.sf l j
633 West Fifth Street
64th Floor
Los Angeles, CA 90071
213.557.7222
www.rpnllp.com RAND I PASTER I NELSON
September 6, 2023
VIA EMAIL
Heather Baker
City of Culver City
City Attorney
[email protected]
Re: The Meadows Vested Rights
Dear Heather:
Elisa Paster
213.557.7223
[email protected]
Our firm represents the owner (the "Owner") of the apartment building located at 6300 Green Valley Circle ("Meadows Apartments" or the "Meadows") in the City of Culver City ("City"). The Owner is a family owned and operated company that obtained permits and constructed the Meadows in 1974 and has operated it ever since. It has deep roots in the community and is committed to being a good corporate citizen.
Given the age of the buildings and the reasonable life of the infrastructure installed when the Meadows Apartments were constructed, the Owner undertook a comprehensive infrastructure replacement and improvement program starting in 2016. To date, the Owner has invested over $19.7 million on infrastructure, roofing, plumbing, electrical, mechanical and other construction (together, the "Improvements") at the Mea dows in re liance on the appro x imately 10 0 building permits' issued by the City between 2016 and 2019 (the "Building Permits"). While a significant portion of the Imp rovements is complete , work to connect the e x terior infrastructure to the buildings in the Meadows N orth is outstanding, largely because of the interr uptions caused by the Covid-19 pandemic.
The failing infrastructure inside the Meadows N orth is causing significant dam age to the building and disruptions to tenants. It is critical that the Owner be able complete the Improvements , starting no ear lier than March of nex t year (as promised to the tenants). C ompletion of the work w ill re quire that tenants on the first floor of the Meadows N orth to vacate their units. The Owner is com mitted to w orking with tenants in a compassionate and professional manner on permanent relocation within the Meadows consistent with the spirit and intent of the City's R ent Control Ordinance (Ordinance No. 2020-014) and Tenant P rotections Ordinance (Ordinance No. 2020-015) (together, the "RCO") that w ent into e ffect on October 30, 2020 . Indeed , the plan proposed by the Owner complies with substantially all of the terms of the R CO. However, the Owner secured vested rights prior to the adoption of the RC O (indee d, its rights vested even be fore the adoption of the urgency ordinance in 2019 that preceded the R CO). As such, the strict letter of the R CO is inapplicable to the Mea dow s. 1 This number has been updated to more accurately state the permits issued by the City.
Heather Baker
September 6, 2023
The Owner cares about its tenants and has developed a plan that provides tenants with almost of all the protections under the RCO, while still maintaining and protecting Owner's private property rights.
While this plan is not what the Owner had in mind when it undertook the comprehensive infrastructure upgrade in 2016, the Owner is willing to make compromises that allow it to fix a significant portion of the underlying problems while complying with the spirit and intent of the RCO.
We urge the City to accept this compromise, one that will not set precedent for other buildings as the facts in this case are unique, and that will provide significant tenant protections. Should the City reject the compromise and abrogate the Owner's vested rights, the Owner will have no choice but to pursue all of its legal remedies in court. The Owner would much prefer to spend its resources on tenant relocation within the Meadows instead of on litigation costs. However, if the Owner is forced to seek relief in court, the offer to assist tenants as outlined herein will be a thing of the past. The loss of the benefits offered to the residents will be the fault of the City. As such, we hope that the City will agree to the Owner's offer to settle this matter, and to avoid both the substantial risk and potential damages that would result from litigation, and damage to the Meadows residents.
1. The Owner Has Spent Approximately $19 .7 Million To Upgrade The Meadows , $17.6 Million Of Which Was Expended Prior To The Adoption Of The RCO.
The Meadows is comprised of two areas, the "Meadows North" and the "Meadows South". (See Exhibit A, Map.) Between 2016 and 2019 the City issued the approximately 100 Building Permits for the Improvements, which permits cover both the Meadows N orth and the Meadows South. The Owner commenced work and spent over $19.7 million to date in reliance on the B uilding Permits. The aging infrastructure for the Meadows Apartments had come to the end of its useful life, and the Im provements were (and are) necessa ry. The Improvements consisted of first installing new water, sewer a nd gas lines, as well as new AT& T data /communication infrastructures throughout the entire complex. This consisted of digging trenches for the water, sewer, gas and data /communication lines and installing the lines, along with asso ciated ea rthmoving, landscaping, engineering, legal, design and other work. The Owner undertook this work in phases, as shown in Exhibit B . By Aug ust 20 19, all of the exterior site infrastructure work needed for the entire Meadows complex was complete. At this time, additional building infrastructure upgrades such as the installation of some new roofing, some new ro of gas lines/gas submeters, new in-unit subpanels, breakers, feeders and the installation of new motion/humidity sensor exhaust fans in all unit bathrooms was also completed. The Owner expended approximately $7.8 million on this work for the Meadows N orth, alone prior to the adoption of the RCO .
