Redondo Beach Waterfront, LLC v. City of Redondo Beach

• Decision Date: 09 July 2020
• Docket Number: B294659,B291111
• Citation: 265 Cal.Rptr.3d 556,51 Cal.App.5th 982
• Court: California Court of Appeals Court of Appeals
• Parties: REDONDO BEACH WATERFRONT, LLC, Plaintiff and Respondent, v. CITY OF REDONDO BEACH, Defendant; Building a Better Redondo et al., Intervenors and Appellants. Redondo Beach Waterfront, LLC, Plaintiff and Respondent, v. City of Redondo Beach, Defendant and Respondent; Building a Better Redondo et al., Intervenors and Appellants.

51 Cal.App.5th 982

265 Cal.Rptr.3d 556

REDONDO BEACH WATERFRONT, LLC, Plaintiff and Respondent,

v.CITY OF REDONDO BEACH, Defendant;

Building a Better Redondo et al., Intervenors and Appellants.

Redondo Beach Waterfront, LLC, Plaintiff and Respondent,

v.City of Redondo Beach, Defendant and Respondent;

Building a Better Redondo et al., Intervenors and Appellants.

B291111

B294659

Court of Appeal, Second District, Division 3, California.

Filed July 9, 2020

Certified for Partial Publication.^*

Angel Law, Frank P. Angel and Ellis Raskin, Santa Monica, for Intervenors and Appellants.

Shumener, Odson & Oh, Betty M. Shumener, Henry H. Oh, and John D. Spurling, Los Angeles, for Plaintiff and Respondent.

Mintz Levin CohnFerris Glovsky and Popeo, Jonathan Welner, Antony D. Nash, San Diego, and Samantha J. Duplantis, San Francisco, for Defendant and Respondent City of Redondo Beach.

INTRODUCTION

LAVIN, J.

In this consolidated opinion, we decide two of the multiple appeals currently pending in this court related to a proposed waterfront development project (the Project) in the City of Redondo Beach (the City).

In 2010, a majority of the City's residents supported improving the waterfront area and to that end passed an initiative laying the groundwork for the City to establish a public-private partnership with a real estate developer. Respondent Redondo Beach Waterfront, LLC (the Developer) has worked with the City and has apparently expended more than $14 million since 2010 in an effort to move the Project forward. In 2016, however, residents of the City passed an initiative (Measure C) that would, if applied to the Project, substantially curtail the Project. The Developer, the City, and individual residents and resident groups (including appellants Wayne Craig, Martin F. Holmes, and Building a Better Redondo, collectively the Residents) are now engaged in Project-related litigation on several fronts.

In the published portion of this opinion, we address the primary legal issue presented in this case: whether the Developer has obtained statutory vested rights regarding the Project as against the City and if so, whether those rights vested before or after the passage of Measure C. The Developer contends it obtained vested rights under Government Code section 66498.1, which provides that a local agency's approval of a vesting tentative map confers upon a developer the right to proceed with development in substantial compliance with the ordinances, policies, and standards in effect at the time the vested tentative map is approved. It is undisputed that the City approved a vesting tentative tract map for the Project prior to the passage of Measure C. The Residents argue the statute does not apply to projects located in a coastal zone (and specifically does not apply to the Project) because such projects require the approval of the California Coastal Commission (Coastal Commission) under the California Coastal Act of 1976 (Coastal Act). Their position is unsupported, however.

Although the Residents attempt to make this issue a complicated one, it is not. The City deemed the vesting tentative tract map for the Project complete before city residents passed Measure C. We therefore conclude, as the trial court did, that the Developer has obtained vested rights against the City under Government Code section 66498.1 and those rights vested before the passage of Measure C. We also reject the Residents’ subsidiary argument that the vested rights issue is not ripe for decision. Accordingly, we affirm the judgment in favor of the Developer.

In the unpublished portion of this opinion, we address the Residents’ appeal from an order of the court finding they were not a "prevailing party" or a "successful party" in this litigation—a ruling that precludes them from recovering litigation costs under Code of Civil Procedure section 1032 as well as attorney's fees under Code of Civil Procedure section 1021.5. Because the Residents did not fulfill their litigation objective, i.e., they did not obtain a ruling that would allow Measure C to be applied to the Project, and did not obtain any significant benefit in the litigation, we affirm the order.

