By Jorge Casuso

February 26, 2020 -- The City Council on Tuesday voted to halt negotiations on the proposed "The Plaza at Santa Monica" project over concerns it may not meet the requirements of California's recently expanded Surplus Land Act.

The unanimous vote came after City Attorney Lane Dilg expressed concerns the proposed 99-year ground lease for the City owned property at Fourth Street and Arizona Avenue could trigger the amended law.

The revised law -- which went into effect on January 1 -- "incentivizes the use of public property for affordable housing and other purposes," Dilg said.

The City will wait for the the California Department of Housing & Community Development (HCD) to clarify whether the amendments apply to the property before taking further action, Dilg said.

Responding to the City's January 23 request for clarification, HCD opined that entering into the lease "would constitute a disposition that could trigger the requirements of the Surplus Land Act," Dilg said.

"While the City reserves its rights with respect to interpretation of the Surplus Land Act, the City also acknowledges that HCD is the state agency responsible for providing guidance on and initially enforcing" the Act.

The proposed 357,000-square-foot mixed-use hotel development proposed by Clarett West has been targeted by a coalition of neighborhood and slow-growth groups who have vowed to stop the project ("Neighborhood, Slow-Growth Groups Band to Defeat 'The Plaza' Project," February 19, 2020).

They note that the proposed project -- which includes a 240-room luxury hotel and 106,800 square feet of creative workspace -- will add 5,000 new daily car trips "in the already gridlocked Downtown."

Opponents have been advocating that the 2.7-acre-site -- which was formerly occupied by surface parking lots and two bank buildings a decade ago -- should be used for a public purpose.

In a letter to City officials dated February 12, the group noted "the City’s ongoing failure to comply with the Surplus Land Act which clearly prioritizes using public land for a public use, including open space.

"You do not appear to be exempt from this law," the groups wrote. "Since Santa Monica is one of the most densely populated cities on Los Angeles’ west side, open space is of paramount importance to residents."

Dilg said the City proactively contacted the developer on December 12 to understand its views of the proposed project.

In an interview with the Lookout this month, Frank Stephan, who heads Clarett West, said the company has been working with the City since it was chosen from among a dozen developers that responded to a Request for Proposal (RFP) for the site seven years ago.

"From our standpoint, this project has been a ten-year vision process by the City of Santa Monica," Stephan said. "It's been a real collaboration with the City."

He noted that the project had been scaled back in 2017 at the request of the City Council and that the revised plan includes 41,557 square feet of public open space ("Plaza at Santa Monica' Project Scaled Back," February 8, 2017).

After receiving guidance from the State, staff plans to return to Council on or before April 28 to seek further direction in open session, Dilg said.