ENCINITAS — A divided Encinitas City Council approved a settlement with the Building Industry Association’s San Diego chapter that ends the BIA’s lawsuit against the city for its 2014 approval of policies aimed at closing several loopholes that have been popular among developers of so-called “density bonus” projects.
The Council emerged from closed session Wednesday night and Mayor Kristin Gaspar announced the council voted 3-2 to approve the settlement, which calls for the city to rescind its July 2014 action and pay $200,000 in attorneys fees to the BIA in exchange for the city keeping one of the loopholes closed, among other considerations.
Gaspar and Mark Muir voted against the settlement.
The terms of the settlement include the following highlights:
• The city will be able to continue to Rounding down the number of units proposed on a site of the number of allowable units is a fraction, as opposed to rounding up, which developers prefer.
• The city will rescind the July 14 vote, instead adopting an ordinance that complies with state law. However, the city appears to have been able to keep language in place that will require builders to provide documentation for financial incentives and only allow for waiver of development standards if the standards physically preclude the development.
• The city can not retroactively change the approval for six of the density bonus projects that were already in the pipeline before July 14.
• The lawsuit compels the city to place a housing element on the ballot in 2016.
• The city agrees to pay $200,000 in legal fees in exchange for the BIA dropping its claim against the city for not having an updated housing element.
Gaspar said the settlement was not in the residents’ best interest.
“The agreed upon settlement does not provide much needed closure for our community on several key issues,” Gaspar said in an email Wednesday. “In addition to the $120,000 the city has already invested in defense of the lawsuit without resolve, this settlement leaves us absent protection against future litigation, and we have now handed the BIA $200,000 to potentially aide in fighting the City on density bonus.”
Lisa Shaffer explained her position Thursday morning in her newsletter to supporters:
“The key points for me are that we are now even more strongly compelled to do what should have been done some time ago, which is to update our density bonus ordinance and our Housing Element, part of our General Plan that has not been updated since 1999, and we continue to round down when calculating the “base density” for new developments requesting a density bonus,” Shaffer said. “With legal bills for our special counsel and the BIA fees totaling over $300,000, and the prospect of substantially higher costs if we continued to court, I thought it made sense to staunch the bleeding, get our ordinances and Housing Element updated, and move forward.”
“To me it was irresponsible to continue to spend taxpayer funds to defend what is clearly not defensible, i.e., not having a legally mandated housing element and a valid density bonus ordinance,” Shaffer concluded.
Deputy Mayor Catherine Blakespear, who also approved the settlement, echoed Shaffer’s sentiments.
“Settling this lawsuit is the responsible decision because we had no chance of winning,” Blakespear said. “Through changes we’re making the city is achieving many of the same goals but doing it in a legally defensible way.
“The biggest issue for the community is rounding on base density and we are continuing to round down…Settling gives us control over our ordinances and the projects we approve, instead of having an out of town judge making decisions about Encinitas,” Blakespear said.
The City Council voted 4-1 on April 22 to begin settlement discussions with the BIA, with Mark Muir voting against the negotiations.
The BIA filed the lawsuit in October, arguing that the council’s actions, which they say were politically pressured, either violate state law or make it infeasible for developers to build the projects.