of negative environmental impact would have to be found. 

“Typically, when you have a project…where you have experts providing traffic studies, and phase one, and phase two [environmental assessments], and there’s also a concern among residents, and it’s a reasonable concern,” Barrow said. “But when courts are looking at evidence, you’ve got an expert and then you’ve got no evidence that counters what’s in the phase one or phase two [assessments],” Barrow said. “What you have is a fear that there might be something there that hasn’t been discovered.” 

Napolitano was the last of the five members of council to speak on the matter. He began his remarks by defending himself against allegations from project opponents that he had a conflict of interest, because some of his work as an attorney includes contracts from the state. Councilpersons Joe Franklin and Suzanne Hadley had come out against the project, while councilpersons Hildy Stern and Richard Montgomery both argued that the City could not legally reject it. As Napolitano methodically shot down most of the rationale argued by opponents  for denying the project, Project Verandas appeared on the cusp of approval. And then Napolitano took a legalistic U-turn, saying that while AB 2011 could not be used as a reason to reject the project, the underlying rationale of the law could. 

“Where AB 2011 is informative, however, is not necessarily in the language of the law itself, but the basis upon which it was put forward and adopted,” he said. “And for that reason, I incorporate the entirety of the legislative record for AB 2011 into my decision, as well as the court decisions and other studies that support the idea that allowing people to dwell adjacent to known sources of extraordinary pollution, especially air pollution, is a specific adverse impact that must be mitigated by extended buffer zones. It’s no accident that AB 2011 talked about 500 feet setbacks from freeways or 3,200 feet from refineries. There are studies that support this.” 

“So contrary to the conclusion of the developers’ environmental site assessments that the Chevron site does not represent a significant environmental concern, substantial evidence has existed for years that Chevron is a major polluter for our region,” Napolitano said. “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. And for that reason, additional housing near Chevron should be avoided, as the risks cannot be mitigated. Something will go there sometime. There will be traffic. There will be other impacts. But it shouldn’t be housing.” 

Stern and Montgomery made a motion to uphold the Planning Commission decision, but it failed and was replaced by a resolution rejecting Project Veranda, which passed 3-2. 

Montgomery warned that rejecting the project would almost certainly cost the City a sizable chuck of the $20 million in reserves that are intended for infrastructure and emergencies. He said the City would stand almost no chance of winning this legal fight, and would incur the full wrath of the state in evading its housing laws. 

“I cannot in good conscience agree, after going through the recession in ‘08 and ‘09, to spend all that money on a case we cannot win,” Montgomery said. “And the second risk that nobody’s talking about it [is that] when we lose this case, and the state will beat us, we will lose….the Attorney General of California sent us a letter saying, ‘I am watching this.’…That guy will run down here tomorrow, stand in front of City Hall, and say, ‘I am protecting California. Here’s a city that won’t allow low income housing. And folks, you know he can take over permitting in our city. The Attorney General can take over all of that and stop permits in our city. So you are a homeowner with renovation plans? Wake up.” 

“This is not what I wanted,” Montgomery said. “I wanted a hotel and retail… I will vote yes for this project, and not subject us to losing millions of dollars and 13 lawsuits that I know of that are on our docket.” 

Stern said to vote in defiance of state law would violate the oath she took when sworn into office. 

“As an elected official, that would be a violation of my duty, and that would be a violation of my colleagues’ duty to just say, ‘I’m going to defy this law.’ And you know, I stood with Councilmember [Suzanne] Hadley four years ago, in April of 2019, and we raised our hand and we said we will uphold the Constitution of this country, and the laws of the state, and the laws of the city. So if we’re being asked to just stand up to Sacramento and defy the law, I can tell you that I will not do that. That is a complete dereliction of my duty as your elected official. And I don’t want to see anybody in the city that I live in who is going to pick, and choose what laws they want to follow.” 

Hadley, who is suffering laryngetis she attributed to campaign speaking, was unable to comment. Franklin argued that the character of Manhattan Beach was at stake. He upbraided the developer, Frank Buckley, for not collaborating with the community but instead using state law to try to impose the project. 

“We have great residents,” he said. “There’s a great reservoir of talent and knowledge and expertise that we could bring to this project and make it so you don’t have to face this kind of vitriol. But that’s why you’re facing the vitriol and objections…Because we didn’t get our input. Because we also love the city and [if the project were approved] we’re disrespecting the people who came before us. What made me come here 30 years ago? It was the beautiful city that the families 30 years before and 50 years before had made. I respected that and want to maintain it. Why would you go and ruin what made you come here, what attracted you, in the first place?” 

Buckley declined comment after the council’s decision. But in August, Buckley indicated he would fight a rejection of the project in the courts, and said that Project Verandas will be built, and that it will be built exactly as proposed.

“Anyone who really does the diligence to understand knows the fate of cities that tried to uphold these appeals,” he said. “And recognizes that no city has prevailed, to date.” ER 

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