Developer sues city for denying permits

Owner of ramshackle apartments still owes city $97,000 in fees

The former owner of a large Evandale Avenue apartment complex has filed a lawsuit against the city that claims he lost as much as $24.5 million when the city opposed his efforts to renovate the apartments after his redevelopment project fell through.

Plaintiff Sal Teresi claims that city officials, under the direction of former city attorney Michael Martello, engaged in "capricious and arbitrary conduct" to prevent him from renovating the 64 vacant apartments at 291 Evandale Avenue, which he ended up selling in the middle of the recession. As a result of the city's actions, Teresi claims he lost $4.5 million in rent over five years and $16-20 million from appreciation of the building.

The issue took center stage in a City Council meeting in October of 2009. Teresi's lawyer claimed then, as Teresi's new lawyer claims now, that Teresi had a right to re-roof and repair the buildings without being subjected to a design review process, which the city officials told Teresi was required June of 2008. In the 2009 meeting, City Attorney Michael Martello disagreed, saying that "under their theory they could rebuild the entire complex" without any oversight.

Teresi's troubles began when he had lined up a buyer for the property just before the recession hit, and decided to vacate the apartments before closing escrow, according to the claim Teresi's lawyers have filed in the case. The sale fell through when the real estate market tanked. After unsuccessfully trying to find another buyer, Teresi needed to rent the apartments again to pay his bills.

Despite the city's orders against it, Teresi got a roof permit through the city's website and began work on the buildings in October of 2008, work which his lawyers say was within his rights as the project maintained a "conforming use" on the property. When the city discovered this, the project was halted, the buildings were red-tagged, and a fence was put up to keep workers out.

While the buildings sat, Teresi claims unfinished roof work allowed rainwater to damage the interior of the apartments, causing the "rank odor" and mold that city officials later complained about.

The City Council voted to uphold the denial of the roof permit to Teresi in 2009. Shortly after the complex was sold, the council approved detailed plans from Bay West Realty to renovate the apartments in May 2010.

Poor conditions cited

Having a new owner pleased neighbors, who apparently didn't trust Teresi and opposed his renovation of the apartments. They saw that the complex was allowed to remain in poor condition for years, with garbage littering the courtyard and the buildings in disrepair. Neighbors often said crime went down when the complex became vacant.

Defending the move to red tag the buildings, Zoning Administrator Peter Gilli cited "life safety issues," such as illegal exterior water heater sheds mounted in spaces formerly used as exits and walkways. Meanwhile city staff observed workers at the complex doing unapproved work on the buildings, with workers camping out at the complex in the process, Gilli said in a staff report. "Staff was concerned people would start occupying an uninhabitable building," Gilli wrote.

In 2008 the city reported that "numerous structures have rodent infestation, insect hives along with dry rot and signs of termite destruction. Numerous units lack working bathroom fixtures, kitchen appliances, lighting fixtures and heating devices."

Other problems reported by city staff include the "presence of rank odor," likely from a broken sewer line, broken concrete stairs and metal guardrails, missing smoke detectors, mold, unvented water heaters and numerous electrical violations.

Teresi's lawsuit claims that the city opposed his renovation work in part because the City Council spent $125,000 of the city's affordable housing funds to relocate the 250 residents of the apartment complex. According to Teresi's claim, "the bulk" of that money went to city administrative costs, which city planners say is untrue. As the Voice reported in 2008, the Community Services Agency administered the relocation funds. The CSA used only a small portion for administrative costs.

City Attorney Jannie Quinn said she was waiting on a revised claim from Teresi's lawyers after several issues with the claim were brought up in court. Quinn had no comments about the ongoing case, but she did say that Teresi still owes the city $97,000 in planning fees for processing his 2007 development request, which could result in the city filing a counter suit against Teresi.

Teresi's lawyer, Susan Reischl, did not respond to a request for comments.


Like this comment
Posted by Old Ben
a resident of Shoreline West
on Jun 2, 2011 at 12:17 pm

Sal Teresi has a lot of gall, which does not in any way make up for his complete lack of brains or heart.

