ATTACHMENT O
FISH HOUSE VERA CRUZ AND LENNAR
UPDATES ON PARKING ISSUE RESOLUTION
1 Sean del Solar
Subject: RE: OCRR/FHVC Parking Issue Resolution
From: Wilson, Steve <[email protected]> Sent: Tuesday, December 5, 2023 6:31 PM
To: Alex Plishner <[email protected]>; Isaac Etchamendy <IEtchamendy@san‐marcos.net>; Michelle Bender <MBender@san‐marcos.net>; Ryan Green <[email protected]>; Sean del Solar <SdelSolar@san‐marcos.net>; Joseph Farace <JFarace@san‐marcos.net>; Scott Nightingale <snightingale@san‐marcos.net>; Kyrenne Chua <kchua@san‐marcos.net>; rexbutler@ ; butler2smiley@ ; rjbutlerusa@ ; Ho, Yin <[email protected]>; Ozolins, Diana <[email protected]>; Stephanie Kellar <SKellar@san‐marcos.net>; [email protected]; David Shepher d <[email protected]> Subject: RE: OCRR/FHVC Parking Issue Resolution
CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe.
Dear City Manager Bender, Mr. Plishner and Councilmembers:
We write on behalf of my clients Fish House Vera Cruz (“FHVC”) and its longtime owners the Butle r family. Lennar seeks to appeal the negative re commendation of the Planning Commission, which deliberate d thoroughly in its November 6 hearing. My clients have made every effort to cooperate in negotiation as the Planning Commission and city staff had requested. As you know, we obtained an arms-length appraisal of the fair market value of the FHVC property [1] and promptly shared it with Lennar. We di dn’t send it to the city because, as the city confirmed, it wishes the principals to resolve this directly. We remain willing to do so. This letter briefly restates some recent history and then summarizes several proposals for full resolution. If as expected the Council expects to stay at arms-length from the ba rgaining process, we wish the Council to understand i n advance of December 12 how hard FHVC has tried to craft alternatives that are fair to everyone.
Recent history: As the Council knows, FHVC has for decades provided both a popular dining spot and a steady source of employment and training for San Marcos’ young people. In fa ct, FHVC began its business in Ol d California Restaurant Row on December 23, 1979. It has consistently enjoyed a positive reputation under the ownership of a single family. Before the development plan was publicly disclosed, and in November, 2022, Ron Butler placed two calls to the President of Lennar to atte mpt to learn more, and a call as well to the manager o f OCRR, and none of those calls were returned. It is a sad fact that nobody from Lennar attempted to contac t FHVC before FHVC became aware of the impact of Lennar’s plans at a public workshop. FHVC principals then attempted to contact Lennar officers multiple times and were ignored until FHVC counsel started writing letters pointing out the fact that Lennar’s plans seriously damaged FHVC’s ability to park its business according to the two recorded reciprocal parking agr eements (1989 and 1990) which are at issue here. The fact that Lenna r
declined early and meaningful contact has cost everyone in this matter time and mo ney. What really happened here? The most logical conclusion is that Lennar di dn’t do its homework in pla nning the project; that the reciprocal parking easements were not read or understood during routine due diligence and that the location of a park, pickleball courts and new busine ss footage were etched into the Sp ecific Plan (and commitments made to the public) before the inconvenient truths were fully understood. Candidly, an admission of error by Lennar would promote better dialogue. It is far more charitable th an the competing conclusion, which is that Lennar, realizing the error, just decided to run roughshod over its neighbor, a l ongtime contributor to the community.
Here are the ways we think the disagreement can be resolved:
2 Alternative 1: Omit the Park, Substitu te Additional Parking: The park and pickleball courts do not have to be where depicted. Other land is available off-site, and this would quell the “no public use” controversy. The city can replace the park with additional parking. In our opinion, this should be a two-hour lot with city providing the management for the lot.