Starting in June of 2019, as the exterior site work on the Improvements was close to completion, the Owner commenced the work to connect the exterior infrastructure to each of the units. This too occurred on a phase d basis, sta rting with the Meadows South. The interior work at the Meadows South required the units to be vacated , as large trenches were built in the interior hallways and the interior walls and floors of the units were largely demolished to replace interior plumbing pipes and electrical lines, as sho wn in Exhibit C. The Owner also installed new dryw all, paint, flooring, appliances, and finishes for the units in the Meadows South. The interior of all of the units in the Meadows South were completely renovated at a total cost of approximately $9.8 million. When the residents were displaced at the Meadows South, the Owner provided substantial relocation benefits or move -out incentives, even though it was not required to do so under any state or local law, nor did the City require it to do so ..
Due to the Covid-19 emergency, the Owner shifted its plans and continued with any work on the Mea do ws N orth that could be done without displacing tenants. This wor k included finishing the remaini ng Heather Baker
September 6, 2023
new roofs and new roof gas/gas submeter installations for the entire complex. As of the date of the adoption of the RCO, the Owner spent approximately $7.8 million on the Meadows North (79.1% of all costs to date for the Meadows North). Another $2.1 million has been spent since then, for a total of approximately $9.9 million expended for the Meadows North.
2. As A Matter Of Law, The Owner Has Vested Rights To Com p lete The Imp rovements In Accordance With The Pre-RCO Re gulations.
The Owner has vested rights to complete the Improvements in accordance with the pre-RCO rules.
As noted in the seminal case of Avco Community Developers, Inc. v. South Coast Reg'l Comm'n (1976) 17 Cal.3d 785, 791 "if a property owner has performed substantial work and incurred substantial liabilities in good faith reliance upon a permit issued by the government, he acquires a vested right to complete construction in accordance with the terms of the permit." (See, also, Pardee Construction Co. v. California Coastal Com. (1979) 95 Cal.App.3d 471 [developer not sub ject to the newly implemente d Coastal Act w hen it expended substantial sums on its development in reliance on permit s issued prior to the Coastal Act ev en thou gh devel opment was delayed due to an economic downtu rn]. This means that changes to the law made subse quent to the time of vesting are inapplicable. Moreover, when outstanding work authorized by a building permit, but upon which no actual construction has commenced, is so interdependent on work already com pleted pursuant to those permits , an owner has vested rights to complete that work in accordance with the rules and regulations applicable when the permit was issued.
Sierra Club v. California Coastal Zone Conservation Commission (1976) 58 Cal.App.3d 149 (work commenced prior to the adoption of the Coastal Act was su fficient to vest developer 's rights to finish the work in accordance w ith the pre-Coastal Act rules because the work was su fficiently interdependent ).
For the Meadows, the Own er exp ended approximately $17.6 in reliance on the approxim ately 1 00 p ermits issued prior to the adoption of the RCO. In particular, the Owner comp leted all of the exter ior infrastructure work for the Meadows North as of 2019. The Owner cannot use that infrastructure until the interior work in the Meadows North is completed. Put another way, the Owner has expended $7.8 m illion on work for t he Meadows N orth in reliance on its permits wh ich is s itting unused and dormant.
This is a clear cut case of vested rights under the law.
3. The Owner Is O ffering A Com p romise That Protects Tenants And Com plies With The Spirit And Inten t Of The R CO.
Although the Owner has vested rights to complete the Improvements without compl ying with the RCO , the Owner is commi tted to a tenant benefit and relocation package that complies with the spirit and intent of the RCO. Note, the Owner 's original plan for the Meadows North was the same as the Meadows South - to complete the interior improvements for the units on a phased building-by-building basis in w hich the construction for all of the units in a single building would be completed together. Then , the com pletely reno v ated units would be offered at market rent, taking into account the substantial improvements to those units. The original plan would have resulted in the displacement of 573 households over a four to five year period.
However, the Owner understands that the residents have significant concerns about potential dis placement and has develo ped a plan that b alances the need to up grade the building infrastructure that is causing damage to the bu ilding and disruption to residents. In particular, there is a need to replace the Heather Baker
September 6, 2023
Page4
interior infrastructure and provide connections to the exterior infrastructure on the first floor of the buildings at the Meadows North. Thus, the Owner proposes the following settlement and compromise:
• Residents of first floor units at the Meadows North will be relocated to a like apartment on the second and third floors of buildings within the Meadows North. Thus, if a resident lives in a one bedroom apartment, they will be relocated to a similar one bedroom apartment elsewhere in the Meadows North .
