This time you cannot blame the forces of “slow growth” or the neighbors. In fact, at their January meeting, the neighbors made their peace with the proposed hotel – gaining a key concession in the rear height and a neighborhood improvement fund.
Instead, the extended stay Hyatt House hotel, with its 118 rooms, which the council unanimously approved, is put on hold due to a competitor.
The “group” filing the suit is “Davis Smart Growth Alliance,” but it is pretty clear, once again the name is an “astroturf” organization. The only named entity is Roshan Patel, owner of the Holiday Inn Express and Suites – a nearby competitor to the approved hotel. Mr. Patel had sent a letter in January threatening legal actions.
He wrote at the time, “The City is adding an unsustainable amount of hotel rooms in inappropriate locations without any new demand generators. This will ultimately lead to devastating effects to existing hotels including but not limited to closures, abandoned buildings, homeless encampments, deferred maintenance, blight, and other environmental issues.
“I’d like to remind the Council that adding hotels without any new demand generators is not going to solve any of the [City’s] financial problems and it is not a community benefit for anyone. Please oppose the Hyatt House Hotel based on Davis’s smart growth policies,” he wrote.
Mr. Patel warned, “If the City continues to ignore my concerns, I suggest the City prepares to govern itself accordingly in the Court of law based on an invalid environmental impact report and breaking zoning and land use laws.”
He argued, “The EIR inadequately addresses potential impacts of urban decay of existing hotels in the community. Additionally, based on section 65860 of the California Planning, Zoning, and Development Laws – I have reason to believe the project is in violation of planning and zoning law as the Hyatt House Davis project is not consistent with the city’s General Plan Land Use policies and the South Davis Specific Plan policies.”
Mr. Patel is represented by Patrick Soluri, from the Sacramento-based Soluri Meserve law corporation. Mr. Soluri believes that the council has basically abandoned sound land-use policies in order to chase revenue.
Here we go again. The Embassy Suites hotel was delayed by a lawsuit that led to a reduction in the size of the hotel and the virtual abandonment of the all-important conference center. The 120-room Marriott Residence Inn at 4647 Fermi Place is also caught in a lawsuit, this one regarding the habitat of burrowing owls.
But this current one seems less about land use or the environment and more about competition.
Last year, the city contracted contracted with HVS Consulting & Valuation in order to get an independent assessment of the hotel market demand. HVS concluded that “the near-term development of a conference hotel facility with the addition of an extended stay hotel to be built shortly thereafter would be most beneficial to visitors, the City of Davis, other hotels in the market, and the overall community.”
However, HVS concluded “that the addition of another hotel, specifically another extended-stay facility, would not benefit the market for another four to five years after the initial extended-stay hotel has opened.”
The more optimistic study was the PKF Consulting study, which projected that four new hotels could ultimately generate between $1.5 and $2 million in new revenue for the city just by themselves.
They found that 18,000 square feet of meeting space could include between 500 and 1000 attendees, depending on the type of function. “A hotel with approximately 18,000 square feet of meeting space would typically feature between 350 and 400 guestrooms,” they note. But the Embassy Suites will have just 132 rooms, which means that Davis will need other hotels to complement the Embassy Suites in order “to capture either overflow group demand that is booked at the Embassy Suites (but can’t be accommodated).”
PKF argued that at least three new sites can be “readily absorbed by the market,” and they found “occupancy is projected to increase to 67.0 percent in 2019 and further increase to approximately 70.0 percent in 2020 and 2021. It is at this level we project the Davis hotel market to stabilize. While this stabilized occupancy level is above the annual average occupancy level achieved by the Davis hotel market since 2007, it is in line with the year-to-date performance and is reflective of the growth occurring in Davis.”
But the conference center is no longer planned at this time to accommodate 18,000 square feet of meeting space, and, in January 2016, when the Vanguard met with existing hotel owners, their analysis painted skepticism about the claims of the PKF study.
While the city is looking to new revenue sources to close huge holes in its budget, existing hotel owners are concerned that new facilities will lead to existing hotels closing and the deterioration of certain areas of Davis.
