Pleasanton Weekly

News - August 13, 2010

Oak Grove developers sue Pleasanton to force housing project OK

Claim opponents failed to include development agreement in June 8 referendum

by Jeb Bing

In a move that could impact voter turnout and preferences in the Nov. 2 mayoral and City Council election in Pleasanton, landowners of 562 acres in the city's southeast hills are asking the Alameda County Superior Court to rule that they can proceed with plans to develop 51 large lots on a part of their property for custom homes.

Although Pleasanton voters sided with opponents of the development June 8 in a referendum that overturned the council's approval of the project Nov. 2, 2007, the developers, Jennifer and Frederic Lin, argue in their suit that the referendum only concerned Ordinance No. 1961, which was a Planned Unit Development (PUD) plan for how the lots would be placed, not the project approval.

They claim that the council, as part of its action in 2007, also approved Ordinance No. 1962, which was the more important development agreement that authorized the Lins to proceed with their development. By failing to include 1962 in their referendum, the Save Pleasanton's Hills citizens' group headed by former Councilwoman Kay Ayala missed its opportunity to referend the council's 4-1 vote that allowed the development.

The one council vote against Oak Grove in that Nov. 2, 2007, meeting was by Councilwoman Cindy McGovern, who is now a candidate for mayor in the upcoming municipal election in November. Mayor Jennifer Hosterman and council members Cheryl Cook-Kallio and Jerry Thorne, all candidates for re-election in November, voted to approve Oak Grove. Councilman Matt Sullivan also voted in favor, although he later sided with opponents on subsequent votes as efforts by Ayala's group moved forward.

Karla Brown, a Realtor who also is on the November ballot seeking a seat on the council, joined Ayala as co-coordinator of the citizens' group to back the referendum to reverse the council's approval of Oak Grove.

In a series of legal moves following the council's 2007 vote, Ayala's group and the Lins battled it out in Superior Court, the state Court of Appeal and the state Supreme Court, with the Lins challenging the validity of signatures on petitions Ayala and her supporters filed in early December 2007 to force a referendum.

Superior Court Judge Frank Roesch ruled in favor of the Lins, but that decision was overturned by the Court of Appeal and subsequently the Supreme Court decided against hearing an appeal of that ruling. After two-and-a-half years of litigation that cost hundreds of thousands of dollars, which the Lins had to pay (although no specific amount has been given), the referendum was finally held last June 8.

Curiously, this new suit by the Lins seeking "Injunctive Relief" so that they can proceed under the Ordinance 1962 development agreement that they, the council and City Manager Nelson Fialho signed, was filed the same date although they only delivered a copy of the suit to City Attorney Jonathan Lowell late last Friday. Until then, neither the city nor the public was aware of the lawsuit.

By suing the city and the City Council, the Lins have now brought the local government into the fray -- and the costs -- of the Oak Grove approval issue. Up to now, a majority on the council has monitored the dispute between the Lins and Kay Ayala's group but decided against having its then-City Attorney Michael Roush join in the court cases, thereby avoiding any extra legal costs other than Roush's time in attending court hearings. That decision by the council angered Ayala and her supporters, who spent hours complaining about the inaction at City Council meetings during much of the last two years.

With the approval of the referendum that overturned the council's 2007 vote of approval for Oak Grove, Ayala and the Save Pleasanton's Hills coalition thanked voters and considered their efforts a success. With this new suit by the Lins, they can't be so sure.

If the courts declare the Lins' development agreement still in force, they can proceed to develop Oak Grove, which would include giving nearly 500 acres of their property to the city of Pleasanton free of charge for use as a public park. That agreement also commits the Lins to providing other amenities, including $1 million in traffic mitigation fees, an all-terrain fire truck and an advance on fees future homeowners in their development would be assessed by the Pleasanton school district.

Further, because the development agreement was signed in November 2007, the 30 days opponents have to file for a referendum have long since passed.

