Monday, September 17, 2007

Condo Conversions - One More Time

It's that time again. Tuesday night the Costa Mesa City Council will, once again, consider the new ordinance for conversion of apartments to condominiums, or "common interest developments", to use their terminology.

You will recall that this council has botched this process almost from the beginning, when they launched their much ballyhooed Westside plans without giving sufficient thought to the guidelines to be foll
owed. In their haste to reverse Costa Mesa's "upside-down" housing market - 60% renters vs. 40% owner occupied units - and with images of gleaming, new common interest developments popping up like mushrooms throughout the Westside, they neglected to make sure proper rules were in place to make it happen. The many proclamations by council members and citizen activists about letting "market forces" drive the redevelopment on the Westside became words served for lunch as those "market forces" began taking the renaissance of that part of town in a direction the "improvers" hadn't anticipated. So, the brakes were put on condominium conversions of any type, anywhere in the city until they could finally get the horse back in front of the cart.


This issue
has received much press - commentaries and letters to the editor on this and related issues by residents and council members have graced the pages of the Daily Pilot for a couple months. Most recently columnist Byron de Arakal provided his usual insightful analysis last week (here), which has generated some very interesting comments on the Daily Pilot blog and will likely provoke a rebuttal by one or more members of the city council majority. The council, in it's attempt to "improve" our city, has played a shell game with the rules, attempting to force developers to adhere to rules not yet in place. On the agenda for the meeting, in closed session, is an item about "pending litigation". It looks like this sleight of hand will almost certainly cost the city coffers some settlement dollars as they stare down the barrel of litigation once again. Can you say "Barry Saywitz?

So, tune in to the council proceedings Tuesday. In what will likely be a short meeting, the council
majority will once again have the chance to demonstrate their leadership and wisdom - or lack thereof - on this issue. The city staff has provided several alternatives from which the council may choose a solution to this issue. I expect we'll see members of the public representing property owners throughout the city, and on the Westside specifically, address this subject. We'll have a chance to see if, in fact, this council will "listen to the community". I've got my fingers crossed.

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Anonymous Anonymous said...

Byron's posting- and I believe but cannot remember for sure- yours, to the Daily Pilot about Saywitz' Victoria Street project missed the most important point of the 3 hearings held on it. That is, it is legal NON conforming. That is, it does not meet current standards for parking spaces, open space, and is too dense. It CAN remain as apartments. No one is stopping that. But once he applies to change the use to condos these non conformities can be used as FINDINGS to DENY the project. Listen to my question of city attorney Tom Duarte concerning this months ago at first hearing. Listen again to his answer to me at the second hearing. Listen to Kim Barlows answer to the council at the third hearing. You may not respect the improver majority, you may not respect the answers of our city attorneys, but at least mention in your columns their responses instead of salivating over your dream of the city paying big bucks to Saywitz. Come on guys, the whole story would help establish some credibility on your part.

9/17/2007 08:13:00 PM  
Blogger The Pot Stirrer said...

Commissioner Jim,

OK, I did as you asked. I went back and re-viewed each of those instances. In fact, I re-viewed each of the hearings on the Saywitz Victoria Street project in their entirety. I heard Duarte and Barlow's responses. I believe you are correct - the legal non-conformities MAY be used as FINDINGS to DENY the project. That's not what happened, though. The project was APPROVED, not denied, but with conditions to cause the property owner to incur significant financial loss if he went forward as approved. The arrogant interrogation of Saywitz by your colleague, Commissioner Righeimer, on several occasions demonstrated to me that something else is going on here. When Riggy crowed about his "29 years as a developer" and attempted his "third degree" of Saywitz regarding his method of calculating an adequate profit I found myself wondering if that might not have been some envy showing through. Maybe Riggy just isn't as good a developer as Saywitz and is ticked off that Saywitz can find a way to make a good profit and still, following the rules in place at the time, turn out a good project - one that would help positively impact the renter/owner ratio on that side of town. It's my understanding that, according to testimony during the hearings, that ratio is more like 80/20 for that segment of the Westside Overlay Zone. Replacing a dozen apartments with ownership opportunities would certainly be a good step to resolve that imbalance.

