Demands Are Hot at Village at Los Carneros

The Village at Los Carneros is a hot property. When its model homes opened on February 26, all the 3- to 4-bedroom detached homes in the Avila subdivision were already sold, even at prices in the high $800,000s. Demand will be even greater for the 70 units of affordable apartments, which were a condition for approval of the project in 2014, along with a bridge over Tecolotito Creek and a recreation building for the residents. Several chickens from decisions made about those conditions came home to roost at the City Council meeting Tuesday evening.

The 465 apartments, townhouses, and detached homes that make up the Village — located behind the old Raytheon buildings on Hollister — were approved to be built by Comstock Homes, a real estate company based in El Segundo and owned by Bob Comstock, who also built The Bluffs development out at Ellwood. Bob Comstock’s savvy is rapidly become legendary, as he swapped a portion of his Bluffs property to Goleta for UCSB’s Devereux wetlands restoration project, which greatly speeded The Bluffs along, and he’s donated the more than two acres under the 70 affordable units to People’s Self-Help Housing, which will manage them.

In order to ensure the affordable rentals would be built, the city and Comstock made a Development Agreement that before Comstock got its 220th building permit, the affordables had to be finished. The city made similar conditions for the recreation building and a much-needed car, bike, and pedestrian bridge over Tecolotito Creek to give residents an exit to the west to Cortona Drive.

Then Comstock sold two of the lots to RTA (Red Tail Acquisitions) Carneros, a real estate investor in Irvine: Lot 5 last June and Lot 9 this January. Red Tail complained to the city in 2016 that it couldn’t control Comstock’s building of the affordables, the rec building, or the bridge, and that its lenders were leery of such caveats. City Attorney Tim Giles drafted an estoppel agreement letting Red Tail out of those conditions last May, and he and City Manager Michelle Greene signed it. Red Tail then came back, asking for the same terms for its January 2017 purchase. Tuesday’s meeting was the council’s first shot in public to ask why they were never told about the estoppel agreement until this February. Four public speakers, all members of the Goodland Coalition, asked the same thing.

The fireworks were muted. Giles had left the city in January, as had the planning director, Jennifer Carman. That left the city manager, Michelle Greene, a 13-year veteran of City Hall, to state that “staff had not communicated the implications of the Lot 5 agreement.” They were not provided by the prior city attorney and not brought to her attention by the prior planning director, she said. The interpretation at that time, was that it was “not something of a magnitude to come back to council.” It wasn’t until after February’s staff report, she said, when the new deal came up, that it became clear that the council’s leverage over the developers to build the affordables would be “severely impacted.” The item was pulled from the February meeting until legal counsel could obtain.

Appearing for the first time at this meeting was the city’s newly retained attorney, Michael Jenkins of Jenkins & Hogin of Manhattan Beach. He offered that different interpretations could be made of the May agreement with Red Tail, but the preferred practice would have been to bring substantial changes like those to the council.

Red Tail’s president of development, Tim Kihm, told the council that the “heartburn” his company’s demands were causing had been fully explained by city staff. Red Tail’s lender had agreed to the conditions regarding the bridge and rec building, and Red Tail was willing to operate under the good faith that the council wanted the project completed. But he would need 88 permits to continue on, he explained, and Red Tail had no control over what Comstock did to build the affordables.

The affordable units were on track to be finished by January 2018, assured Comstock’s CEO, David Lauletta, and city staff said bridge construction would begin in July. Comstock’s sales force was showing the models daily, the first set should be occupied by the end of the summer, and they’d soon need 100 more building permits.

The item gaveled out with the council agreeing to have staff sit down with the developers, including People’s Self-Help, to figure out an agreement that worked for them and for the city. As long as rain doesn’t turn the worksite into mud soup, as it had in February, building continues apace.