March 3, 2011 - From the February, 2011 issue

L.A. First Deputy Mayor Austin Beutner's Development Reform Effort Assessed

At the end of 2010 news leaked that the ill-fated "12-to-2" program had been scrapped and that First Deputy Mayor Austin Beutner had hired a consultant to reform the process by which the city approves projects. The following article is written by former Latham & Watkins land use attorney Katharine Young (currently of counsel at Parsus LLP and a Coro Fellow) to provide insight into the effort to reform L.A.'s byzantine development approval processes.


Katharine Young

At the invitation of Los Angeles City Building and Safety General Manager Bud Ovrom, select representatives of the city's real estate development industry gathered at the L.A. Chamber of Commerce headquarters on February 7th to offer input into what was described as a new, second term effort at "comprehensive revision" of the city's entire approach to processing development projects. Mr. Ovrom noted that the mayor "was not satisfied (to put it mildly) with the pace of development reform during his first term." He tasked First Deputy Mayor Austin Beutner with creating a development review process that is "efficient, transparent, and consistent."

The well attended meeting at the Chamber-the first of three such sessions aimed at gathering developer feedback-was facilitated by KH Consulting Group, a private firm retained by the city for approximately $590,000 to spearhead this new reform initiative process and eventually generate a "Strategic Plan with Action Plans that outline what should be done, why it should be done, who should do it, and when it should happen." KH Consulting also scheduled four community outreach meetings to gather broader input, as well as additional meetings with city staff and elected officials.

Over the course of more than two hours, this facilitated reform discussion at the L.A. Chamber revealed a disconnect between developers in attendance and KH Consulting's President Gayla Kraetsch Hartsough regarding what was necessary to facilitate a more efficient, transparent, and consistent city development approval process.

The real estate development representatives- many of whom noted their involvement in past Los Angeles City development reform initiatives dating back nearly 30 years-repeatedly cited the need for updated and enforceable community plans, as well as a streamlined application process to eliminate current redundancies across departments. Many attendees identified a key underlying shortcoming of the city planning process to be outdated planning and zoning documents that developers and their representatives now work around rather than with.

Many attendees argued that real transparency and consistency would flow from updated and enforced planning documents. Specifically, attendees wanted both revised community plans that incorporate zoning reflective of current local land use expectations and comprehensive environmental review-including EIRs and associated impact studies-that analyzes the environmental impacts of the land use changes mandated in the updated community plans. If stringently enforced, these updated community plans would potentially remove most future project applications from the city's discretionary review process, making them "by-right" (i.e., the city would merely confirm a proposed project's compliance with a community plan's applicable land use and zoning provisions and issue appropriate permits). This, in turn, would free city staff to focus on those large projects that will continue to require discretionary approvals. Given recent reductions in planning staff levels, the removal of a significant number of projects from the discretionary approval process is key, many in attendance claimed, to making the development review process not only predictable, but also more efficient and consensual.

As one attendee lamented, at least five community plan updates were all-but-complete and ready for Planning Commission review as of last year. Nevertheless, these updated community plans, paid for with legally dedicated city funding, remain unapproved.

In reaction to this input, Ms. Hartsough countered that KH Consulting was "asked [by the Mayor's Office] to do the process improvement from the point of: ‘a decision's been made to build, how do we improve the process so that buildings that meet the plan can get through the process?' So, we're not re-engineering how [the] planning [department] does community planning." It appears from her comments that community plans are not on Ms. Hartsough's reform to-do list this year.

Rather, Ms. Hartsough asked for "short-term technological solutions before we can come up with the large solution." According to Ms. Hartsough, the mayor is focused on a full technological solution involving "a city-wide [technology] platform [that] could be $15 million and could take two to three years to implement." The new technology, she asserted, would provide a single web-based access point for developers to obtain information on the status of their project application. It would not, however, revise any of the underlying planning documents upon which land use decisions in the city of Los Angeles are based. Ms. Hartsough acknowledged that the funding for such a technology platform has not been approved by the City Council, and that approval of funds could prove difficult given the city's current fiscal woes.