I resent your allegation that I am "salivating over my dream of the city paying big bucks to Saywitz." Those are my tax dollars we're talking about. Paying a claim for something like this just means fewer potholes filled and fewer cops and fire fighters on the streets. I don't want the city to be placed in the position to have to pay big bucks to anyone. One way to keep that from happening is for the commissions and the council to play fairly with applicants, and not change the rules because of some pique of envy or other personal problem with the applicant. Before you say it, no, I don't think substandard projects should be approved in the city. Saywitz project was not substandard. Several commissioners and council members, including the mayor, admitted it was a nice project.

I admire your willingness to reject a project because it doesn't meet parking standards. I acknowledge that lack of parking haunts us throughout the city. In my opinion - which is what you read on this blog - Saywitz was following the rules in place at the time. I felt at the time of the hearings, and still do following my re-viewing of them, that the way this was handled was a capricious use of power by some members of the commission and the council. The possibility of legal action on Mr. Saywitz part disappoints me, but doesn't surprise me.

Finally, your allegation that I, and Byron as well, failed to tell "the whole story" is irrelevant. I cannot speak for Byron - he does that very well himself - but I feel no obligation to repeat word-for-word the text of the proceedings. What I provide, whether you like it or not, is my opinion based on my observations of the events in question. I've now watched each of the proceedings three times. Your attempt to spin the issue has not changed my view of the situation. Thanks for writing.

9/18/2007 09:47:00 AM  
Anonymous Anonymous said...

At least we agree the project could be denied due to degree of non conformity. Yes, this one was approved, with a major condition of removal of 3 units to lessen the degree of non conformity. I never stated it was denied. Just that projects could be denied. We approved this so he had an opportunity to develop if it made financial sense. I believe we helped him with the approval with conditions rather than outright denial. At least he has the option of building if it makes sense. If built as 12 condos the project would be a disaster in my opinion as a realtor. Totally stressed living and hard to sell and re-sell. Most likely would become rental units with multiple owners rather than one owner as is the case now. WHY ALL THE FUSS OVER THIS? WHAT is behind this? I would love to know. It would be important to me as a commissioner to know the true source of the uproar from you and Byron. Right now I can only think it is political. The RTRers trying to pin something on Improvers. And therefore a successful lawsuit against the city would make some RTRers salivate. We denied a project on Broadway a week ago and not a peep from anyone.

9/18/2007 12:39:00 PM  
Blogger The Pot Stirrer said...

Dear Jim, The Realtor (I wondered how long it would take for that to come out!)
Balderdash! This is not about politics, it's about fair treatment of an applicant trying to, 1) make some money with his property and 2) take a bite out of the upside/down housing situation in our city. No one who watched the various exchanges between Righeimer and Saywitz will conclude that Riggy's behavior was appropriate. The rest of you maintained your decorum, asked good, probing questions and received good answers. You didn't try to use Saywitz as a punching bag, as Riggy did.

I watched the proceeding you mentioned last week when you denied the project on Broadway. It wasn't the same situation at all, so don't try to make it one. You asked "WHY ALL THE FUSS OVER THIS? WHAT is behind this?" Well, if we expect developers to flock to our Westside to help with the renaissance you have to treat them fairly. That's what this is all about, as far as I'm concerned. This is not about "RTRers trying to pin something on Improvers" - which you make sound like a gang fight, for goodness sake! You're the one politicizing this issue, with your campaign rhetoric on the Daily Pilot blog on Byron's commentary and here. None of the "RTRers" that I know are eager for our city to be saddled with another law suit - that accusation is pure political rhetoric - something I've come to expect from your and your improver buddies. Your solution to a debate when short on facts is to crank up the volume and turn it into a shouting match.

