Presenting a live 90 minute webinar with interactive Q&A Reviving Dormant Real Estate Projects: Legal Considerations Evaluating and Assessing Land Use Entitlements, Discretionary Approvals, and Other Key Issues WEDNESDAY, JUNE 5, 2013 1pm Eastern 12pm Central 11am Mountain 10am Pacific Td Today s faculty features: David P. Waite, Partner, Cox, Castle & Nicholson, Los Angeles Ellen Berkowitz, Shareholder, Gresham Savage Nolan & Tilden, Los Angeles The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10.
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Reviving Dormant Real Estate Projects: Legal Considerations CLE Webinar June 5, 2013 Strafford Webinars and Publications i David idwit Waite Cox, Castle & Nicholson, LLP Ellen Berkowitz Ellen Berkowitz Gresham Savage Nolan & Tilden PC
Contact Information David Waite Cox,Castle Castle & Nicholson, LLP 2049 Century Park East, 28 th Floor Los Angeles, California 90067 (310) 284 2200 dwaite@coxcastle.comcom Ellen Berkowitz Gresham Savage Nolan & Tilden, PC 333 South Hope Street, 35th Floor Los Angeles, CA 90071 (213) 213 7249 Ellen.Berkowitz@GreshamSavage.com 6
Reviving a Project? What development rights have been granted? Are those development rights vested? Do project revisions or implementation require further environmental review? 7
Viability of Reviving ii a Dormant Project Does it make sense to revive a dormant project? What obligations, fees, mitigation measures and other conditions may have been imposed on the project? Does the project still work economically? Are the uses still viable? 8
Potential Obligations Be aware of: Significant infrastructure improvements Dedications of parkland, streets Construction of public facilities Impact tfees Contractual obligations (i.e., development agreement, prevailing wage) 9
Potential Liabilities Compliance with environmental regulations Clean up of contamination Restoration of habitat Construction of flood control measures 10
Local Regulation Check city or county regulations Rules vary City of Los Angeles Vesting zone change City of Carson Use of permit County of Riverside Map conditions 11
Vested Rights Common Law Vested Rights Vesting Tentative Maps Development Agreements 12
Common Law Vested Rights Avco Community Developers, Inc. v. South Coast Reg l Comm n, 17 Cal. 3d 785 (1976) Common law vesting does not apply unless the developer has: A validly issued building permit Performed substantial bt tilwork Incurred substantial liabilities in good faith reliance upon the building permit 13
Refinements of Avco Rule Vested rights granted by governmental permit are no greater than those rights specifically granted by thepermit Santa Monica Pines, Ltd. v. Rent Control Bd. 35 Cal.3d 858 (1984) 14
Refinements of Avco Rule A governmental permit must be valid to vest rights Strong v. County of Santa Cruz, 15 Cal.3d 720 (1975) Even if the property owner did not know of the defect in the permit Pettit v. City of Fresno, 34 Cal.App.3d (1973) 15
Refinements to Avco Rule No vested right in existing zoning, anticipated zoning, or zoning for highest and best use Gilliland v. County of Los Angeles, 126 Cal.App.3d 610 (1981) 16
Refinements to Avco Rule Vested rights can be lost if development threatens public safety Davidson v. County of San Diego, 49 Cal.App.4th 639 (1996) 17
Refinements to Avco Rule Vested rights can also be lost if abandoned Fact intensive inquiry Stokes v. Board of Permit Appeals 52 Cal. App. 4th 1348, 1357 (1997); Pardee Construction Company v. California Coastal Commission, 95 Cal.App.3d 471, 157 Cal.Rptr. 184 (1979) 18
Expiration of Building Permit Impact of expiration of building permit Some city codes require new building permit even if rights vested Compliance with CALGreen? 19
Vesting Tentative Maps Subdivision Map Act; Govt. Code 66498.1 et seq. Adopted in 1984 in reaction to Avco and experience with development agreements Get vested right to proceed with development in substantial compliance with local ordinances, policies, and standards when mapapplicationapplication is deemed complete 20
Vesting Tentative Maps (cont.) City must process map approve or deny based on statutory criteria Not a legislative act not subject to referenda (is subject to CEQA) Does not control exercise of city s discretion on future land use decisions (e.g., CUP), no guarantee that will be approved 21
Vesting Tentative Maps (cont.) Map Act provides for life of maps Annexing Cities i are not subject to county approved vesting maps (incorporating cities are) 22
Contents of a Vesting Map Says vesting on the map Additional local requirements Cities and counties must adopt implementing ordinances Cities and counties may impose conditions reasonably related to the rights conferred Cities and counties may require information related to standards established for approving a vesting maps 23
Development Agreements Govt. Code 65864 et seq. Authorized in 1979 in reaction to Avco Private contract between city/county and developer Discretionary legislative action (subject to referendum) Subject to CEQA 90 day statute of limitations 24
Development Agreements (cont.) Vests rules, regulations, and policies in effect at time of execution of the agreement (unless otherwise provided in the agreement) Conditions negotiated on ad hoc basis not subject to Nollan/Dolan limitations Generally limited to city limits, but can be entered into for property in sphere of influence Both annexing and incorporating cities subject to previously executed agreements 25
Development Agreements (cont.) Development agreements do not contract away the police power SMART v. County of San Luis Obispo, 84 Cal.App.4th 221 (2000). Mammoth Lakes Land Acquisition LLC v. Town of Mammoth Lakes, 191 Cal.App.4th 435 (2010). 26
Development Agreements (cont.) City may terminate only if, on substantial evidence, it is shown that developer has not complied in good faith on conditions 27
Practice Tip For either Development Agreement or Vesting Map developer should consider obtaining full copy of applicable agency codes on date of vesting 28
If Project No Longer Viable Does approved project need to be changed? Size reduction Minor change of use (condo to rental) Major change of use (residential to industrial) Significant revisions to entitlements? Re Approval process? 29
Project Revisions Subsequent Environmental lreview CEQA Guidelines 15162 15164 Subsequent EIR Used when there are major revisions to the previous EIR Supplemental leir Used when minor additions to the prior EIR are required Addendum Some changes or additions are necessary, but a subsequent or supplemental EIR is not necessary 30
Subsequent Negative Declaration CEQA Guidelines provides for preparation p of subsequent NDs and MNDs and of an Addendum to a ND or MND Same thresholds and criteria apply to preparing a Subsequent ND or MND Section 15162(b) addresses situations where a Subsequent EIR is prepared after ND is adopted 31
Local and Proposed State Regulation Somelocal agencies have adopted formal or informal rules purporting to limit the life of an environmental analysis SB 754 would prohibit use of EIRs more than 7 years old 32