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Wednesday, November 14, 2012

Lawsuit Filed Over Septic Exemptions

• Rancho Malibu Hotel Developers Challenge RWQCB


A lawsuit filed by Green Acres LLC, the entity in partnership with Malibu resident Richard Weintraub for oversight and operations of the proposed Rancho Malibu Hotel, challenges how the LA Regional Water Quality Control Board came up with  the so-called pipeline projects that are exempt from the Civic Center septic prohibition.
The lawsuit also draws a broad-based picture of the current hotel project plans with “updated designs and auxiliary facilities…the basic project remains the 146-room hotel approved by the city in 1999 [and] includes what petitioner believes to be a ‘zero discharge’ on-site wastewater disposal system.”
Green Acres, LLC, the petitioner is a member-managed liability corporation with Weintraub's management entity as co-manager of the petitioner, who became the beneficial owner of the subject property after a court-approved bankruptcy reorganization in Dec. 2010, according to court documents.
Since about 1999, Weintraub and/or other entities in which he has an interest have served as day-to-day manager of both the predecessor owner and the current owner of the subject property while the petitioner continues to pursue the proposed hotel development project on the subject property, according to the lawsuit.
The legal papers cite the permitting history of the hotel project since 1984, walks through the septic prohibition and explains how and why the pipeline exemptions came about.
The complaint filed by attorneys Carlyle Hall, Jr. and Andrew Oelz maintains there was also initially discussions between the city, the RWQCB and Civic Center owners and developers about how the entitlement process should be given equal footing “with the good faith investment that property owners had in their existing Onsite Wastewater Discharge Systems or OWDS.”
“Behind the scenes, however, the Regional Board staff began working with the City of Malibu and the County of Los Angeles to formulate appropriate criteria for such a temporary ‘pipeline projects’ exemption. When the Regional Board staff had difficulty formulating appropriate criteria during these meetings, they ended up simply delegating to the City of Malibu and the County of Los Angeles, respectively, the task of preparing their respective lists of proposed projects with proposed new OWDS in their jurisdictions that, in their good faith judgment, had been sufficiently processed through their local government entitlement processing pipelines that they should be temporarily exempt. The county listed one residential project and the city listed somewhere between 40 and 50 commercial and residential projects. Those lists were provided to the Regional Board staff prior to the Nov. 5, 2009 public hearing,” the complaint states.
The lawsuit maintains at the beginning of the hearing the board staff stated they were still not recommending any exemptions, but that they had engaged in some private discussions with the city and county.
But after the public hearing, the board staff “for the first time announced that they would recommend such a temporary exemption after all.”
Right away, the complaint alleges there were problems. After the list was read into the record, the proponent of the Crummer project confronted the board’s executive officer and contended his project was on the city’s list and should have been read into the record. The executive officer informed him that he should request an “administrative modification” to add him to the list.
“Three days later on Nov. 10, by email, the Crummer project developer requested an ‘administrative modification’ and three hours later, by email, the board's executive officer informed him that she had approved it,” the complaint states
The next day, the Crummer project was added to the list before it was later made public as 'Table 4-zz,' the lawsuit states.
“Subsequent to the addition of the Crummer project to the list, at least three other proposed commercial OWDS projects were added to the list of temporarily exempt projects during various secret ’behind-closed-doors’ administrative meetings by a similar ‘administrative modification’ process. These commercial projects include the proposed very sizable, approximately 100,000-square-foot La Paz shopping center complex, the proposed approximately 40,000 square foot Whole Foods grocery store and retail project and existing medical building, country mart and restaurant proposed a new OWDS at 23410 Civic Center Way,” the complaint alleges.
“Regarding the secret executive officer's 'administrative modification' for those three commercial projects, no rationale was ever articulated or announced explaining why those particular commercial projects should be provided with a temporary 'pipeline projects,' exemption, while other commercial projects like petitioner's project should not be exempt,” the court document alleges.
When Weintraub and others first heard that the proposed hotel was subject to the prohibition, they contacted the Regional Board's new executive officer in the fall of 2011 and informed him that the project was mistakenly omitted from the city's list and should be included on the Table 4-zz exemption list.
The city manager was contacted and the city manager's letter explained that the hotel project was “inadvertently overlooked,” for being on the list. More information on the status of the hotel project was sent by city staff to the board, according to the complaint.
“Recently, however, following a closed door board meeting about the hotel project the executive officer informed petitioner, that petitioner's project would not be added to the exempt list after all,” the legal papers state.
The reason given, no commercial project could or should be temporarily exempted.
“This reason is arbitrary, capricious and discriminatory because five commercial projects currently appear on the exempt list. Nor is any rationale apparent. Another board meeting was held and it refused again,” according to the lawsuit.
“This abrupt and completely arbitrary turnabout by the Regional Board and its staff, sometime shortly after the recent Malibu city elections, appears to be motivated by unlawful and purely political factors, with the Regional Board seemingly deciding to try to 'kill' what it perceives to be a politically controversial project. But for this court's mandate ordering respondents to add petitioner's hotel project to the 'pipeline projects’ temporary exemption list, petitioner will be unable to develop its property in accord with its long-held entitlements” the court document goes on to state.
The lawsuit asserts the petitioner and its predecessors have expended about $6.5 to $7 million in processing the various requested entitlements.
Another $1 to $1.5 million has been expended since February 2010 since it was believed the hotel would be on the Table 4-zz list.
“Based on the Regional Board's actions, petitioner has been rendered completely unable to obtain additional financing for further entitlement processing activities and it cannot, as a practical matter proceed any further in its entitlement processing, because it can no longer propose a project that utilizes an OWDS,” the court document states.

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