LA developer demands $500,000 from SLO residents 

A Los Angeles developer pursuing a 33-unit housing project in San Luis Obispo is asking SLO County Superior Court to slap a $500,000 charge onto a group of local residents challenging the project in a lawsuit, alleging undue economic hardship caused by delays.

An attorney representing Loren Riehl of LR Development Group filed the motion in court on July 24, nearly three months after the SLO neighborhood group, "Friends of 71 Palomar," sued the City Council after its April 4 approval of the project.

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• FILE PHOTO
• DEVELOPER V. RESIDENTS A Los Angeles developer is asking for a half-million-dollars from SLO residents suing the city for its approval of a 33-unit housing project.

Led by SLO residents Lydia Mourenza and Teresa Matthews, Friends of 71 Palomar is alleging that the city violated the California Environmental Quality Act by approving Riehl's project without an environmental impact report (EIR). The project would remove 55 of 59 trees on the property and relocate and renovate a historic house.

"We believe a full EIR needs to be done," Mourenza told New Times.

But LR Development Group's recent motion claims the neighbors' true motivation "is to delay the project in the hopes of preventing any development on the subject property ... and to thwart the low-income nature of the project."

Of the 33 proposed units, four are deed-restricted for low-income renters.

"The [state] Legislature has found that local opposition to new residential construction is one of the causes of California's severe housing shortage," the developer's motion states.

Riehl, who doesn't yet own the 1.3-acre property, stated he now faces damages exceeding $500,000 as a result of the neighbors' lawsuit, citing an inability to obtain construction financing, the loss of future monthly rent payments estimated at $68,608, and legal expenses in addition to other costs, according to court documents.

He also suggested the petitioners had the means to cover the costs.

"I have personally reviewed publicly accessible information and estimates concerning outstanding mortgages and home values of Ms. Matthews and Ms. Mourenza's homes," Riehl stated. "The equity in those homes appears to be substantial and more than sufficient to cover [the $500,000]."

Mourenza and Matthews denied having any intention to delay the project because of its affordable housing component. They also denied being opposed to any proposed housing project on the property.

"In the opinion of Friends of 71 Palomar, there is adequate land for a housing project without removing all trees and relocating the historic Sandford house," Mourenza stated in court filings. "An affordable housing development ... would be welcome, and fulfill a significant need in our city."

Most disturbing to Mourenza and Matthews is the potential burden of the cost, which they say has caused considerable anxiety for them and other neighbors involved in the opposition to the project.

"Many participating residents have concerns about their names being individually released for fear of reprisal given the controversy around the project," Mourenza said.

A court hearing to consider the $500,000 undertaking will take place on Aug. 17 and the hearing for the underlying case is scheduled for October. Δ