March 30, 1995 - From the March, 1995 issue

Dan Garcia Headlines LA’s Development Reform Proposals

A TPR interview with Dan Garcia


Dan Garcia

“It is never quite clear which is the last discretionary process you have to crawl through to get your project approved. The City is never really required to tell you all the steps necessary to gain project approval…”

The Development Reform Committee (DRC) recommendations have been generally well-received, but much of the criticism deals with the reform process itself; who was and who wasn't involved. Can you clear up this point of contention once and for all? 

Well, you know the City has had a bizarre history in its approach to land-use planning. The bottom line is that I inherited a committee, I did not select it. I am personally bored to tears with the incessant whining I've heard for the last six months. I think it is totally irrelevant. 

First, people who don't like the process need to talk to the decision makers, not to me. Secondly, in order to mitigate the appearance of conducting our business behind closed doors, which by the way is how all these reports and investigations are written, we decided to do what other consultants do: meet with the community. We had several community meetings with hundreds of people, and obtained valuable feedback. 

But, indeed, the discussions with the homeowners revealed the fruitless orientation of a few of these people. In certain instances, all we heard were complaints about who was in control-power as opposed to substance. They didn't want to talk about the specific recommendations and chose not to believe what we told them, i.e. that we were not changing land uses but rather dealing only with process. 

I found this situation to be wholly extraneous to the nature of our work and it reinforced my belief that we needed to get to our recommendations so people could judge for themselves. In any event, there will be plenty of opportunities for public comment as the legislative recommendations go through City Council hearings.

Were the twenty-three individuals who composed the DRC an appropriately representative group to examine the reform at the City's development processes? 

They were certainly as good as any other group of individuals in the City with respect to understanding how the City's bureaucracy works. They represent a wide spectrum of people who are familiar with the system — former elected officials, former members of various city departments, individuals involved in large-scale development, leaders of community organizations and affordable housing developers. 

The DRC really concerns itself with three issues — entitlements, fees and exactions, and administrative procedures. Let's examine a few specific recommendations in each area. Under planning case process and management, you refer to mandating concurrent processes of land use entitlements and environmental documentation. What is the merit of this recommendation? 

Unlike virtually every jurisdiction with which I am familiar, the City of Los Angeles is notorious for several unique habits. One of those habits exists in the entitlement system. It is never quite clear which is the last discretionary process you have to crawl through to get your project approved. The City is never really required to tell you all the steps necessary to gain project approval — instead you must rely upon the oral responses you obtain from staff representing various departments. This clearly discriminates against the landowner. 

Also, the level of uncertainty is harmful and unnecessary. You must spend time and resources fighting to overcome a number of predominantly bureaucratic obstacles. Most of this is not about homeowners opposing a particular project, it is about negotiating through an unrelated, disorganized maze of rules, regulations, ordinances and city habits. 

Our system is not like other cities with which we are competing for economic development. We are comparatively slow, costly and erratic. We are not advocating throwing out the old rules that protect land-use, instead we have taken the position that it is the responsibility of the City to do two things: (1) advice the property owner in a binding fashion of all the process/procedures needed to obtain land use approval and (2) require to "process" all these discretionary applications simultaneously. 

Another DRC recommendation precludes city departments from adding any other discretionary approval once the entitlement process is completed. 

Yes. As you know, any project that complies with the zoning code and General Plan still has to go through a discretionary system that invariably leads to the City Council. Thus, in order to obtain land use approval you must bargain with the City Council and with the relevant city departments over all of the conditions the City wants to impose. Then, having made your concessions and thinking you' re done with negotiating, you proceed to the "administrative" permit phase and guess what? You have to give more! The Department of Engineering decides that even though you are already paying for a traffic signal in front of your building, you also have to widen the street or a new study is ordered or you are required to perform another improvement which will take half a year. It just never ends. 

From our perspective, project conditions are not administrative actions and should really take place in the permitting phase. Secondly, there is a questionable legal justification for the City, if any justification at all, for many requirements imposed on property owners. 

Once you have completed the entitlement phase, you should know what you project is going to cost. And once you are on the Building & Safety side, generally speaking, you know that your project has been approved. At that point the purpose of plan check and your job is to comply with the Building and Safety code and the conditions initially imposed. 

Some have suggested that the City is often in a position of changing policies and ordinances, and thus affecting projects in the pipeline; when should a project be immune to contemporaneous changes in city policy? 

That is a matter of judgment. Of course, as a matter of law, once you have substantially completed construction in reliance upon a valid building permit, you have a basis for vested rights. However, there are many instances when you have spent a large sum of money in following the City's procedures yet still don't qualify for a vested right. We need to have a system which is fair: one that does not economically hurt people who have relied on the existing rules. Thus we recommend some limits on when the rules can be changed which adversely affect a project. 

