HOA suing Solana Beach after city council OKs affordable housing project

By Kristina Houck

A homeowners association representing hundreds of residents filed a lawsuit against Solana Beach in May after the council’s unanimous approval of a mixed-use affordable housing development on a city-owned parking lot on South Sierra Avenue.

Filed May 23 on behalf of Seascape Surf Estate Management Corporation, the lawsuit contains 12 causes of action, including a violation of the California Environmental Quality Act.

Everett DeLano, an attorney representing the homeowners of Seascape Sur, the residential community across from the project site at 555 S. Sierra Ave., noted the lawsuit also says the site is deed-restricted for public parking.

“I think it’s very easy for people to look at this and think the neighbors are complaining because it’s a low-income project coming in,” DeLano said. “They’re not. They would like to see a different city parking lot do this project. It’s just that this site is uniquely used for public parking.”

The council on April 23 unanimously approved the development.

Called “The Pearl,” the-three story building will feature three one-, two- and three-bedroom units ranging from 505 to 1,032 square feet, one 1,383-square-foot four-bedroom unit and 795 square feet of commercial office space.

The 10-unit project will not only help the city satisfy a state requirement, but satisfy a legal settlement.

All cities are required to provide affordable housing, but Solana Beach has been subject to lawsuits since the 1990s after the council took action that closed a mobile-home park. Rather than go to trial, the city entered into what became known as the Perl settlement, which mandated the replacement of 13 affordable units. So far, only three units have been built.

The project, to be built by San Marcos-based Hitzke Development Corporation, will also provide 53 parking spaces in structured parking, replacing the 31 public spaces and adding the required 18 spaces for the residential component and another four for the commercial space.

Many neighboring residents argued against the project before the council’s vote.

Some residents said they were concerned the replacement spaces will be smaller and underground, and therefore difficult to access.

Others argued against the project, saying they feared it would increase crime and traffic while decreasing property values.

In a recent interview, Ginger Hitzke, president of Hitzke Development Corporation, said that her company is not only replacing the public parking, but that the public will be able to use the residential and commercial spaces during the day.

“In effect, we’re really increasing the daytime parking,” Hitzke said.

“I feel like the real motivation is that they’re concerned about their property values and they are responding out of fear for that,” she added. “I definitely feel bad that they’re having those feelings, but there is no evidence anywhere that having housing with a deed restriction next to housing without a deed restriction devalues property.”

The Pearl is estimated to cost more than $6 million. With the council’s approval, the city will loan the developer more than $2 million for the project, which includes $648,000 in redevelopment funds and more than $1.4 million in general funds to be used for housing.

The loan must be paid in 55 years with 3 percent interest when the long-term lease expires.

The lawsuit alleges the city’s approval was an illegal use of taxpayer funds.

The lawsuit also claims the city failed to prepare an environmental analysis or consider feasible alternatives with fewer impacts.

“There are a number of good claims in this case,” DeLano said. “There are a bunch of issues going on with this particular site and this particular project.”

In an email, City Manager David Ott said the city policy is “not to comment on the merits of litigation other than to say the city’s position will be defended vigorously.”

At the April meeting, City Attorney Johanna Canlas said she took “great issue with any allegations of illegality” when some opponents argued that the council’s decision should have been delayed or that the project should have been denied, claiming residents didn’t receive proper notice of the meeting.

Several speakers also pointed out that the city denied applications for view assessments from the homeowners association and Sand Pebbles Resort.

The city is required to publish the staff report at least 72 hours before a public meeting.

Canlas said city staff hand-delivered copies of the staff report to the homeowners association and resort 10 days before the meeting — the same time the council received the report. Notices of the meeting were also published via the city’s website, email distribution list and social media pages.

Canlas also explained that a homeowners association, which is a corporation, can’t file for a view assessment. A time share, which is defined as commercial use under the city’s zoning ordinance, also can’t file for a view assessment.

Since the lawsuit was filed, DeLano said he met with representatives from the city and the developer on July 14 to propose a settlement, which was not accepted.

Although the lawsuit is ongoing, Hitzke said she believes the project is going to move forward and hopes to work with community members throughout the construction process.

“We’re moving forward,” Hitzke said. “We think it’s unfortunate that this lawsuit was filed. We do think that we will prevail, and I hope that at the end of the day, there aren’t any hurt feelings. I certainly won’t have any.”