Alternative 2: Lennar to Purchase FHVC Land and Building: Buyouts are based on the fair market value o f
assets on the open market, willing buyer/ willing seller. They are not based on the unique value (or lack of value) to a specific buyer. The land and building has an ascertainable value to a buyer based on the fact that it is occupied by a reliable rent-paying tenant. We will provide city with the appraisal if requested. FHVC is not obliged to entertain a rock-bottom discounted offer based on the li mited value of the land to Lennar as housing. If Lenna r wants to acquire FHVC’s interests and avoid a large cash outlay, let it arrange a sale to an investor for fair market value. Everyone wins in this scenario. Lennar’s current position on buyout will accomplish its objectives only on the back of FHVC. By contrast, if Lennar is willing to do the work it should, it may not lose money and may in fact benefit its project. When the land and buildi ng are purchased, it is assumed that the easements will be cancelled and reconveyed by Lennar and that a different parking plan will be enacted and Lennar then has control over “public use.”
Alternative 3: Substituted Parking Plus Lot Line Adjustment: The third alternative, like the first two, is FHVC’s effort to resolve what the two reciprocal easements have always been intended to avoid: use by the “general public” and “any public purpose whatsoever.” Please consider this: by eliminating a significant amount of parking specifically included in the reciprocal parking easements and turning it into a public park/pickleball court, Lennar and the city directly violate those limitations. The alternative below requires a lot line adjustment to convey additional dedicated parking spaces to FHVC, and by doing so making it possible to terminate the two reciprocal easements. Please understand that this alternative is vi ewed less favorably by FHVC because there is still the inescapable reality that FHVC will have a policing problem (regardless of restrictive signage) arising from users of the park/ pickleball courts and (unavoidably) residents and visitors to the Lennar project who choose to ignore signs.
The 36 spaces immediately adjacent to and west of the FHVC parking lot (four (4) rows of nine (9) spaces) would be subject to the lot line adjust ment and FHVC would own them. Both the 1989 and 1990 easements would be terminated, eliminating reciprocal parking rights. FHVC would entirely control who parks in its spaces and under what conditions.
Additional comments: We thoroughly considered certain specific arrangements and features suggested by Lenna r
and/or the city, and were obliged to conclude that they were too problematical. These were:
in Lennar’s alternate parking proposal, the replacement spaces locat ed along San Marcos Blvd. and the Northwest area of the project, are not remotely adj acent to FHVC. Replacement spaces should be “like for like” or nearly so as to location;
valet services are expensive and impractical and fraught with other problems, including cost containment and insurance issues; there was no prior discussion of a “peak restaurant hours” limitation. There is no enforcement mechanism for parking violati ons and the city has made it clear that it isn’t interested in being involved with parking problems on private property.
We are forced to conclude that Lennar has simply been unwilling to do the hard work to find a solution fair to both parties and respectful of the community. The Planning Commission saw this. Lennar hasn’t invested in an arms-length, objective appraisal. We have commissi oned two appraisals. Lennar’s proposed parking modifications are conveniently conceived to be the least intrusive to Lennar’s current plan. We defer for now any further discussion of legalisms, CEQA requirements and inverse condemnation. We don’ t need to revisit those now and the City Attorney is well aware of them. We are focused on funda mental fairness and if resolution is not reached before December 12, Counc ilmembers should defer consideration of this project until they are satisfied that Lennar has dealt fairly with its businesses and taxpayers. We remain available. 3 Thank you for your attention to this letter. Please confirm that it will be made available to the Councilmembers in the agenda packet and be made part of the permanent record.
W. Stephen Wilson
Of Counsel
Real Estate
t +1 415 872 3212
withersworldwide.com | my profile
Secretary: Marissa Lara t +1 415 872 3216
Withers Bergman LLP
909 Montgomery Street, Suite 300, San Francisco, CA 94133
From: Alex Plishner <[email protected]>
Sent: Friday, December 1, 2023 4:53 PM
To: Wilson, Steve <[email protected]>; Isaac Etchamendy <IEtchamendy@san‐marcos.net>; Michelle Bender <MBender@san‐marcos.net>; Ryan Green <[email protected]>; Sean del Solar <SdelSolar@san‐ marcos.net>; Joseph Farace <JFarace@san‐marcos.net>; Scott Nightingale <snightingale@san‐marcos.net>; Kyrenne Chua <kchua@san‐marcos.net>; rexbutler@ ; butler2smiley ; rjbutlerusa@ ; Ho, Yin <[email protected]>; Ozolins, Diana <[email protected]>; Stephanie Kellar <SKellar@san‐marcos.net>; [email protected]; David Shepherd <[email protected]> Subject: RE: OCRR/FHVC Parking Issue Resolution
Isaac, and members of the City of San Marcos, thanks for your continued efforts to pursue a mutual agreement between both parties.
