September 19, 2006 - From the September, 2006 issue

L.A.'s Stew of Zoning Laws and Vestigial Land-Use Strategies Complicate Holistic Planning & Joint Use

Even the most straightforward developments in L.A. don't get far without a land use lawyer well-versed in the city's idiosyncrasies. As the city has grown more dense, deals have become more complicated, and the vision of city leaders calling for elegant density has often come into conflict with outdated zoning laws. For some perspective on these conflicts, TPR was pleased to speak with land use attorney Ben Reznik of Jeffer Mangels Butler & Marmaro.


Ben Reznik

Given the density of L.A. and the need for new housing, retail, and jobs, why is there so little joint use? What impedes that kind of development?

The answer is sort of obvious: the zoning codes that we've been operating under for the last 50 years have not accommodated it. We've had a concept of zoning in the city whereby uses were to be separated. In some instances it's worked well; in others, it has not.

As we're trying to embrace the concept of joint use, people and stakeholders who get involved have to be educated about it and made to feel comfortable with it. And I think for some people it's still not L.A. When they think of joint use they may think of Europe or East Coast cities, so there may be some resistance to that concept.

George Lefcoe, formerly chair of both the city and county planning commissions, has noted that more mediation goes on than city planning in Los Angeles. Is the time now ripe for true city planning?

That's the perennial question that's been asked as long as I've been practicing. At some point, I question whether the assumption in that question is correct. I think it's a matter of degree. Planning for some people would be integrated, holistic planning that integrates transportation, infrastructure, residential, commercial. To other people, it's just laying out the entitlement process and saying what you can and cannot build. Can we really have planning without mediation? Does one-size fit all really work in a city as complex as LA? It is unrealistic to think that we can do city-wide planning that will not require some give and take in its application to specific sites.

How realistic is it for cities to do holistic city planning in light of past practice and the fact that school districts, who are the largest developers in the region, are not typically subject to city plans? Is planning in Southern California a futile exercise?

I think some holistic planning has started to take hold. For example, I would argue that L.A.'s mixed-use ordinance-the RAS zones -is a planning statement in terms of what we're going to do with our transportation corridors. And it signals where density ought to occur. Maybe some people didn't see it as a planning tool when it was adopted, but I always did.

Other things should occur that are maybe ordinance-based rather than planning from a general plan. For instance, the city has been sitting on an elder-care ordinance for a long time. Our population is aging; the demographics show that we need to provide housing for the elderly, both active elderly and assisted living. But to get approval for a project like that still requires that you go through a series of variances and a conditional use permit and public hearings and all kinds of processes that we should already have incorporated into our zoning structure.

Has the time come for more by-right development-for the city to adopt plans and zoning that incorporate general plans and community plans? Or is it better to continue with a case-by-case policy by which essentially every land-use action requires City Council review and negotiation?

Even if you had zoning and plans consistent and in place, you wouldn't avoid the latter problem, which is that every action becomes a discretionary action and therefore subject to political results. The notion of by-right development is long-gone. Just because we may have done planning will not eliminate going through a discretionary review. Once you go through the process it becomes political, and I don't think you can avoid that under our system.

If most planning in L.A. is by negotiation and political, as you suggest, then reports that homeowners groups, especially on the Westside, are negotiating what some would describe as extortionary agreements to buy off litigation are understandable. Are such negotiations going on, and what does it say about planning in L.A.?

I've heard of it going on. But I've not participated in it, and I don't know that it's a trend. If it is going on, it says that a project is vulnerable, and because of its vulnerability the applicant is willing to go to extremes to buy some assurance that the project will get approved by cutting a deal and minimizing the opportunity for mischief at the City Council level.

What reforms would negate such practices? Can jurisdictions at least direct negotiated "mitigation fees" back to the project areas in question?

As long as the City Council has the discretion and is not willing to exercise leadership, if you will, then a developer is going to feel threatened. And what comes to mind is the importance, for example, of SB 1818. SB 1818 was designed to add teeth to the state's density bonus laws, which have been on the books for years, but has yielded few affordable housing units.

Under SB 1818, all cities are supposed to adopt density bonus ordinances, and they are obligated to provide a set of incentives and concessions. Additionally, the burden of proof in denying a project shifts to the city. Unless it can find adverse health or safety impacts that cannot be mitigated, the city must approve.