Like this comment
Posted by Spaghetti Freddie
a resident of Old Mountain View
on Jun 2, 2011 at 12:24 pm

The fact that Teresi was able to get a permit online pretty much refutes any claim the city has to competency on this one, in my mind. If he wasn't supposed to get a permit, than the city should not have issued one, online or otherwise. I swear to goodness my head will explode if the city staff comes back and asks for more money bacause the online process they designed is flawed.

The fact of the matter is that the city of Mountain View has numerous blighted areas that seem to have become that way because city staff and council are more interested in bureaucratic process than they are in problem solving. It seems pretty clear from what I'm reading here that the city did nothing but make a bad situation worse.

I would love it if the city would just try to find solutions to our problems, instead of involving themselves in fights that ultimately require them to legally defend themselves. It's kind of expensive and there might, just maybe, be a better use for the money.

Like this comment
Posted by Cathy
a resident of Cuesta Park
on Jun 2, 2011 at 4:42 pm

I agree with Old Ben. The fact that the guy got a permit, from the city of Mountain View, to do repairs on the roof, well, that says it all!! And then, the guy is trying to make the place nice, livable, and the city shuts down the project and let's the property go to ruins... now, you tell me, who is the guilty party here?

Like this comment
Posted by Steve
a resident of Sylvan Park
on Jun 2, 2011 at 5:16 pm

City staff under Duggan and Martelo seemed more interested in pusuing their own empire than serving the needs of Mountain View citizens. Completely predictable they would hang Teresi out to dry for not offering proper tribute. Should he prevail in his suit, It's we citizens who will pick up the tab for their arrogance. Let's hope our new manager remenbers they all work for us, not the other way around.

Like this comment
Posted by ann
a resident of another community
on Jun 2, 2011 at 8:54 pm

here's to the property owner winning this one....and he staff has an automatic conflict of interest in helping a property owner get a permit to do anything....the more they can draw it out and run the fees up....the more goes into the kitty for their inflated pay scales and hugely inflated pensions and medical benefits.. something happens to people when they become government employees ...and that includes the elected..

Like this comment
Posted by developer
a resident of Old Mountain View
on Jun 3, 2011 at 10:38 am

Sal: Align yourself with other developers who have had similar issues
with the City, such as Toll Brothers, Jazz builders,Classic Communities and others who have encountered CED hauranging, ordinance, BMR, design and legal dis-agreements while procuring entitlements. Seek their declarations and/or amalgamate into a class action suit. Expose the "My Way or the Highway" Martello Regime.

Like this comment
Posted by QM
a resident of North Whisman
on Jun 3, 2011 at 11:56 pm

Sal is crying in his soup after time has past and his former apartments bear a new address and are thriving in the shadow of the Google Empire. Sal The Slumlord gave his tenants the Abner Louima treatment and gave his finger to the city. His blue tarp roofing and gang infested fenced off apartments screwed over the Hamwood Neighborhood, and dragged down property values for years due to his GREED Sal was given and unheard of R4 designation which would have allowed him to build an epic apartment complex, but he could not pull it off, and the taxpayers of Mountain View paid to clean up his stink pile. -- BMR funds are for Teachers, Police and Firefighters. -- This mess is a self inflicted wound and everyone involved needs to get over it and move on.

Like this comment
Posted by DCS
a resident of Old Mountain View
on Jun 4, 2011 at 9:23 am

@QM-This is off-topic, but teachers, police and fire fighters make way too much money to qualify for BMR. I really do not know the type of profession that qualifies for BMR but the salary would have to be ~54K/year for a family of 4.

Like this comment
Posted by Agree
a resident of Rex Manor
on Jun 7, 2011 at 2:48 pm

Agree with DCS and Developer. File a class action suit and do away with BMR. Let us not forget that the driving force behind passing BMR in 1998 was to keep public safety in the City - what a false pretense especially with what these guys retire on! NOW WE ALL PAY FOR BMR AND HAVE TO LISTEN TO PONTIFICATING COUNCIL MEMBERS FALL ALL OVER THEMSELVES OVER HELPING...WHO? GETTING MORE HELP FROM THE FIRE UNION?

Sorry, but further commenting on this topic has been closed.

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