Palo Alto Weekly

News - April 2, 2010

News Digest

Father, son sue Palo Alto over low-cost-housing

Following in his father's footsteps, Forrest Mozart filed a lawsuit against Palo Alto earlier this month, claiming that the city's affordable-housing program is illegal and amounts to a "special tax" against developers.

Mozart filed his lawsuit just four months after his father, John Mozart, filed a similar suit, arguing that the city is unfairly forcing him to devote 10 percent of his 96-unit "Sterling Park" development on West Bayshore Road to below-market-rate housing.

The younger Mozart's suit pertains to a much smaller project: a 6-condominium "West Meadow Oaks" project on West Meadow Drive. But the argument is the same. Both suits challenge the city's practice of requiring developers to either devote a portion of their projects to below-market-rate (BMR) housing or to pay the city an "in lieu" fee to build affordable housing elsewhere.

The city approved West Meadow Oaks in 2008 with the understanding that the developer would comply with the BMR terms and pay an in-lieu fee. The fee would be 7.5 percent of the project's sales price, which is expected to total hundreds of thousands of dollars.

Though the applicant agreed to the terms, he argues in the lawsuit that he executed the documents "under duress and compulsion." Forrest Mozart's lawsuit also claims that the city "improperly, and without legal or evidentiary justification, arbitrarily set its requirement for payment of the disputed 'BMR in lieu fee,'" — the same argument his father made when he filed his lawsuit in October.

Forrest Mozart's lawsuit likens the fees to a "special tax" and "an arbitrary and unjustified development exaction." It also claims that that the city's practice of demanding that a fixed percentage of homes in a development be below-market-rate houses "unlawfully required the project to bear costs and burdens necessary for the city to cure its existing perceived deficiencies of 'affordable housing' in the community."

Donald Larkin, Palo Alto's assistant city attorney, said the city is planning to go to mediation to resolve the lawsuit with John Mozart.

Fraudulent solar seller forced to repay victims

Richard and Esther Sirinsky wanted to do a good turn for the environment. So in 2008, they decided to install solar panels on the roof of their Menlo Park home. They called a few companies and settled on Beohana Solar Corporation of San Jose.

Esther Sirinsky was particularly impressed with CEO Peter Be, who seemed knowledgeable about the panels he was selling.

"He had the product we wanted. He was very personable. His price was in the proper range," she said.

But unfortunately for the Sirinskys, Be's price turned out to be all too high. After taking their deposit, Be failed to deliver the system, first stalling, then telling the Sirinskys the product was no longer available, according to Esther Sirinsky.

When the Sirinskys demanded their deposit back, he sent only a fraction, Esther Sirinsky recalled Tuesday.

The Sirinskys were not alone, as the Santa Clara County District Attorney's Office later discovered.

Last week, Be, 42, was sentenced to eight months in county jail and ordered to pay restitution of $178,146.90 to 62 victims of his operation.

Most had paid Beohana Solar a $1,000 deposit, but a few paid between $2,000 and $8,000, according to Lisa Schon, deputy district attorney with the county's Consumer Protection Unit.

One customer, a hotel owner, had given Beohana $105,000, Schon said.

Be was convicted of four felony counts of diversion of construction funds and a misdemeanor count of contracting without a license. Be represented himself as a licensed contractor, which he was not, according to a press release from the District Attorney's Office.

The case was investigated by the Contractors State Licensing Board, which licenses and regulates California's construction industry. The probe was "crucial in bringing justice to consumers who became victims of Mr. Be's crimes," District Attorney Dolores Carr stated in the press release.

— Jocelyn Dong

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