That provided a mechanism for a project that I represented with an affordability component that the community opposed. The council office was looking for ways to support the community and oppose the project, and I used the tools of SB 1818 to pretty much tell the council that they don't have the discretion to deny. And that project was approved.

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I'm convinced that without those tools-the hammer over the head of the City Council-we would have lost. And for all of the speeches given by council members about affordable housing, particularly in transportation corridors, it all would have gone by the wayside because the communities put enough pressure on council offices to oppose them.

Getting back to what enables homeowner groups to exercise that kind of power, pressure, and "extortion,"-they have clout with the ultimate decision makers, the City Council. And I think that's why developers have cut those deals. How to get rid of that or change it? I suppose one way along the model of SB 1818 is to pass more state laws that dictate planning, but that means loss of local control. Local control also carries the obligation to exercise local responsibility.

You and your firm represent a number of project developments in Hollywood. Give us an update on your clients' projects, and on the opportunities and challenges in Hollywood.

Hollywood has hit its stride. It's getting a lot of attention nationally, not just locally, from developers, investors, and Wall Street, and our clients include all of those entities. That's the good news.

We're doing the redevelopment around the Pantages Theater with the Clarett Group and Prudential Realty, and that would be 1,042 apartment units and 175,000 feet of ground retail encompassing two square city blocks on both sides of Hollywood Bl. That's a very exciting project, and it would reinvigorate that area. It would help the Pantages. It would bring a whole community to live there; it would bring neighborhood retail, so it has a lot of exciting things.

The biggest challenge in Hollywood is whether the city can approve projects fast enough and get them in the ground before the spigot is turned off. All you have to do is look at last week's announcement by Combined Properties to back out of the Palladium deal. That was supposed to be a hot piece of property, and they're backing out. And several other projects have been pulled off the Planning Commission's agenda. So Hollywood is certainly not immune from that happening.

I think Hollywood needs to get a couple of major projects into the ground, because that may keep the momentum going if other parts of the city slow down. The condo craze that we've gone through the past five years certainly seems to be coming to a halt, mainly because of economics, not because people don't want the condos.

What I like about Hollywood and most of the clients like about Hollywood is that it is a place where you can build density and be encouraged to do so. But I think it could slow down, and we have to brace ourselves, just as in downtown L.A.

You represented Geoff Palmer in one of the pioneering residential projects in downtown L.A., and Downtown housing development has subsequently exploded. What's going on Downtown today, and what is the promise for further development of housing and services in that market?

Of course Mr. Palmer was building a for-rent product, so he wasn't subject to the idiosyncrasies of the condo market. His projects will continue to do well. Having said that, it got to a point last year where even a developer as aggressive as a Geoff Palmer decided that the values were just not there anymore, that the prices in the Downtown marketplace were too high to build even apartments. So he focused south of Downtown towards USC and successfully bid on the Orthopedic Hospital site, and that will yield somewhere around 1,500 apartments with mixed use.

I think Downtown still has great potential, but I think that many of those so-called "pipeline" high-rises will never see the light of day. The only way to justify a high-rise structure is with some very high-end sales. You can't do it on rentals. No one, in fact, has built a high-rise rental in the city of L.A., or in San Diego during its boom time.

I think we will go through an adjustment period. That's not to say that the downtown revival won't continue; it just won't be as fast-paced. I think what I would call an "adjustment" in pricing downtown is in order. Speculators drove the frenzy, but if we want to bring middle class, white-collar residents downtown, I'd like to see those prices stabilize. I'm going to anger some of my clients by saying that, but that is the reality.

Lastly, this is the year when neighborhood councils in LA are subject to review according to the City Charter. What changes should be made to make the Neighborhood council process more constructive?

I think that neighborhood councils have been operating at a great disadvantage, because they are on their own with little guidance, in complicated areas. For example, just in the planning area, people present projects and there are legal issues-questions of zoning, entitlement rights, etc.-and it's one thing for a neighborhood council to consider whether a project ought to go in or not, but it's inevitable that with some legal issues, neighborhood councils are in the dark. There's no city attorney, no assistance, no planners, and no one to staff them. So overall, a support system is missing.

I know all of that would cost money, but it would help them function better. The irony of course, is that it becomes another layer of process time, and each neighborhood council has committees, so you have to go through their committee first, and then you come before the entire board, so you add more layers, and that adds months to your project. They become bureaucratic in their own right.

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