A state appellate court has upheld the California Coastal Commission's denial of a development permit for a small mixed-use project in Morro Bay.
The court rejected developer Dan Reddell's arguments that the commission violated his due process and equal protection rights, and that its decision was a regulatory taking of property. Instead, the Second District Court of Appeal ruled that substantial evidence supported the commission's finding that Reddell's project was inconsistent with Morro Bay's local coastal plan (LCP).
In 2003, the City of Morro Bay approved Reddell's proposal for six Harbor Street parcels located on the bluff above the city's waterfront Embarcadero. The project involved a 22,700-square-foot buildings containing 5,100 square feet of visitor-serving commercial uses and six single-family residences with a combined total of 17,600 square feet. The commercial uses would be on the ground floor, while the residences would be on the second, third and fourth floors of the building. Because the project site is in a planned development overlay zone and would provide extraordinary public benefits – underground utilities, handicapped-accessible sidewalks, small plazas and a chance to master plan six lots – the city exempted the project from the underlying visitor-serving commercial district (C-VS) zoning standards.
Local resident George Contento appealed the city's decision to the Coastal Commission. Contento argued the project violated the city's LCP and the Coastal Act because the project was inconsistent with the C-VS zoning, had inadequate parking, exceeded height restrictions and would block public views. A commission staff report identified similar issues. Reddell responded by agreeing to remove the fourth floor and increase some setbacks on upper floors. The staff said the revised project would still be inconsistent with the LCP, but nevertheless recommended project approval with additional conditions.
At an April 2004 hearing, the Commission denied the project, finding it inconsistent with the LCP's policies regarding bluff development, visual resources, parking, visitor-serving priorities and community character.
Reddell sued the Commission. San Luis Obispo County Superior Court Judge Barry LaBarbera rejected all of Reddell's contentions and upheld the Coastal Commission's decision. On appeal, a unanimous three-judge panel of the Second District, Division Six, agreed with LaBarbera.
Two of the primary issues on appeal were whether the project would conflict with the underlying zoning's requirement that residential uses be secondary, and, alternatively, whether the project's public benefits qualified the project for an exemption from the zoning standards, which include a 30-foot height limit. The Coastal Commission and the trial court judge found the residential uses were not secondary in light of a residential to commercial floor space ratio of greater than three-to-one. Reddell had argued that commercial was the primary use because of its ground floor orientation and that the square footage for residential garages should not be included in the residential-to-commercial ratio.
As for Reddell's first argument, the Second District cited the city's ordinance: "Whether the determination of primary and secondary uses is based on square footage or some other method, the project violates the letter and spirit of the C-VS zoning designation because it consists of six residential units, many more than the ‘single apartment unit or security quarters' permitted by the regulation, and these residential uses are not ‘commercial uses intended primarily to serve the needs of tourists and other visitors to the city.'"
On Reddell's argument that the project qualified for an exemption, the court deferred to the Coastal Commission. Under the Coastal Act, the commission has "broad discretion to make a benefit/detriment analysis," and substantial evidence supported the commission's decision, the court ruled. The court was similarly deferential regarding the commission's findings on bluff-top development, visual resources, parking and community character.
Reddell further argued the commission decided on the wrong project because the panel did not consider his proposed changes. However, the Second District ruled, "The record shows that the commission considered but was not persuaded by Reddell's revised plans."
Finally, Reddell argued that his claim for damages based on a regulatory taking of property should stand despite the trial court's ruling. The Second District, though, said Reddell's takings claim was not ready for adjudication because the Coastal Commission has not identified what project it will permit on the site.
"The commission has indicated its willingness to review a revised proposal," Justice Steven Perren wrote for the court "There is nothing in the record, and we may not presume, that the commission will fail to do so. Therefore, his [Reddell's] claim for damages for a regulatory taking of property is not ripe."
Reddell v. California Coastal Commission, No. B206428, 2009 DJDAR 18027. Filed December 1, 2009. Opinion modified and certified for publication, and rehearing denied December 29, 2009.
For Reddell: William Walter, Walter & Bornholdt, (805) 541-6601.
For the commission: Rosana Miramontes, attorney general's office, (213) 897-2693.