That fear seems to be at least somewhat realistic, but it remains to be seen whether it is a legally actionable one. Moreover, the council had all of this information at their disposal when they approved the project six weeks ago.
For their part, the city doesn’t believe that the lawsuit has merit. But what it does is, once again, delay timelines for construction and opening the new hotel, delay the receipt of tax revenue for the city, and once again increase the cost of business.
It’s one thing if this is done on behalf of the citizens of Davis. But, in this case, the neighbors have no involvement, they made their agreement with the developers and have made their peace.
Planning by litigation is becoming a fact of life in Davis – and not a good one. The people of Davis elect the city council to represent the interests of the community. We have a long process filled with opportunities for citizen engagement.
It is unfortunate that a monied interest can come in at the 13th hour and derail the process in such a self-serving way.
—David M. Greenwald reporting
That’s what I was wondering. Can one sue basically because of competition? It sounds frivolous to me.
It’s time the city turns the tables and takes whatever means it can use to stop actions like this.
Countersue? Somehow make the litigant have to pay a price if they lose a lawsuit.
An ancillary issue to the one Keith has described is how the litigant can prove that “The City is adding an unsustainable amount of hotel rooms in inappropriate locations without any new demand generators.”
How would anyone prove (or disprove) the unsustainability of the additional hotel rooms the Council has approved?
Is the presence or absence of “new demand generators” a reasonable criteria? The litigant appears to be ignoring the level that existing demand generators are contributing to market demand.
Matt, exactly.
Even if the demand weren’t already in place it still could be a case of ‘build it, they will come’.
“Somehow make the litigant have to pay a price if they lose a lawsuit.”
Although I have no intrinsic interest in this issue myself, I see a two edged sword here. Because one sees a particular lawsuit as “frivolous” or “self serving”, do we really want to change our processes based on that perception ? There is a huge danger here if the next time it is you that has what you consider a completely valid grievance, but the city uses the threat of retaliatory damages against you if you lose. Would this not have a chilling effect on the ability to use the courts for completely legitimate redress of grievance ?
It would force litigants to have a valid case before they pursued what are often times frivolous lawsuits. How do you feel about a party being frivolously sued? They will be forced to pay to defend themselves and lose business/revenue, shouldn’t they have recourse to make themselves whole again?
What “grievance”? Were ‘rights’ violated? The ‘right to a corner of the market’?
In my opinion, a hotelier (no any business, for that matter) has no ‘vested right’ in a given level of business/profit.
That’s my thinking. In my view they’ll cloak the lawsuit in CEQA, inadequacy of the MND or something.
CEQA is an essential tool for decision making… but using a hammer to drive a screw is not a good idea…
Keith
My problem is who gets to be the final arbiter of that ever so subjective word “frivolous”. I have been on several occasions named in law suits that were ultimately determined to be unwarranted since the evidence offered was not found to support the claim. On neither occasion did I wish any retribution on the claimant who I felt in each case had basically been convinced by a lawyer that they had a case, when anyone familiar with the situations and acting in the patient’s best interest would have known they did not. I do not blame people who have experienced, or in this case anticipate, a poor outcome from seeking redress. I do blame lawyers for what I consider unethical behavior.
If your suggestion was that there could be some form of definitive criteria agreed upon for what constitutes “frivolous” that was clear and unequivocal, then I would agree with your point. But I do not hold the standard of “I can’t tell you what it is but I know it when I see it” to be adequate.
Ultimately a judge is the arbiter.
“Ultimately a judge is the arbiter.”
Well that is certainly how we do it now. But if that is the case, then the lawsuit would seem to me to be the only way to get to the final judgement of what is “frivolous” and what is not, which does not support anyone’s argument about making “frivolous” lawsuits since the decision is made at the end of the process, rather than early on. If there was more clarity about what is and what is not “frivolous” perhaps fewer people would “roll the dice” hoping for a favorable settlement, thus saving everyone concerned time and money.