Review of an audio tape of the meeting reveals much frustration in the room, as developers pushed back on the effectiveness of a quick technology fix, noting that the city's development reform goal of creating an "efficient, transparent, and consistent" planning process requires, at a minimum, up-to-date community plans: "[I]f you knew really what the baseline was, it'd be much easier to figure out what the latitude is in either direction. Right now, there's no baseline." Another veteran developer agreed, asserting that community plan updates should be the first priority: "[T]hat's number one. We need to figure out how we're going to get there." A third participant, a former chairman of the Chamber of Commerce, in contrast, expressed fear that a city community plan update process could be used to delay processing of interim development applications.

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As the facilitated session neared its conclusion, a number of participants expressed doubt as to the feasibility of implementing any strategic plan halfway through the mayor's second term, citing power dynamics at City Hall. Unions, general managers, land use expediters, lobbyists, and City Council members, attendees opined, all benefit from the current dysfunction and therefore continue to serve as barriers to long-term, meaningful development reform in Los Angeles. Specifically cited procedural barriers to development reform implementation also include existing term limits for Council and departmental staff turnover and reductions.

City employee unions, who have thus far successfully resisted major departmental streamlining, and department heads wary of ceding turf received some of the blame. Referred to by one developer as the "elephant in the room," unions were credited with playing at least some role in the abandonment of the mayor's most-recent development streamlining proposal. Known as "12 to 2," the streamlining program sought to reduce the number of sign-offs required on a particular project from at least 12 departments to just two. Such a program would likely have resulted in city employee layoffs. Those present at the February 7 meeting agreed that any successful future development reform effort will require union sign-off.

Land use attorneys, expediters, and lobbyists constituted another self-acknowledged elephant in the room. According to one reform meeting attendee, "First of all, let me disclose, I'm a CEQA lawyer, so I'm shooting myself in my own pocket book [by offering reform recommendations]." Nevertheless, he then proceeded to offer several potential reform measures the city could adopt that might accelerate and rationalize the development review process for certain classes of projects.

Many present at the Chamber meeting cynically suggested that the City Council actually benefits from the current discretionary land use development process, dysfunction and all. According to one developer, "I think it's the Council that's slowing the [community] plans down because they like chaos, because they come in and take a piece out of somebody's [project] and put it on the table and...get re-elected. They like the chaos." Another agreed: "...[L]and use has been the most powerful tool the Council offices have to take...the next election. If, for example, the community plans are streamlined, if they implement the zoning code, you're taking a lot of power away from the elected officials...."

Attendees then expressed frustration with a lack of initial buy-in for the reform initiative now before them. They were concerned that the mayor's latest effort did not have up-front City Council support. According to one development process veteran, "This [development reform] plan is driven by the Mayor's Office, as it always has been.... And I think we need to learn a little bit from the last three [development reform] plans... where they were driven by the mayor, really none of them have gone anywhere. I don't think you can minimize or ignore the fact that we have fifteen very powerful council members and they're equally as powerful as the mayor in their own area.... I don't think [the council members] should be sold the plan once you guys put the plan together. They need to be involved from day one."

Other impediments to lasting development reform, according to attendees, are city term limits and staff turnover. A sustained, comprehensive reform of the city's development process would, it was asserted, require a significant, prolonged period of financial and political support from City Hall. One attendee commented, "[Y]ou've got to realize the inmates run the asylum. Two more years for the mayor; half the council will be gone a little bit after that. No matter what you implement, no matter how great these ideas, we're going to have to figure out a way to make sure that they're sustainable." Moreover, several suggested that if rumors of a possible mayoral run by development reform proponent and First Deputy Mayor Austin Beutner prove accurate, this latest reform attempt may be dead before arrival to the City Council.

Given the candid development reform discussion on February 7th, it remains unclear whether Mayor Villaraigosa's latest attempt at adopting comprehensive development process reform will result in any meaningful change in City Hall. As far as most attendees at the February 7 meeting are concerned, it seems unlikely, what with all the elephants crowding the room.

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