Our view is that the better place to invoke the cut-off is in the entitlement process. Once you are through the process, you should be finished. The City ought not be able to come back and change its mind. 

Under zoning codes and specific plan amendments there is a section which reads, "amend the zoning code to replace the current site plan review process with objective development standards and criteria in order to avoid the need for discretionary approval." Tell us about the need for this recommendation. 

First of all, there was tremendous sentiment to abolish the site plan review ordinance. If your plan already conforms to existing zones, has cleared all of the ordinances overlay ordinances, height limits, etc., and of course, is consistent with the General Plan — what else does the City have to review? It's not a bad question to ask. But in bending over backwards not to offend Council's need for power, we merely suggested that some objectivity be placed in the site plan review ordinance. 

If there is a legitimate series of design questions such as enhancing pedestrian access, the ordinance ought to say that. If you read the ordinance in its current form, it does not say that. Basically it says the City can do whatever it wants with your project. That is not appropriate. If that is the case, why do we bother having a planning and zoning code and General Plan? You can't have both of these worlds — a series of labyrinthine code measures and an entirely discretionary review process. 

We are saying that if you really feel you have a need for a review process, at least develop standards so people, including the bureaucrats, know specifically what they are administering.

Another recommendation related to timing, states, "Amend the zoning code to provide ( 1) grandfather protection which precludes the application of any subsequent legislative changes to a development project, following acceptance by the City of a completed application, and during the time period that the project approvals are being processed and construction proceeds, and (2) a separate provision for equitable estoppel preventing the city from reinterpreting its own regulations once physical construction begins." Your comment. 

The first part is what I addressed before. What we don't want is for an applicant to go through the discretionary entitlement approval, start the construction process, and then be subjected to another discretionary approval or a midstream regulatory change that makes you lose months or years of previous effort and cost. 

The second part of the regulation refers to the more complicated problem of establishing a vested right. We were advised that recently in several instances, a building permit was issued, construction had commenced, but was not yet at the vested right stage when someone heard that some minor regulation had been missed. Well, that is a plan check mistake. The City is paid thousands and thousands of dollars and at some point the City has to waive its right unless health and safety are threatened. So instead of forcing a builder to tear down anything and start over, we recommend equitable estoppel, which basically provides the applicant a means of relief under the circumstances I have described. 

Regarding CEQA provisions, the DRC recommends amending CEQA guidelines to clarify the threshold for triggering CEQA review and to identify the thresholds of significance for all environmental impact categories. The DRC would also restrict the formation of related project lists to a single list. What is the value of these recommendations?

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These recommendations are really very different from one another. The first one doesn't speak to what the outcome should be. At the moment the environmental review process is inherently a political system. There are no baseline judgments. It's based on a subjective impression of the various aspects of the project which are unrelated to the actual environmental impacts. So, it is really an assessment of the political, not the environmental, impacts of a project. And that is wrong. 

All we are saying is that there should be an evaluation of existing criteria. If you know in advance you have to do an EIR if your building is over 200,000 sq. ft. or 400,000 sq. ft. or whatever the threshold is determined to be, tell people. We need to obviate this obviously discretionary and wholly unguided use of the environmental process by people who are not elected to make those judgments. Remember aside from hillside areas, most of the City is urbanized. The primary "environmental" condition arises from transportation (e.g. emissions from cars). Nonetheless, standard environmental analysis assumes a rather pastoral state of nature. So you need to analyze biotics in the CBD. This is lunacy but it is the current system. We must do better. 

The related projects lists is also a massive problem. What happens now is that your related projects list, this list of imaginary projects which the law says ought to be reasonably foreseeable but construed to mean anything that anyone has ever heard about, is used as the basis for your traffic model and your "mitigation measures." In the City of Los Angeles, unlike other jurisdictions in the world, the City can decide without any guidance whatsoever to force you to change the related projects list. Then you have to change your traffic model and your "mitigation" package. 

And because there is no time limit to cut this off, many people spend two or three years without moving beyond the traffic clearance stage in the EIR process. Even the departments have admitted that this is a problem. I'm confident that this process which has no basis in law or fact will be discontinued. 

Under Building & Safety, DRC makes the recommendation to co­ordinate all fire inspection and plan checking activities by merging the plan checking duties of the various departments into a single unit. Your comment. 

A part of this has already been accomplished pursuant to a motion approved by City Council. All we are saying is that the fire, life and safety jurisdictions, and the Building & Safety Department overlap. This causes conflicting opinions over building requirements. This redundancy and resulting conflict must be resolved. 

Our proposal is really meant to merge their functions. We don't care where they are physically housed. We just want them to function as one integrated unit.