Off the top of my head I think England and France make the loser of a civil lawsuit pay the ‘reasonable’ court costs of both parties. Sounds ‘reasonable’ to me.
What is your alternative approach, Tia?
To add to David, ‘and someone has to pay to defend the suit, or be prepared to pay a form of extortion (aka “settlement”). In the meantime the blocked applicant also has to deal with real time/money costs of delay (inc. interest rate changes for financing, CCI, etc.) as the litigation moves forward on its often gastropod pace.’
This particular one may be deemed a “late hit” (in the view of someone in a black robe), if the issue was not brought up during the review, or if it was brought up, and addressed in the public record, during the project review by the City.
In football, a late hit is penalized… see no reason the same shouldn’t be done for this type of litigation… civil suits often have provisions for the plaintiff to pay all the defendant’s costs of litigation, if plaintiff does not prevail…
Honest (general) questions, regarding this statement. For the sake of discussion, I’ll assume that you’re talking about the EIR.
If an issue was brought up, would the “conclusion” be vulnerable in a lawsuit? Or, if the conclusion was that there would be an unavoidable impact, and the city certified the EIR and approved a development regardless, does that put the city at risk in some manner?
Also, what about potential issues that weren’t brought up during an EIR (or the review process), but are brought up later (via a lawsuit)? (Is it necessarily too late to do so, at that point?)
I think I’m diving into legal questions.
On a separate note, I agree with Tia’s response regarding “retaliation”, although I understand the frustrations expressed by some.
So Ron, if your neighbor sued you for something frivolous in civil court because he was able to find a lawyer to take his case and it ended up costing you lots of money and time you would just pass it all off as that’s your neighbor’s right?
An honest question, not meant to be confrontational.
Keith: I kind of wish that I hadn’t added the statement regarding “retaliation”. 🙂 (I thought about that further, before I even saw your response.) I guess that in the case of homeowners, for example, insurance companies would likely be involved. (But, still probably personally costly, in both money and time. Not likely that I’d be very happy in such a situation.)
But, I’m also wondering if the groups that are created to function as the plantiff in such lawsuits protect the underlying individuals from risk (much as corporations do, for business owners). Again, a legal question.
Creating a fake group to hide behind won’t shield an individual from the consequences. It’s not like they created a corporate entity here.
What shields people from consequences is that the Hyatt House wants to start construction this summer, if they take this matter to court, it could take years to resolve. That gives the plaintiffs leverage over the defendants.
Thanks, David.
Are you sure, though? If so, what is the purpose of a “fake group”?
Ron… see David’s answer above. Q.E.D.
Howard:
David’s response didn’t address the question. Why not launch a lawsuit under one’s own name? As noted in the article above, creating an organization apparently does nothing to ensure privacy. Is there some other reason to create such an organization?
(I don’t know what “Q.E.D.” refers to.)
quod erat demonstrandum
In English “that which was to be demonstrated”
It is the last three letters of the San Francisco PBS/NPR affiliate KQED.
To amplify on Matt… WQED was the first community supported TV station in the US… based in Pittsburgh PA… it has been “on air” ~ 6 months longer than me.
As the day’s trivia contribution, the old rule was TV/radio stations east of the Mississippi had call letters starting with W… those west of, with a K…
I’d suggest you don’t throw stones…..
Ron: It’s a political game
David:
O.K. – I’ll take your word for it, even though I don’t see how. (As noted, the name of the organization apparently provides no protection, regarding privacy.) Not sure what purpose it serves, if it doesn’t provide some legal protection.
Overall, I’m not as willing to label this action as a game, especially considering the earlier response from Mr. Patel to Matt, below. The response seems sincere, even if one doesn’t agree with it.
I’d personally prefer the Hyatt proposal to go forward at this point (for what that’s worth).
Regarding some other suggestions that the “loser” pays for all legal costs, I can see the appeal. However, I suppose that it could be a double-edged sword. (I assume that such a system is not automatically in place.)
(On an unrelated note, I think that Keith’s response above was probably intended for a different article/response.)