Also, while the council carefully sidestepped entangling the city in the Ayala vs. Lins court cases, thereby avoiding any cost to taxpayers, it could now be on the hook for hundreds of thousands, if not millions of dollars in legal fees if it defends itself in the Lins' new lawsuit, where it is the sole defendant. If the council decides to defend the city against the Lins, the legal battle could well extend once again to the Superior Court, Court of Appeal and state Supreme Court no matter which side prevails as the process moves forward.

At its next meeting, on Aug. 17, the City Council is expected to approve a settlement agreement that will award two affordable housing coalitions $1.9 million in (taxpayer-paid) legal fees they incurred in their successful court fight to nullify the city's 1996 housing cap, which the city has now done. In addition, the city also paid its outside counsel Tom Brown $500,000 for his legal services in representing the city in the litigation.

The council could also vote to accept the Lins' argument that the June 8 referendum left Ordinance 1962 in place and allow the Oak Grove project to proceed. That would require a majority vote and no legal costs. The same three who voted in favor of Oak Grove -- Hosterman, Cook-Kallio and Thorne -- still constitute the majority on the council, at least until the Nov. 2 municipal election.

If the council decides to defend the city against the Lins' suit, it will likely argue that Ordinance 1961 and Ordinance 1962 were inseparable, that a "poison pill" provision was inserted into the language of both ordinances that in effect makes one invalid if the other is declared invalid.

But in their lawsuit, the Lins, through their attorney Andrew B. Sabey of the San Francisco law firm of Cox, Castle & Nicholson LLP, argue that the poison pill language was only included in the text of the ordinances and was not "a condition or term in the actual Development Agreement."

"The Development Agreement is an integrated contract and makes no reference to the 'poison pill' language whatsoever," Sabey states in the lawsuit.

"The city has ordered the PUD referendum petition to be placed on the ballot for the June 8, 2010 regular election," Sabey continues in his Development Agreement brief filed the same date. "The referendum, if successful, would set aside the PUD Ordinance. Setting aside the PUD Ordinance will give rise to a claim, already informally asserted by proponents of the PUD Referendum Petition, that referendum will also have the effect of setting aside the Development Agreement even though the Development Agreement itself was not referended and should remain in full force and effect regardless of the outcome of the PUD Referendum Petition."

"Thus," Sabey adds, "the pending PUD Referendum Petition presents a circumstance requiring the city to acknowledge, protect and reaffirm the Development Agreement and the vested rights it confers in favor of the Lins."

If the City Council decides to defend the city against the Lins' claim, the first hearings in Superior Court are expected to start in late spring or summer of 2011.


Posted by BigSurprise, a resident of Kottinger Ranch
on Aug 16, 2010 at 4:50 pm

What a surprise! The people who actually own the land ("Our Hills") wants to decide what to do with their own property. Great now we the taxpayers can pay for a legal battle. Here is the deal nimbys, they are not "your" hills, they belong to the Lins. I don't know who didn't see this coming except all the people in this town with their heads up their behinds.

Posted by Arroyo, a resident of Another Pleasanton neighborhood
on Aug 16, 2010 at 9:14 pm

I remember when Arafat was offered the best deal the Palestinians could ever hope for, only to have it turned down by the militants. I suspect the nimbys of P-Town may one day regret that they did not accept the generous offer presented to them last year by the Lin family. I personally hope the Lins win big..!!

Posted by Wiley Smith, a resident of Jensen Tract
on Aug 17, 2010 at 6:36 am

Oh Great! Ms. Coupon Lady, Angry Kay Ayala, and her co horts, are going to cost the city millions in legal fees. This lady and her minions are just angry, old, disgruntled, Tea Party activists. Cindy Mac, also known as "minnie kay" will be the next stooge trounced in the Fall. Kathy Brown? Busy body, no personality, angry GOP er. She will lose like the rest.

Posted by Not if, but how much, a resident of Downtown
on Aug 17, 2010 at 9:08 am

This is now a no win situation for Pleasanton. The City will likely pay millions we don't have to settle out of court. This is all do to the misguided and selfish leadership of Kay Ayala and Karla Brown.

