â€œFor over 18 months, the city has led [Pace Brothers Construction] down the garden path with promises that â€˜re-designsâ€™ will satisfy concerns, only to pull the rug out from development plans,â€? the suit states.
City councilmembers who voted to deny the project stated that the house was too large and â€œout of balance with the size and scaleâ€? of the surrounding neighborhood of single-story 1,100- to 2,000-square-foot homes.
According to the lawsuit, that attitude is â€œarbitrary and capriciousâ€? and imposes the councilmembersâ€™ â€œown social engineering views on the project, in disregard for the economic impact to [Pace Brothers].â€?
The court documents argue that the developers have a constitutionally protected â€œinvestment-back expectationâ€? for economic return from the property.
Arroyo Grande City Manager Steve Adams said that the city will defend the individually named planning commissioners and city councilmembers.
â€œWe donâ€™t believe the use of the property has been denied,â€? he said. â€œWe donâ€™t feel there are any grounds for the lawsuit because the city council has allowed the applicant to come back, and has put forward conditions to be met for approval.â€?
According to the city attorney, Tim Carmel, the individuals werenâ€™t properly named in the lawsuit, consistent with California law.
â€œThe standards for naming individuals and actually establishing liability are insanely high in California,â€? he said. â€œThereâ€™s nothing even close to it in this case. You have to violate a well-established rule of law and get actually to the specific intent of the individuals, and thatâ€™s not the case pled here.â€?
Whatever the outcome, the case is already shaking up other planning commissioners around the county.
â€œItâ€™s intimidating. It makes you fearful. Will that tactic be used against you merely for exercising your discretion? Am I going to have to hire my own lawyer just because of a decision I make?â€? said San Luis Obispo city planning commissioner John Ashbaugh.
â€œThis is bold-faced intimidation,â€? noted county planning commissioner Sarah Christie. â€œItâ€™s not incumbent on government bodies to assure real estate speculators a profitable return on their investment. If a profit can be made within general plan guidelines, thatâ€™s reasonable. But itâ€™s not reasonable to expect the general plan to be undone in order to maximize a developerâ€™s profit expectation.
â€œThe reason we have creek setbacks is so the public is not saddled with the costs of bailing out homeowners whose house falls into the creek,â€? she added.
Under the claims filed in court, individual city councilmembers Jim Dickens, Joe Costello, Ed Arnold, and Mayor Tony Ferrera, and planning commissioners Caren Ray, Nancy Parker, Doug Tait, and Chuck Fellows could be personally liable for damages, including attorney fees. A press release issued by Pace Brothers Constructionâ€™s attorney John Belsher states that city councilmember Jim Guthrie was not named because he voted in favor of the project at the last hearing. However, Guthrieâ€™s name appears as a defendant on page three of the lawsuit.
The court case is expected to take years to settle, since â€œtakingsâ€? cases involve a controversial area of law with no black-and-white answers.