Think about it – do you want your personal name attached to the court case or would you rather some generic fake group name? It’s a common tactic, but there is no legal protection ultimately.
Keith
I completely understand your example from the way that you have chosen to pose it. But now let’s flip that coin. Let’s suppose that your neighbor has done something that you consider a serious transgression which has harmed you, but which both your neighbor and the judge consider “frivolous”. You lose the case which both you and your lawyer thought had real merit. Now are you happy to have financial penalties attached that you have to pay in addition to having to live with the consequences of your neighbors action ? Again, not snark. Just trying to consider this from both points of view.
Ok, looking at your “flipped coin” example… this is a true story… factual, and I lived it…
Neighbor started to put in a mow strip between our properties… no notification… as the worker was framing it, I noticed a significant encroachment onto my property… a “grievance”, if you will… I talked to the worker and showed him the existing evidence of property line… in broken English, he said I had to talk to his ‘client’… called her, and she said I was wrong and she was proceeding… I told her my expertise as an engineer well grounded in surveying… she yelled at me and hung up (there are reasons why folk use the B-word).
Not fully on topic, but the point is, if there is a problem, it needs to be addressed at the lowest possible level. And early on… had I waited for concrete to be poured, different scenario entirely…
That night, I relocated the forms so as to coincide with the real PL… the worker didn’t recognize that (or figured that he was “covered”), and all was good. Not good for lawyers, but saved me a bunch of money by not going to court… and issue was resolved.
Complicated question Ron…
First, though, the project in question did not have an EIR, but a CEQA process did occur… and a review process to boot.
For certified EIR’s, there is a statute of limitations where it can be challenged… not sure, but kinda’ think it’s 90 days. There are statutes of limitations on many things. Except murder and a few other crimes.
Without knowing the details, would be willing to wager that this has been raised near, but within the SOL (accidental humor)… common tactic by those who primarily want to obstruct. [or extort a “settlement”]
But will need to leave to others how timely this is…
In general, if someone has a ‘bone to pick’, they need to do so before the applicant pulls permits and begins substantial construction, relying on approvals they have obtained. That is the “outside border” of SOL.
Hope that helps…
Thanks, Howard.
In general, it does seem that legal challenges are often complicated and unpredictable. Even laws themselves are not always straightforward (hence, the reliance upon and citations of past judgements, it seems.)
Ron, as Howard has said several times, an EIR is a disclosure document of the environmental impacts. If an environmental issue was not disclosed in the CEQA process (whether EIR or Negative Declaration), then the CEQA report would be either incomplete or inadequate or both. If the issue was actually disclosed, but not adequately assessed then the CEQA report would be either inadequate or inaccurate or both.
It appears that the argument being put forward by the Davis Smart Growth Alliance is an economic one, not an environmental one. It is not clear, from what has thus far been provided, what threat to the environment is being alleged.
Bottom-line, the lawsuit will have to show how “The EIR inadequately addresses potential impacts of urban decay of existing hotels in the community” in order to bring the provisions of CEQA into play.
It is hard to see an impact to the environment connection in the argument that “based on section 65860 of the California Planning, Zoning, and Development Laws – I have reason to believe the project is in violation of planning and zoning law as the Hyatt House Davis project is not consistent with the city’s General Plan Land Use policies and the South Davis Specific Plan policies.”
Thanks, Matt.
Is there a risk to the city if an EIR is improperly certified, and a proposed development is approved based upon that certification? (Same basic question regarding a CEQA report. For example, if a development is approved even though a CEQA report is inadequate or inaccurate?) In such a case, I assume that a “negative declaration” is issued.
Also, what about issues that are addressed (but cannot be mitigated), but the city nevertheless approves a given proposal? (In other words, does that put a city at risk?)
My overall question is, what are the risks that cities face, when approving a development that has gone through a CEQA or EIR process? (That’s the general question that I’m really trying to ask.)