Another recommendation related to development fees would eliminate the provision for developers to pay special or extra processing fees for additional staff or special development processing service. The justification for this recommendation?

This is an amazing phenomenon. What happened is that the planning departments have become so totally unable to "process" land use applications within any rational time frame, that they will tell the larger developers their projects can be processed in a normal time frame, if they pay the departments extra money. Having created a process which no one can get through, the departments extort more fees to process an application in a more expeditious fashion. The irony is that in past instances it has taken developers months just to negotiate the additional fees to get their projects "worked" on. This is straight out of Joseph Heller's Catch-22. It's madness. 

My response is don't do that; fix the whole system so you don't have to pay people to do the work they are already paid to do. And if you look at the Progress L.A. report, you'll see the incredible manner in which the departments of the City of Los Angeles gouge developers, landowners, business people and homeowners in fees, exactions and other mitigation measures from start to finish in a way which is completely unreasonable. This has to stop and it is one of the things killing investment in our City. 

Additional recommendations call for limiting exactions and fees, but each measure allows the Council tremendous discretion in how, when, and/or what. If the devil is in the details, how in your opinion, is the ordinance drafting process going to move forward, and in what time frame?

The ordinance format is not unusual because fees are established by ordinance. This is in part an ordinary review of fees. But what is different about this is that I believe the departments in general, certainly not the commissions and most certainly not the City Council, have never examined from start to finish all the fees imposed on development projects by the City departments. You can't go to a single department to get a list of all of their fees. Somehow we have got to get the decision makers to understand what the total financial implications of building in our city are, and once they understand they will be horrified, particularly in relation to other jurisdictions. 

In 30 to 45 days, every department ought to be able to provide a complete list of fees. One month later, the commissions ought to have their first cut at the reasonableness of these fees. Finally, within two to three months via an ad hoc committee of the City Council, there could be enough hearings for our proposals to go before City Council. In four to six months, there could be an organized review of the City's development processes. 

Normally the City Attorney's office drafts ordinances. However, they have a history of taking from six months to one year to do so. What makes you think you can accomplish your implementation goals in six months or less? 

As a matter of fact, we'll offer to draft them for the City Attorney's office if they are incompetent. I don't think it takes a scientist to say thou shalt pay "x" dollars for "y" service. 

And if the City Attorney's office turns out to be a major obstacle, we'll have to focus a major inquiry on their practices. The are many people who feel that the City Attorney's Office gives ultra - "conservative" (i.e. screw the property owners), highly political advice, not just legal advice. We need a City Attorney's Office that is with this program. The City Attorney is very fond of saying that be is an elected official; well, it's about time his office be held accountable to the people who are most adversely affected by legal and many fear politicized "legal" advice.

Regarding Public Works, DRC recommends consolidating all traffic engineering functions into one department. Your comment. 

The age old policy conflicts between planners and engineers are enough to drive anyone hysterical. On the one hand, if you ask who should require and evaluate mitigation measures at the conceptual planning stage, both Planning or Transportation will say they should do it. If you are in the middle, you will get different requirements from the departments and that is a problem. Then, in the design phase, you have the "widen every street in America" approach at the Engineering Division, and "let's fill the world with ATSAC intersections" approach from the Department of Transportation. That’s nuts.  

We need to get some degree of integration, and we added a very specific discussion to make these departments wake-up and realize what they are doing is counter-productive for society. 

Lastly, on the politics of implementation, what is your prognosis for the DRC recommendations and who are your allies? 

The City Council has been more receptive that some people told me they would be. Clearly, some recommendations are harder than others, but I believe the main proposals will find support. It's hard to argue against fairness and accountability.

We made it easier for council by staying clear of land-use regulations, we merely reviewed process, and I think people understand that. The major reforms in terms of land use have been left undisturbed. As a consequence, I don't think there is going to be much opposition based on the merits. Council members will learn that a lot of constituents with an investment in this City are watching to see if they are capable of doing what's right and not just listening to loud, formula negative voices. 

The bigger obstacles are the departments, and their initial reactions indicate the recommendations are not as bad as they thought. They are saying one of three things: (1) We are already doing that (We believe that!); (2) That's a good idea (wink, wink); and (3) These jerks can go to hell, we are not going to do it at all. 

What is different in the DRC report is that it comes from a group of people who've worked through the whole of the "system" and as such are people who are knowledgeable about the departments, and in some cases more knowledgeable than the people who head the departments. I think you'll find a lot of interest in the City Council to make the departments more accountable. Also, I think you'll see a very diverse group of people, multi-ethnic business groups and consumer groups, clamoring for some type of reform. The biggest challenge will be making the bureaucracy respond in a way which changes their attitudes.

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