As far as the Saywitz situation is concerned, how much money he makes or doesn't make is none of your business, nor is it mine. He's willing to take the risk on creating units that will sell and sure wouldn't put his resources in jeopardy if he didn't think he could sell them for a profit. No one can accurately predict what the housing market will be in the near future because of the current conditions of the sub-prime loan market and it's ripple (tsunami?) through the economy. If his, or any other common interest development in the city, ends up being rental units, SO WHAT?! Would you establish a dictatorship in this city that tells property owners that they cannot rent their home to another? Is that what you're all about? Sure sounds like it.

I guess a year is not too early for you and your pals to begin campaigning, huh? The ballot looks like it might get crowded, with you, Riggy, maybe Sam Clark, Eric and who knows how many others fighting for the three seats available. Just remember that, as you go about pontificating and posturing for the crowd, there will be those of us watching and reporting.

9/18/2007 02:36:00 PM  
Anonymous Anonymous said...


Can the RTR crap, will ya? Nothing is behind this.

I, as a columnist and an observer of the city, am trying to square how a majority of the city council - which promised westside improvement - plans to actually pull it off when it insists on standards that just don't pencil for most of the legal nonconforming apartment parcels on that side of town. The residential overlay is meaningless unless the develoment community actually does something with it. Based on what I'm seeing - and what I've heard from other developers and the BIA -the council doesn't seem to appreciate the economics of land development in today's market.

9/18/2007 02:41:00 PM  
Anonymous Anonymous said...

Let's not all assume that Saywitz is an angel and Riggy is a devil. I personally watched Saywitz tear into Riggy outside of the council chambers - it was not pretty. every time Riggy brought up a point about an inadequate roof or inadequate parking or some other deficiency with the project, Saywitz came right back with something along the lines of "I have people living in my garages and I can't evict them" or how am I supposed to make any money, etc. Not answering the question or simply denying the fact brought up. It was heated and very unprofessional on Saywitz's part. Riggy kept his cool and repeatedly tried to keep Saywitz on topic. He eventually had to walk back into the chambers to get away from Saywitz, and Saywitz told his associates what a piece of work Riggy was after he had left.

That does not excuse Riggy's unprofessional grilling, but lets get back to the point on this property. It is too dense, with inadequate parking, and no open space. Why go outside of policy or grant exceptions to a developer who thinks he can steamroll a planning commissioner? Maybe they know each other, who knows, but getting into a heated argument with a planning commissioner who is reviewing your project is truly idiotic.

The PC legally had the option to require the changes it called for. That really is the end of the Saywitz story. He chose confrontation and lost.

9/18/2007 03:03:00 PM  
Anonymous Anonymous said...


How do we redevelop the Westside if we just replace the existing dumpy apartments with crappy small condos? That is a question, not a challenge. I am totally for revitalization as the market dictates, and I have a personal motive as well - I want to stop renting! However, the primary reason I did not take advantage of the City's great homebuyer program is that the only properties available were small, crappy condos with NO yards, and were right on top of each other. I'm not going to spend $400k on an apartment. There are many who will, I'm sure.

We have an opportunity as a city to improve the housing stock. Why not take advantage of it? I agree that deveopers need clarity - lets see what happens tonight.

Just as an aside - my position is not political. I am fiercely opposed to moratoriums and city interference in property rights. But this project had legit reasons to be modified, in my opinion. Of course, I'm a guy in an apartment, not a deveoper who has spent thousands of dollars planning a renovation.

9/18/2007 03:51:00 PM  
Anonymous Anonymous said...


You bring up good points about the balance between a developers right to maximize his profit on a project and what you as a consumer want to buy.

If I were a developer (I am not) I would certainly be paying close attention to the market place and my pool of qualified customers.

The city has no (nor should it) such interest. The city should be paying attention to public safety and quality of life issues. To some extent I believe they honestly think they are doing that.

But the lack of interest in adding developer fees for parks and affordable housing seems to contradict their stated goals.

Has anyone stopped to consider that projects like the one in question may actually be stepping stones to better projects?

Upgrading a depressed area is either going to be an iterative process or requires a big bang approach. Big bangs don't happen unless someone starts using eminent domain. I don't see that happening. I don't want to see that happening

9/19/2007 10:11:00 AM  

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