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Mandurrago: Judge should order city to issue permits

By MARY BROWNFIELD

Published: June 11, 2010

DEVELOPER JOHN Mandurrago took his legal fight with the City of Carmel to Monterey County Superior Court Judge Lydia Villareal Wednesday afternoon, arguing the city should be compelled to approve his plans for demolishing the old bank building at Dolores and Seventh and replacing it with apartments, condos, retail space and a split-level underground parking garage.

Representing Mandurrago, Lombardo & Gilles attorney Dennis Beougher said city officials illegally changed an environmental impact report on the project and violated state laws encouraging affordable housing when they denied his application.

Speaking for the city, attorney Rick Harray argued decision makers had the right to deny Mandurrago’s project, which he first proposed in September 2001, because it would have conflicted with California’s environmental laws.

‘Trumped up’

Beougher detailed the history of the project, focusing on the 41 findings the city council adopted to back its December 2006 decision the modern-style building designed by architect Walter Burde in the early 1970s was not historic.

“The bank was not eligible to be listed on the city’s inventory of historic resources,” he said. “So if it’s not on the list, it’s not protected from demolition.”

But then two of the council members who agreed with that decision, Erik Bethel and Mike Cunningham, resigned, and subsequently, “the planning commission trumped up this ‘loss of great architecture,’” as a reason to require preservation of the building. Beougher said he deliberately used, “trumped up,” because the city had no established criteria or standards to determine and define “great architecture.”

“It’s, ‘I know it when I see it,’” he said. “The city needed to adopt standards for determining great architecture; otherwise, it’s arbitrary and capricious.”

Beougher also argued the city should have approved the project because it includes two affordable units, which are encouraged by state law.

Instead, officials decided the proposal did not qualify as a “housing development project” under the Housing Accountability Act and used the California Environmental Quality Act as justification for denying it. Beougher said the housing act should have applied, in which case the project could only have been denied if its construction presented a threat to the public’s health, safety or welfare.

“If the findings of the city are based on erroneous legal assumptions, then the findings must be vacated,” Beougher said.

Not set in stone

Harray countered that the city had every right to change the EIR to protect the bank building and said the state’s affordable housing law does not require cities to ignore CEQA requirements.

He said the housing act actually dictates that nothing in it should “be construed to relieve the local agency” from obeying state environmental laws. Therefore, he said, the Housing Accountability Act “must give way to complying with CEQA.”

Villareal questioned that take, saying the state policy “encourages jurisdictions to be careful not to use CEQA as a means of stopping housing, particularly low-income housing,” and commenting, “The Legislature, in its wisdom, wanted to encourage this kind of housing, and to encourage cities not to use CEQA to deny it.”

But Harray said the state housing law only applies if a project doesn’t present any significant environmental issues.

“It basically says if everything is in order and you’re still denying it, then we’re going to crank up the burden of proof,” he said. He argued that any other reading of the law greatly diminishes the effectiveness of CEQA.

Harray also said city officials were not wrong in changing their conclusions regarding the importance of the Dolores Street building.

Preservationists “started providing more and more evidence and literally exposed what the value of this building was,” Harray said. “It’s not frozen in time. We can change our minds ... and that’s what happened.”

And the city’s conclusion Mandurrago’s project didn’t qualify as a housing development and was therefore not subject to the standards and protections of the affordable housing law was not made because the city opposes low-cost housing.

“It’s not that the city doesn’t want affordable housing,” he said. “It wants more,” than what Mandurrago offered.

Villareal took the case under submission. According to law, she has 90 days to issue a ruling.

Meanwhile, the suit Mandurrago filed against the city in February 2009 trying to compel the city to approve his project — which was denied by Monterey County Superior Court Judge Robert O’Farrell — is under consideration by the California 6th Appellate District Court. Beougher said the court should issue a decision next month.