The applicant of a housing project with 92 units and a handful of community members opposing it arrived at an Arroyo Grande City Council meeting neither group was prepared for.
What was supposed to be an appeal hearing of the Arroyo Grande Planning Commission’s approval of a conditional use permit for the proposed Creekside Junction homes became a shortened public comment session where people aired their grievances.
Project appellants Pismo Medical Properties LLC, Arroyo Grande Partners
LLC, and Ray B. Bunnell Revocable Trust requested that the city postpone the public hearing to a later date. Based on staff’s recommendation, the City Council will hold the appeal hearing on April 14.
Appellant attorney Edwin Rambuski asked for a 30-day continuance in a March 23 letter because the staff report for the item wasn’t posted on the city’s website until the afternoon of Friday, March 20.
“Giving appellants and the public literally one business day (or less) to review it before the March 24, 2026, hearing, introduces and heavily emphasizes the Housing Accountability Act’s ‘deemed complete’ lock-in under Government Code § 65589.5(j)(2) as the basis for concluding that certain issues are no longer subject to review,” he wrote.
Creekside Junction will be spread out over two buildings on an almost 2-acre vacant site on James Way. Fifteen percent of its units are meant for people meeting San Luis Obispo County’s Affordable Housing Standards for very low-income households.
The proposed project’s neighbors are Hope Church, medical facilities and offices, the Best Western Casa Grande Inn, and Curl Fitness—some of whom comprise the group appealing the permit awarded to Creekside Junction.
The main complaint is parking.
“Contrary to the applicant’s assertions that it has the parking rights to accommodate the project, it cannot deliver adequate, exclusive, or enforceable on-site parking for the 92-unit project as represented,” the appeal read.
The appellants also claimed that the project isn’t subject to a California Environmental Quality Act (CEQA) exemption because the site abuts Meadow Creek and less than 75 percent of its perimeter adjoins urban uses.
The appeal alleged that the project doesn’t qualify for preferential treatment under housing element law and that an inadequate traffic and circulation analysis took place.
“In addition, in preparation of the hearing, both the hotel and the church pastor have confirmed they have no agreement with the applicant and do not intend to enter into any such agreements,” the appeal said.
Project applicant and former dentist Russell Sheppel has been involved with local controversy before. He sued SLO-based lawyer John Belsher for business dealings in 2018 and 2020.
In 2016, Jonathan Westbay filed a lawsuit against Sheppel, Belsher, and disgraced former SLO development company executive Ryan Wright for breach of contract and property damage related to a development deal in Arroyo Grande. Westbay alleged that Wright and his partners wrote bad checks to pay their share of the mortgage.
In 2014, housing project co-appellant Ray Bunnell—who owns Casa Grande Inn and is one of the landowners who refused to sell their easements that lay along a proposed Bob Jones Trail route—sued Sheppel (then represented by attorney Belsher) and the Kennedy Athletic Club of Arroyo Grande over property easement conflicts.
At the Arroyo Grande City Council meeting, Sheppel said that he had traveled over 2,000 miles to attend the scheduled appeal hearing.
He tried to draw attention to a realtor.com article titled ‘America faces a shortfall of 7.2 million affordable rental homes’ but was unable to complete his comments within the time period.
Because the hearing was no longer on the March 24 meeting agenda, all speakers commenting on the housing project had a minute to voice their opinions—down from the maximum three-minute allotment for agenda items.
Project attorney Chris Guillen expressed opposition to the hearing being postponed.
“It’s been a significant amount of work, time, and cost on behalf of my client to get here today,” Guillen said. “We want to make it clear that this is the fourth hearing on the project under the Housing Crisis Act and there’s only five permitted under state housing law. So, we do anticipate on the 14th, it’ll be the final hearing on the project, and we will receive approval on that day.”
The project received criticism from several clients and employees of Curl Fitness, including group exercise director Lori Riano.
“I oppose this because I think it’s going to take a very important part of people’s lives away,” she said. “I think it’s going to impact the fact that our older population is going to be highly limited by this. The lack of parking, walking, … it’s detrimental to both their physical and their mental health.”
Bunnell also spoke at the meeting, inviting council members to drive by and examine ways to preserve Meadow Creek, before adding a suggestion for Sheppel.
“Maybe Mr. Sheppel would consider going to the city for a community park and get a real nice tax deduction,” Bunnell said.
This article appears in March 26 – April 2, 2026.
“Oops they did it again…” Just another example of weaponizing CEQA when folks don’t want more people living near the homes that someone else built for them…sheesh. Welcome to California and the State’s recognition that local government listened to y’all for so long that a housing shortage unfolded…what’s the real reason? Low income housing? Afraid to say it? It ain’t disturbin the environment cuz I see undeveloped but graded lots there. Hopefully, this will be resolved, and the NIMBY’s will have some new neighbors….like their neighbors had when they moved into town.
Yep, it is infringement on the locals once again. Thus being said you can only put so many sardines in a can. We all live here for our open spaces. Ask anyone. This is the central coast snd there is only one. The planners are definitely not looking out for the people that actually live here, vote them out. The little town feel is being replaced by corporate “high bidders”. Somebody is benefitting and it is NOT THE PEOPLE THAT LIVE NEAR THIS ! Don’t let this happen here, it’s not fair our representatives are just cashing out without any body hearing the facts. This proposal is a bad idea and forcing people to crowd in like toloosa ranch in San luis. Nowhere to park and pissed off neighbors. THATS WHAT YOU ARE PUSHING !
This was clear and easy to follow. Nicely done.
State law favors more housing where needed. But it does not authorize development that encourages more cars than parking space exists. Nor does it excuse lies by developers such as assurance of parking rights that have not been granted. Adding 92 units to a small area creates great risk of accidents and misuse of the property of other owners, including the medical building and gym which are adjacent.