FACTS AND PROCEDURAL BACKGROUND¹

1. The Waterfront Project

The Redondo Beach King Harbor Pier area (the Waterfront) has been, by all accounts, in need of improvement for some time. In 2010, city residents voted on and approved Measure G, which authorized an additional 400,000 square feet of net new development on the Waterfront. Measure G, and specifically the zoning ordinances contained within it, sought to amend the City's local coastal program² to permit development in the Waterfront area. The Coastal Commission subsequently certified the amendment and the newly-passed zoning ordinances went into effect.

In order to facilitate improvements in the Waterfront, the City acquired leaseholds and other property interests in the area and sought out a private developer to assist with the Project. The City represented that the Project would include renovation of 150,000 square feet of existing building area and up to 400,000 square feet of new development. Ultimately, the City selected CenterCal Properties, LLC, the Developer's predecessor-in-interest, as the developer for the Project.³ In 2013, the Developer and the City entered into an exclusive negotiating agreement regarding the Project.

In June 2016, the Developer submitted an application for approval of the Project which included a vesting tentative tract map. The City notified the Developer in writing on June 23, 2016 that its application for approval of Vesting Tentative Tract Map No. 74207 (the Map) was "deemed complete."

In early August 2016, the Harbor Commission certified the Environmental Impact Report (EIR) and approved the coastal development permit, conditional use permit, Harbor Commission design review, and the Map for the Project (collectively, Waterfront Entitlements). The Harbor Commission's decision was appealed to the City Council, which approved the Waterfront Entitlements on October 18 and 19, 2016 by Resolution No. CC-1016-099.⁴ The resolution explicitly noted that the City's approval of the Map "shall confer a vested right to proceed with development in substantial compliance with the ordinances, policies, and standards described in Section 66474.2 of the Government Code of the State."

In January 2017, the Project continued to move forward as the City and the Developer signed an Agreement for Lease of Property and Infrastructure Financing (the Agreement) that (among other things) identified specific parcels of land the City would lease to the Developer in connection with the Project. Although the Agreement largely preserved the City's right to approve or disapprove the Developer's plans for any reason, it acknowledged the City might have preexisting obligations to the Developer regarding vested rights that would be unaffected by the Agreement.

2. Measure C

Although the City and the Developer were moving forward with the Project, residents of the City had concerns about the proposed development. On June 28, 2016, five days after the City deemed the vested tentative tract map application for the Project to be complete, the Residents and others submitted a "Notice of Intent to Circulate Petition" to the City seeking to place a local initiative—the King Harbor Coastal Access, Revitalization, and Enhancement Act, later designated Measure C—on the ballot for the next general municipal election. Opponents of the Project gathered sufficient support and signatures from City residents and Measure C was placed on the ballot for the election held on March 7, 2017.

Proponents of the initiative represented that if passed, Measure C would "stop[ ] construction of a waterfront mall adding 13,136 daily car trips and doubling development. If built, 80% of ocean views from Harbor Drive will be blocked by 45’ tall structures nearly 2 football fields long. It paves 1/3 of Seaside Lagoon, eliminates our popular saltwater pool used by 81,000 people each season, and plops a massive 5-level parking structure in the harbor entrance." Measure C proponents urged City residents: "Don't sell out our waterfront and 6 acres of public parks for a pittance in annual lease income. Don't settle for a boat ramp deemed inherently unsafe by every public safety official patrolling the harbor including Lifeguards and Baywatch Captains."

Opponents of Measure C argued that Waterfront repairs were urgently needed and the financially responsible course was to continue working with the Developer. Specifically, they asserted that in the existing public-private partnership, the Developer "[i]nvests in majority of infrastructure," "[c]reates a self-sustaining, environmentally safe, cohesive waterfront," "[a]ssumes responsibilities and costs of operations and maintenance," and "[e]nsures we can focus resources on other Redondo Beach concerns."

In substance, Measure C proposed amendments to two City ordinances⁵ which had last been amended in 2010 by Measure G. Specifically, Measure C contained detailed provisions requiring the expansion and/or preservation of Seaside Lagoon Regional Park, preservation of harbor and ocean water views, construction of a public boat launch ramp, limitation of new off-street parking, and analysis of traffic patterns. Measure C also modified the cumulative development cap definition to include space devoted to parking facilities.

A majority of the voters casting ballots in the March 7, 2017 election voted in favor of Measure C. The City later certified the vote. As required under Public Resources Code section 30514, subdivision (a), the City submitted Measure C to the Coastal Commission, which approved the amendments to the City's local coastal program.⁶

One month after voters passed Measure C, the City notified the Developer that, in the City's view, the passage of Measure C triggered the Agreement's force majeure clause, and that the Project would be delayed.⁷

3. The...