I think the city should file a lawsuit against them individually for the costs it will incur. Unfortunately there is no law against what they have done. Talk about penny rich and pound foolish.

Posted by Stacey, a resident of Amberwood/Wood Meadows
on Aug 17, 2010 at 1:03 pm

Stacey is a registered user.

What would cost more, buying the land now or paying legal fees?

Posted by Stacey, a resident of Amberwood/Wood Meadows
on Aug 17, 2010 at 1:04 pm

Stacey is a registered user.

City Council candidate Karla Brown should make a statement on this issue. And Fred Watson. The others would be unable to make statements due to their current positions on Council.

Posted by Robert, a resident of Amador Estates
on Aug 18, 2010 at 8:34 am

I agree with Stacy. Where is Karla Brown on this issue? She started this whole mess and now she wants in on the council. When can we hear from you, Karla?

Posted by Patriot, a resident of Carriage Gardens
on Aug 18, 2010 at 9:48 am

I too hope the Lins win this one--they have been extremely kind to the City of Pleasanton--they should not have lost that recent vote--how great it would have been for ALL of Pleasanton. It is sad that Kay was so negatively involved in this issue and my mind says that Karla's positions would mirror Kay's. Also Cindy it truly saddens me that you have been so down on this great project too. I will say this that you have served the community well on the School Board and the Council--I feel that it is time for you to retire from your public service and enjoy your grandchildren, etc. This used to be called the "City of Planned Progress" -- it sure hasn't been that lately. I hope that this issue can be resolved so that the City and the Lins can both benefit. I hope that it doesn't cost the taxpayers of Pleasanton and the City of Pleasanton tons of money in this down economic cycle.

Posted by Fed Up Tax Payer, a resident of Downtown
on Aug 18, 2010 at 10:07 am

This mess was caused by Kay Ayala and Karla Brown who failed to challenge the Lin's project properly. If Kay and Karla will agree up front to be 100% responsible for all legal fees and court costs which the City becomes obligated to pay, then the City should fight the Lin's lawsuit. If Kay and Karla are not willing to put their money where their mouths have been for so many months now, then the City should do nothing. There is no way that us taxpayers should pay a penny more for this mess. Furthter, the City should seek to recover its cost of the meaningless Lin referendum from Kay and Karla.

Posted by pleasanton hiker, a resident of Another Pleasanton neighborhood
on Aug 18, 2010 at 10:27 am

@Stacy, could Pleasanton buy the land, or could there be some sort of conservancy set up to buy the land, develop a little bit of it to off set some of the coast of the purchase and set then rest aside for open space?....kind of like the original deal.

Posted by pleasanton hiker, a resident of Another Pleasanton neighborhood
on Aug 18, 2010 at 10:31 am

I am not a frequent poster....should read "but the land, develop a little bit of it to offset the some of the cost of the purchase and then set the rest aside for open space"

Posted by sickofit, a resident of Amador Estates
on Aug 18, 2010 at 10:49 am

If the referendum was 'meaningless' and the development agreement binding, then why did the Lins spend 650K to promote their position during the 'D' campaign? Come on folks, stop drinking the cool-aid. If the Lins really believed that the development agreement was binding and the referendum didn't matter, why did they spend that kind of money? Why not just let the referendum take place and then they can file their lawsuit. This is just another maneuver by the Lins and their attorneys to try and intimidate the city and the citizens.

Posted by wise, a resident of Pleasanton Valley
on Aug 18, 2010 at 11:01 am

I too hope the LINS WIN THE CASE. We could have had a golf course years ago, we could have had a nice development, BUT NOW WE HAVE A LAW SUIT. Its time we let some development in. WE OUR STILL WAITING FOR THE OPENING OF ISABEL, TO HELP TRAFIC.

Posted by Mr. Geeneeyus, a resident of Another Pleasanton neighborhood
on Aug 18, 2010 at 11:27 am

Questions/comments for the peanut gallery.

