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An attorney with a long history of challenging Palo Alto’s housing policies has filed a lawsuit in a bid to reverse the City Council’s recent decision to develop affordable housing on a downtown parking lot.
David Lanferman, an attorney with Rutan & Tucker, filed the lawsuit on behalf of a group called Downtown Vibrancy, which he wrote consists of “merchants, businesses, residents, and property owners in the Downtown Palo Alto area, many of whom are the owners of properties that have been assessed for the acquisition, improvement, and maintenance of Downtown Palo Alto parking facilities for decades.”
Lanferman had previously represented downtown developer Charles “Chop” Keenan, who successfully sued the city over its failure to use the parking in-lieu fees it collects from developers for their intended use: adding parking. The city ended up refunding about $900,000 to Keenan and dusting off its discarded plan to build a garage on the corner of Hamilton Avenue and Waverley Street.
In the new lawsuit, Lanferman similarly contends that the city is failing to comply with its own laws pertaining to parking. In this case, he is claiming that the City Council has no right to change the use of downtown parking lots, which had been funded through assessments levied on the property owners in the University Avenue Parking Assessment District.
Since its inception in the mid-1970s, the city had been levying assessments on more than 200 downtown properties. Through these assessments and bonds, Palo Alto was able to add 20 parking lots and build two garages in the downtown area, according to the suit. This includes Lot T on Lytton Avenue and Kipling Street, a site that the council deemed to be ideally suited to accommodate affordable housing. In January, council members selected the nonprofit Alta Housing to build a seven-story development with about 80 apartments on the lot.
Lanferman argued in the suit that this isn’t legal.
“The Defendants’ actions, as alleged herein, are in derogation of the rights and interests of the Plaintiff’s members, who have been assessed to pay for the acquisition, improvement, and maintenance of Lot T and other parking facilities, as well as are in derogation of the City’s public commitments to dedicate those parking facilities solely for the purpose of providing off-street public parking to serve the Downtown community,” he wrote in the suit.
The legal action isn’t entirely surprising. Lanferman had consistently opposed the city’s parking lot plan, which is among the programs that Palo Alto included in its Housing Element, a blueprint for adding 6,086 apartments by 2031. He had registered his opposition in letters to the city and to the Department of Housing and Community Development, the state agency that reviewed and ultimately certified the housing plan. Just before the council was set to vote on the lot conversion in January, Lanferman submitted a letter questioning the legality of the move.
“Notwithstanding the importance of affordable housing, and Palo Alto’s State-mandated need for more affordable housing, it is even more important that the City Council be put on notice and acknowledge that it would be exposing the City to significant legal risks if it proceeds with the threatened actions as this time,” Lanferman wrote at the time. “While the Downtown owners and businesses strongly support well-planned efforts to provide more housing in Palo Alto, such as the ongoing efforts to revise Downtown zoning and development standards so as to allow and encourage housing, the City’s pursuit of housing should not come at the expense of injuring Downtown retailers or disregarding the legal rights of property owners that paid for the purchased and ongoing maintenance of Downtown parking lots over many years.”
He is not the only one who made this argument. John Shenk, CEO of the Thoits Brothers, a property management company owns numerous commercial sites in the downtown area, spoke out against the lot conversions during the Jan. 21 meeting and suggested that the move is legally questionable.
“It is clear there is a huge misunderstanding in the community,” Shenk said. “Lot T is part of the Downtown Parking Assessment District. Lot T is not the general public’s property. It can only be used as a public parking facility until the Assessment District members vote to authorize a change.”
The suit, which Lanferman filed in Santa Clara County Superior Court on April 21, asks the court to rescind the council’s January action and effectively halt negotiations with Alta or any other developer who may be interested in converting downtown lots. He is also seeking a declaration that city officials “breached their fiduciary duties by failing to acknowledge and respect the rights and equitable interests of the owners of properties that have been assessed or otherwise contributed to the acquisition of the Parking Lots.” And he is asking the court to rescind any council direction that would expend parking fees for work relating to the conversion of Lot T to housing.
While some downtown developers formally opposed the lot conversion, all seven council members agreed that the project is worth pursuing. They also asked Alta Housing to build at a greater height than the developer had previously proposed. Council member Keith Reckdahl suggested that the building be as high as it can, while still retaining adequate parking.
“I think parking will be the limit,” Reckdahl said during the discussion of Lot T. “Affordable housing – we have such demand for it. This is a great site. We want to make the most of this lot.”