• Relocated residents' rents in the like apartment will remain the same as their current rent (with yearly increases permitted by the RCO). Thus, residents will not experience any immediate increase in rent in their new apartment.
• The Owner will pay the reasonable moving costs to relocate first floor residents from their old apartment to their new apartment.
• If, instead, a current first floor resident wants to leave the Meadows North permanently, the Owner will pay to that resident a relocation fee of three months rent plus $1,000, in accordance with the RCO .
• The Owner will make reasonable accommodations to all residents to minimize disruption during construction. The Owner will also regularly communicate with all residents regarding the construction schedule and potential disruptions. • Renovation of second and third floor apartments will occur on a unit-by-unit basis when those un its become vacant in the normal course of business. • Residents on second and third floors will not be asked to permanently vacate their units for the purpose of completing the Improvements, though some work will be required in 2" and 3 floor units and some inconvenience incurred.
This settlement and compromise complies with almost all of the requirements of the RCO, except that first floor residents will not have the right to return to their units at their current rent . First floor residents will be able remain at their second or third floor apartments at their cu rrent rent (w ith p ermitted RCO ye a rly increases).
Th is settlem ent an d compromise is a significant co ncession on Ow n er's part. Based on its vested rights, it has no obligation to relocate the residents at the Meadows , to pay them three months plus one thousand do llars of reloca tion fees, or to allow them to continue living at the Meadows at their current ren t. M oreover , this app roach in w hic h the second and third f loor units are renovated on a piecemeal basis will be significantly more costly and slower for the Owner. H owever, the Owner is co m mitt ed to working together with the residents and the City to minimize displacement and disruption.
W e urge th e C ity to accept this settlement and compromise which complies with the spirit and inten t of the RCO. Indeed, it co m plies with substantially all of the req uirements of the RCO. If th e City instead rejects this o ffer and ab rogates the Owne r's vested rights, the Owner wi lt have no cho ice b ut to pursue litigation against the City . Such litig ation would result in sig nificant financial dama g es to the City, as the M eadows wou ld seek to rec over all of the costs of the infrastructure already constructed and laying Heather Baker
September 6, 2023
dormant, along with other damages incurred by the Owner. Moreover, the resident benefits offered herein would be null and void. If the City rejects this offer, it will create a substantial hardship for the residents that could otherwise be avoided.
We look forward to working with the City to create a win-win compromise.
Sincerely,
Elisa Paster
Managing Partner
of RAND PASTER & NELSON, LLP
EP
Attachments
cc: John Nachbar, City Manager
Christine Burrows, Assistant City Attorney
THE MEADOWS
APARTMENT HOMES
6300 Green Valley Circle
Culver Ciy, CA 90230
www.MeodowsApts.com
leasing Ollice Resident Services Ollice
(310\ 4178138 (310) 670-5983
FAX: (310) 670 0123
$
t 1
@ t
A
re
wC
t re
»o
rs
--
C
5 "Ci'
2 rn
E
6 "' £:
0 u
t [ 11 } hill
#
if ilk tr [#! {ii; : ti
ji, "
:/It
ii silt #ii ill
hi# i;
i'
'11 ,lk;
e E IIIi
t ·
u • £ z
,:j ...
8 E
c
• e 2<
0 "1
t
£
0 u
i k,le 'i
{if ## Mk;
;
l iil
gi} te :
l ti
u
£ 3 d
2 ...
"' 5=
'.'S: ,
0 • G
�
0 u
% Bldg 2/6420
Meadows North
Site Exterior Re-pipe
New Copper Sleeves
All new sewer and water pipes were
installed up to the entry of each
building waiting to be brought into
the building hallways and interiors
Meadows South
New Sewer/ Bldg. 13 Hallway
Photos of the old sewer line being removed,
and the new sewer line being installed down
the center of the building hallway with
connections to each stack of units
Old Sewer Pipe
t
Meadows South
15 Floor Excavation / Bldg. 13 Existing Conditions
Photos of the demo
and examples of the
existing pipe conditions
exposed underground
in unit interiors
Wires lose in the ground -
conduit corroded over the year
+%
Meadows South
15 Floor Excavation / Bldg. 13 Unit Trenches
Photos show the level of trenching
needed inside 1· floor unit interiors
to make all the new pipe connections