As a response to your email, Lennar believes it has sent over all requested items from our meeting on November 17, 2023 to the Butler Family as well as to the Fish House Vera Cruz le gal counsel. As stated, and as a follow up to an email I sent around Thanksgiving, Lennar has been looking forward to reviewing the appraisal conducted by the Fish House team. It should be noted, as was discussed, any valuation of the property should be solely on the land itself, exclusive of the building and the Fish Hous
e business. As a residential homebuilder and developer, Lennar would only ever look at the “developable” portion of the land (exclusive of the area of the property that is in the flood plain and the alleyway easement). Our calculation shows this is approxim ately .45 acres. As an update, we received the appraisal today, sent by Fish House’s counsel, and we intend to review it and discuss the merits of it internally before formally responding.
Lennar to date has come up with several solutions to solve what Fish House believes to be their primary objective – to account
for (in their words) is the loss of (36) parking stalls. We have offered the ability to gain approximately (45) new and additional stalls. The San Marcos City Manager had also suggested establishing a valet service for peak restaurant hours to mitigate any potential additional parking issues. L ennar is supportive of pursuing this extra measure. The Fish House Vera Cruz team has to date offered two suggestions: 1. Eliminate the public park, which we believe is not possible as it’s part of the City’s approved General Plan, or 2. For Lennar to buy their property (as well as their perceive d
4 value of their easement). Lennar may be open to purchasing the Fish House property if it makes business sense to do so.
In the spirit of cooperation, and working together to achieve mutual solution, Mr. Wilson or any of the members of the Butler family, we would love for you to provide comments regarding the extra parking plan Lennar has wor ked very hard to develop. Your feedback on this is very important to us.
Additionally, to address Fish House’s concern that park visitors will make excessive use of Fish House’s parking lot, Lennar is willing to accept a condition of approval that restricts park visitors from usin g parking spaces on the Fish House property. We would propose a condition as follows: “Public park visitors shall not be allowed to utilize parking spaces within the parcel owned by Fish House Vera Cruz. If the owner of the Fish House Vera Cruz parcel permits it, signs shall be poste
d on the Fish House Vera Cruz property stating that public park visitors are not permitted to park on the Fish House Vera Cruz premises.” This would neutralize the effect of the public park on Fish House Vera Cruz’s operations.
As you can see, Lennar continues to pursue several me aningful solutions, and asks that the Fish House team do the same by providing comments to these many proposed suggestions.
Thanks again to the entire city staff for facilitating these important discussions. We are certainly (and always) here to help in any way possible.
Alex L. Plishner
Senior Vice President | Land Acquisition + Forward Planning
[email protected]
Mobile 858-344-6988
Office 858-618-4919
16465 Via Esprillo Suite 150
San Diego, C
A 92127
If you would like to stop receiving email messages from us at any time, please click here or simply reply to any message and type "Unsubscribe" in the subject line. Lennar strictly adheres to the CAN-SPAM act and will immediately remove your email address from our records upon request. This e-mail is intended only for he use of the person to whom it is addressed and contains information which may be confidential or privileged. If you are not the person to whom this e-mail is addressed, or an agent authorized by such person to receive this e-mail, you are hereby notified that any examination, copying, distribution or other unauthorized use of this e-mail is prohibited. If you received this e-mail in error, please notify me immediately at the e-mail address referenced above. Offers, incentives and seller contributions are subject to certain terms, conditions and restrictions, which may include the use of designated lenders or closing agents and are subject to change or substitution by Lennar without notice. Equal Housing Opportunity.
[1] CBRE’s staff felt it had inadequate experience in valuing reciprocal easements and we have retained a second appraisal firm to render a comparison appraisal which does value the easement rights. You should anticipate some increase in the final number as a result.