LOS ANGELES--(BUSINESS WIRE)--The Ratkovich Company, a Los Angeles-based real estate development company with a four-decade-plus successful track record of specializing in urban infill and historic rehabilitation of landmark properties, has filed a lawsuit in Los Angeles Superior Court after being prevented by the City of Alhambra from building much-needed market-rate and affordable housing in the San Gabriel Valley.
The lawsuit [Elite-TRC Alhambra Community LLC, et al. v. City of Alhambra and City Council of the City of Alhambra (Los Angeles Superior Court Case No. 22STCP00217)] aims to compel the Alhambra City Council to live up to its values and legal responsibilities and approve The Villages at the Alhambra, which is the largest housing project in California to be denied by a locality and forced to seek relief under the Housing Accountability Act (HAA). The Villages complied with all applicable zoning and development standards and was much less dense than what was allowed under existing zoning.
At a time when California is experiencing an unprecedented housing supply crisis, exacerbated by higher costs throughout the economy, the project proposed 790 residential units (reduced from an initial 1,061) on vacant and underutilized land at The Alhambra, a 1 million square foot office campus adjacent to public transit. Owned for over 20 years by The Ratkovich Company, The Alhambra has become a jobs generator for the city, attracting tenants that include numerous higher education institutions, large and small companies alike, as well as a full service health club.
After nearly four years and over 20 public hearings, which violated the streamlining provisions of the state’s Housing Crisis Act, the City Council denied The Villages based on a hodgepodge of classic anti-development “justifications.” The City also misrepresented what its own staff and consultants found regarding the project’s consistency with the City’s general plan, and misrepresented the project’s compliance with City parking requirements.
One city council member even conjectured that a lack of carports could be used to deny the project. The fact is many people have been forced to live in their cars because of the housing affordability crisis. The average home price in the City of Alhambra as of November 2021 was $845,000, according to Zillow. The Villages would have voluntarily included 84 affordable housing units at the low-and moderate-income levels.
“The Los Angeles region is experiencing an acute housing crisis that has taken its toll on our economy, and especially those essential workers who cannot afford to live close to their jobs,” said Brian Saenger, President & CEO of The Ratkovich Company. “The Villages is a textbook example of exactly the type of urban in-fill living that people want and need. Instead, the City of Alhambra has chosen to outright deny the project over petty objections such as carports.”
Understanding the gravity of the housing crisis, Governor Gavin Newsom in 2021 signed 31 affordable housing bills focused on cutting red tape and holding cities accountable for providing their fair share of housing, building upon numerous recent legislative efforts. Under the HAA, localities must approve housing projects that comply with objective zoning standards, and California’s legislature has strengthened this state housing law in recent years to prevent unmerited denials.
To ensure that local leaders fulfill their legal responsibility to plan and zone for their city’s share of the state’s housing needs, Governor Newsom established California’s new Housing Accountability Unit (HAU) at the California Department of Housing and Community Development (HCD) in September. That month, Governor Newsom said the housing situation “is undermining the California Dream for families across the state.”
The Ratkovich Company has contacted the Housing Accountability Unit at HCD to ask that an investigation be opened regarding the City of Alhambra’s denial of The Villages.
In addition, the Los Angeles County Business Federation (BizFed), which represents more than 215 business associations representing 410,000 employers with more than 5 million employees throughout the region, has also reached out to the HAU and HCD as well as the Governor and California Attorney General Rob Bonta to request a review of Alhambra’s actions.
“BizFed is focused on helping solve California's acute housing crisis. We urge every city council across the state to remember they are empowered and charged with saying yes to projects that propel us toward our affordable housing goals. Today, the spotlight is on City of Alhambra leaders; they must do their part to provide sufficient housing. While not ideal, State officials must also be summoned to step in and ensure housing laws are properly enforced," said Tracy Hernandez, Founding CEO of BizFed.
In its lawsuit, the Company makes its case for permitting The Villages by asserting a claim under the HAA, and separately asserts a non-housing law claim alleging that the City of Alhambra does not have the required evidence in the record to support the findings that led to its decision to deny the project.
In fact, courts throughout the State of California have repeatedly enforced the HAA against localities and jurisdictions that acted to oppose qualified housing projects, including cases involving the City of Los Angeles and the City of Berkeley.
While Alhambra faces dramatically rising rents and home prices, the City Council chose to deny The Villages based on long-held and repeatedly expressed animus to large-scale multifamily housing, using discredited attempted justifications such as an increase in traffic (an independent environmental review showed the project would have no significant traffic impacts), unsatisfactory parking (the project provides adequate parking through a certified shared parking plan) and not being consistent with the City of Alhambra’s general plan (the City’s own consultant and staff stated in writing that it is.)
More egregiously, the City Council counted The Villages’ units toward its state-mandated requirement to provide 6,825 units over the next eight years in the 6th Regional Housing Needs Assessment (RHNA) Cycle—after directing staff to draft the resolution to deny the project. The City’s track record also speaks for itself. Over the last eight years, Alhambra permitted fewer than 20 percent of its required units, with the lion’s share going to housing only affordable by those earning significantly more than the median income. On the other hand, the neighboring city of Pasadena permitted 226 percent of its state-mandated units during the same period.
"Let's be clear, there was 1 million square feet of dormant office buildings in the middle of our city before The Ratkovich Company came to town and revitalized The Alhambra. They leaned-in and invested heavily in turning around the eyesore and making it an important economic engine for the city—while also bringing a national department store and name brand local serving retail to town. Furthermore, they are model corporate citizens in every sense of the word. Housing was always part of their revitalization vision and now, more than ever, projects like this are critical to stem the tide of those who feel like they can no longer afford live and work in our city," said former Alhambra Mayor Paul Talbot, who served on the City Council from 1994 to 2006.
Alexander DeGood and Andrew Sabey, partners at Cox Castle Nicholson, are leading the litigation on behalf of The Ratkovich Company. Collectively, they have decades of experience successfully litigating a multitude of land use cases. Regularly appearing in state appellate courts throughout California, Sabey has also successfully handled cases before the California Supreme Court, as well as the federal District Courts and the Ninth Circuit Court of Appeals.
About The Ratkovich Company
The Ratkovich Company (TRC) is a Los Angeles development company that engages in both new projects and the imaginative reuse of existing buildings. TRC has completed, or has under development, over 18 million square feet of commercial space in Los Angeles County, including The Alhambra, a 40-acre mixed-use urban community in the city of Alhambra; The Bloc, a 1.8 million square foot, mixed-use property at the heart of downtown Los Angeles; West Harbor, a 42 acre dining and entertainment destination on the LA Waterfront; and The Hercules Campus at Playa Vista, a landmark property including the hangar where Howard Hughes’ legendary Spruce Goose was built, and now home to Google/YouTube and 72andSunny. TRC has won numerous awards for its restoration of Los Angeles landmarks including the Art Deco Wiltern Theatre and adjacent Pellissier building; and the iconic 31-story 5900 Wilshire on Miracle Mile. The James Oviatt and Fine Arts buildings were both awarded national landmark status after successful renovations by TRC. For more information, visit www.ratkovich.com.