Publication Date: Friday, March 18, 2005
'Palo Alto Process' draws lawsuit
'Palo Alto Process' draws lawsuit
(March 18, 2005) Developer seeks $3 million in damages after four-year quest to build
by Jocelyn Dong
A well-known local real-estate developer filed suit this week against the City of Palo Alto for repeatedly rejecting his building project, calling the much-delayed application "a poster child for what is wrong with the development process within the city."
For more than four years, the firm of Peery/Arrillaga has tried to develop 2300 East Bayshore Road, former home to Scott's Seafood Restaurant and four old office facilities.
The lawsuit, brought by John Arrillaga and his relatives, seeks $3 million in damages and asks for a rehearing of the application.
For years, the city's lengthy approval process has been a source of frustration for local real-estate developers, who claim that nit picking costs them plenty in revisions of architectural plans and the loss of rent.
Palo Alto's way of doing business even drew fire from City Auditor Sharon Erickson, who called the planning process "duplicative, redundant, uncoordinated and wasteful" in a 2003 report.
Last May, the City Council approved an overhaul of the system.
The Peery/Arrillaga project received its first denial from the Planning and Transportation Commission back in Sept. 2002, which was followed by the council's rejection that December. More meetings -- before the Architectural Review Board, planning commission and council -- ensued in 2003 and 2004.
In November, the City Council denied the project once again, saying the 73,932-square-foot office building just east of Highway 101 wasn't compatible with the city's master plan for the Baylands. Council members argued the new office building would increase traffic, despite a staff-supported report that stated traffic levels would be acceptable.
Council members also called the land a "gateway" to the Baylands, which should encourage people to walk and be sensitive to the environment.
Among the complaints made in the lawsuit, Arrillaga's attorney, William Ross, charged the city failed to process the application in a timely manner due to "insistence on meeting undefined development standards." At one of the Architectural Review Board meetings, board members suggested the project architects come back with a more "inventive" building design.
"We've been working with the city for 4 and a half years on this project, and haven't been able to get approval. If an experienced developer and good citizen in the community isn't able to build a building on 101 and Embarcadero, with a project that meets or exceeds all design & zoning requirements, how is anyone supposed to do it?" said Jason Peery of Peery/Arrillaga.
Under the new streamlined process, which gives applicants a limited number of hearings, the council's denial last November meant the developer would have to come back to the city with new plans. Peery said he is doing so. The new designs, include garden areas, a plan to manage traffic, and a wall of poles along the road for a visually softer effect.
"Frankly, we thought the previous four designs were more beautiful than most of the buildings out there," Peery said.
Council member Bern Beecham said he couldn't recall another suit filed on a land use application during his tenure on the council. "It's quite unusual," he said.
Although he voted to approve the project, Beecham thought a rehearing "would take time and be fruitless."
Mayor Jim Burch said he didn't think the case is valid. But, he added, "We had a disagreement; we rejected the proposal. They have every right to sue."
Senior Staff Writer Jocelyn Dong can be reached at jdong@paweekly.com.
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