A) I thought the GOP'ers,"tea party activists" & their like minded folks were both pro-property rights & would typically be against most forms of government intervention with said policies. If so then the Karla Brown's, "Minnie Kay's" & so forth could hardly be described as any form of conservative by any stretch of the imagination & therefore are simply NIMBY-RINO's, IMHO. (sorry for the acronym blitz)

B) If there were to be a purchase offer to the Lin's it would probably have to include not only the fair market value of the land itself but the value based upon it's value IF it were fully developed. That could be a sum that would likely run in the 100's of million $$$.

C) Doesn't Steve Brozosky, one of the architects of the whole anti-ridgeline movement just happen to live on one of the highest elevations in S.E. Pleasanton, on an exposed ridgeline & on a street named something very similar to his last name who also just happens to own his own little tract of undeveloped ridgeline property too?

Strange bedfellows my friends, strange & ironic indeed.

Posted by Uncle George, a resident of Another Pleasanton neighborhood
on Aug 18, 2010 at 11:45 am

I can't believe the number of people that are posting here that appear to be "let's turn the Tri-Valley into Los Angeles" nut jobs. The majority of Pleasanton voters have said time and again that they don't want the hills developed. Yet, there is a vocal group that seems like they are not going to be happy until every square foot of the Tri-Valley is concrete and asphalt, and our hills look like the hills in Los Angeles, Silicon Valley, Hayward and Berkeley.

Why in the H-E-"double toothpicks" do we give a rat's a** about what these Taiwanese investors? All they want is to make huge bucks from making the Tri-Valley look like the over-developed mess that is Taiwan or Hong Kong.

Posted by Ann, a resident of Val Vista
on Aug 18, 2010 at 2:03 pm

"Let's turn the Tri-Valley into Los Angeles" Give me a break. The deal that the Council negotiated included only 51 homes on a site which could have held 86 and a free park of almost 500 acres. And this on some low, rolling hills to the south of town which are already covered by other housing developments. That's not exactly suburban sprawl. If you had taken a tour of the property, you would have seen that the best views are the ones from the proposed park. It's a lovely park site full of wildflowers and oak trees with very walkable paths. EBRP just opened a park west of Dublin, where land was donated by the developer. There is no comparison. The one in Pleasanton would be so much nicer. It's a shame that all the people who supported this negotiated deal with the Lins didn't bother vote on the 8th and that it had to come to this. I have no liking for law suits, but I can only hope, for the ultimate sake of the residents of Pleasanton, that the Lins win this one.

Posted by ToldYaSo, a resident of Another Pleasanton neighborhood
on Aug 18, 2010 at 2:50 pm

The lawsuit is, of course, NO surprise, and merely by their filing, the owners of the property have "won". The losers? The citizens of Pleasanton, of course! REMEMBER WHO LED US TO THIS POSITION THE NEXT TIME YOU VOTE!!! Oh, yeah, and to call Karla Brown a "GOP-er" is really a misnomer! How about just another self-centered left-wing NIMBY? Study the issues, KNOW the candidates as best you can, and vote accordingly this Fall, folks. Some say all politics is Local; not quite true right now, but still very important! First, we have to get rid of the Pelosi/Reid Gang, and get back to some sensible positions with regard to this country! But, don't forget P'Town also! We deserve the best leadership available at City Hall.

Posted by Confused, a resident of Another Pleasanton neighborhood
on Aug 18, 2010 at 2:58 pm

ToldYaSo says "Study the issues, KNOW the candidates as best you can, and vote accordingly this Fall, folks." and implies that those in City Hall are somehow responsible for the "owners of the property" not being allowed to develop and build on their land.

I thought that the mayor came out in support of the development? How are those "at City Hall" then responsible for the "citizens of Pleasanton" "losing"?

Posted by Fed Up Taxpayer, a resident of Downtown
on Aug 18, 2010 at 5:42 pm

I still want to know who is going to pay the legal fees if the City decides to fight the Lin's lawsuit?????

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