Developers Seek U.S. Supreme Court Hearing on Suit Against WeHo

Lawyers representing a couple who allege they were charged a $540,000 fee as the price for pursuing a modest condominium project in West Hollywood are asking the U.S. Supreme Court to hear their clients’ case.

The attorneys, members of the Pacific Legal Foundation (PLF), seek reimbursement for developers Shelah and Jonathan Lehrer-Graiwer and are taking aim at the law under which the city acted, known as the inclusionary housing ordinance. The law requires developers to build and set aside a certain number of units, or pay a fee set by a formula as a condition for receiving a permit. The PLF is the nation’s oldest conservative/libertarian law firm and handles cases free of charge if it believes they involve undue government restrictions of private property.

An illustration of the proposed 612-618 N. Croft Ave. project.

The law’s stated purpose is to address the region’s affordable housing shortage, but the size of the fee is not linked to any measurement of affordable housing needs that the proposed development might create, the developers’ attorneys state. City officials admitted that the project on Croft Avenue actually helps meet regional housing goals, but still charged the fee for granting permission to build, the developers’ attorneys stated.

“The Lehrer-Graiwers were victims of a shakedown and we’re asking the U.S. Supreme Court for relief and redress against … the City of West Hollywood,” said PLF senior attorney Brian Hodges. “The Lehrer-Graiwers aren’t to blame for affordable housing shortages. On the contrary, their condominium project would add to the stock of housing. For city bureaucrats to punish them with an astronomical fee … for providing more housing isn’t just unconscionable, it’s unconstitutional.”

But lawyers for the city stated in their court papers that the developers’ case is barred by the statute of limitations. They also stated that the fees were “lawfully imposed, both with respect to their amount and their timing.”

The developers bought two adjacent houses at 612-616 Croft Ave. with dreams of redeveloping them into an attractive and modern condominium complex, their attorneys said. “After a delay due to the financial crisis, they were prepared to move forward in 2011, but the city then made its six-figure demand in affordable housing fees, the PLF lawyers said.

The developers paid the fee under protest and then sued in December 2012. Their case rests on major Supreme Court precedents which require that land use permit conditions must be linked to some public need created by the project, their attorneys said.

The Second District Court of Appeal affirmed Los Angeles Superior Court Judge Luis Lavin’s June 2015 ruling in favor of the city, and the state Supreme Court declined to review the case, the developers’ attorneys said.

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Rose
Rose
3 years ago

Was there really a “shake down”? The developer could have not been able to afford the city fees, and could have said “no” and not proceeded with their development. I have heard several property owners financially unable to develop single lots for years due to all sorts of costs, historic preservation. FAIR? No … but this is a property developer. A businessman trying to make a legal monetary profit. A lot of developers fail at many points in their business project. The case sounds/is worded like a resident had their primary/only home/residence is some $500,000 condo in weho. Property Values… Read more »

Vigilant
Vigilant
3 years ago

@ Cy Husain: Among many, this is your finest and most relevant comment yet. This should be an example of substantiation of facts and accuracy, a little respected ingredient. Speculation in residential properties is a rapidly spreading g virus that leads to Monopoly like practices which is not a game.

Cy Husain
3 years ago

Bryan some very misleading un-normalized data being presented there! Database Normalization, or simply normalization, is the process of organizing the columns (attributes) and tables (relations) of a relational database to reduce data redundancy and improve data integrity. When you present un-normalized cherry picked data it’s a form of deception. Cherry picking being defined as suppressing evidence, or the fallacy of incomplete evidence in the act of pointing to individual cases or data that seem to confirm a particular position, while ignoring a significant portion of related cases or data that may contradict that position. Many of the countries in the… Read more »

Bryan
Bryan
3 years ago

Jim C: “The US is the only developed nation that either through higher taxation or national pride, has a homelessness problem anywhere near the magnitude that exists here.” Really? The US has much lower rates of homelessness, on average, than many other Countries (see, for example,: https://en.wikipedia.org/wiki/List_of_countries_by_homeless_population ). LA is its own beast, not because our developers are uniquely avaricious but because our zoning laws make it so difficult to build. From the article: “City officials admitted that the project on Croft Avenue actually helps meet regional housing goals…” The plaintiffs are trying to build new housing, and instead of… Read more »

Jim C.
Jim C.
3 years ago

You people make me sick. If you think that the fee is ‘onerous’, and way more than inclusionary housing costs, you had the option of including affordable housing units in your complex instead of paying a fee. I have absolutely no sympathy for developers’ claims that the fee was excessive, and go ahead and pay it. If you can afford a $500,000 fee, then boo hoo, you are not going to make as much profit as you planned. I very seriously doubt that the fee is going to break you or you wouldn’t have paid it. I realize that you… Read more »

Cy Husain
3 years ago

In light of recent political victories mandating affordable housing (Prop. JJJ and Prop. H), it was only a matter of time that wealthy developers would go to court seeking a ruling to undermine affordable housing. Having been an activist on the issue of affordable housing and many others, I never thought my opponents would strike so close to home. Now I’m NOT paranoid, it would be the ultimate validation of the importance of my social and political activism if I were singled out and, I doubt these whiny capitalist bullies would pick a confrontation with someone with a history of… Read more »

Larry Block
Larry Block
3 years ago

Very Interesting!

Todd Bianco
3 years ago

While $540,000 may sound like a lot, it’s barely enough to cover the cost of two affordable housing units (excluding the cost of land). Since very few cases are granted cert by the SCOTUS, odds are against the plaintiffs. But unfortunately, this is the kind of case that a very business-friendly Court likes to hear and hand a victory to private developers. If it were to invalidate the fees in this case, countless cities across the country would face identical lawsuits and it would upset what little funding goes to affordable housing.

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