Regarding the hotel in particular, is “urban decay” outside of the scope of CEQA and the negative declaration? Also, what about the other issue brought up, regarding city plans/policies? (I’m honestly not taking sides, just wondering – based upon your statement.)
You mention an EIR in your response, but Howard is stating that one wasn’t performed. (I assume that the “negative declaration” can be used interchangeably, regarding your reference.)
Matt:
My apologies – I see that you’ve already addressed some of my questions in your earlier response.
But, my main question remains – in general, what are the risks that cities face, when approving a development that has gone through a CEQA or EIR process?
Ron, to the best of my knowledge there is no risk to the City, other than the legal cost of responding to the lawsuit as “defendant.” A CEQA lawsuit effectively says “we allege that there is a shortcoming in the disclosure process, and the jurisdiction (in this case the City) must either (A) go back and remedy the shortcoming, or (B) abandon the project or (C) show cause to the court why the allegation is without legal merit.”
I defer to an experienced mind like Howard’s to answer the logical follow-up question regarding whether the City or the project applicant are liable for the additional costs if the City chooses either (A) or (C).
With respect to your “urban decay” question, the plaintiff needs to define what the specific urban decay is likely to be, what the proximal causes of that urban decay are, and whether those proximal causes exist currently or only exist in the case of a condition of “market unsustainability.”
The take-away I got from my face-to-face meeting with Roshan Patel was that there is a considerable similarity between what he is describing as urban decay in hotels and the urban decay that Davis is experiencing in the condition of its roads and bike paths. In both cases the urban is avoidable if timely capital infrastructure maintenance is performed. What Roshan Patel appears to be most concerned about is (A) the cost of keeping his hotel competitive with newer hotels, and (B) competing with more upmarket brand names.
The residential housing market sees a variation of (A) and (B) play out on an ongoing basis. Home buyers have a bias toward homes that have the newest amenities, and the sellers of older homes are faced with the possibility (and cost) of replacing amenities (kitchen and bathroom most notably) long before they have reached the end of their useful life because their visual style/design is not current. The alternative is to reduce the sale price (value) of the home.
It is understandable that Mr. Patel doesn’t want to see the value of his hotel decrease. Nor does he want to see the competitiveness of his hotel decrease. He has two alternatives for achieving those two ends. One alternative is to spend the necessary money to keep his hotel current with the up-to-date expectations of the guests. The other alternative is to deny those guests access to newer hotels that organically include amenity and design features that match those up-to-date guest expectations.
Little if no risk, unless there is substantive evidence of malfeasance… even then more likely the applicant is at risk of proceeding further… for the agency, only real risk is a “do-over” (as I’ve opined before) of the CEQA process, or portions thereof… would be nearly impossible to get “damages” awarded. Not likely that CC members would be imprisoned (maybe 0.00001 chance), either.
It’s called an ‘administrative remedy’… there may be examples for an agency needing to pay (other than defending the litigation) for ‘damages’ or fines… not aware of any to date, and I tend to follow that stuff.
If you are trying to “mine” info, to question risks of any CEQA process, to impugn it, the shaft is empty… the well is dry… there is no there, there.
Some would be inclined to say that if the risk is 0.0004% that you should say “no”… yet, your chances of getting hit by lightning, during your entire lifetime, is ~ 0.008 %… I tend towards a 0.5% risk as worth thinking about if mortality is involved, 1% as to property… and that’s even to think about it. To act on something, my view is somewhere between 45% and 0.5% is acceptable risk for pretty much anything.
In this particular matter, am thinking a 45% risk of a bad outcome, given the facts, is reasonable… suspect the actual risk here, in this matter, is ~2%.
That said, I am not an attorney, nor an actuary…
Thanks, Matt and Howard.
Thought I’d add – at this point, my “personal” preference is that the Hyatt proposal go forward. Seems like “enough” has been done, to satisfy most concerns (based upon what I know, at least).
Still, I don’t “begrudge” the plaintiff, in this case. I recall that he put forward some reasonably compelling concerns on the Vanguard, previously (assuming that I’m recalling the correct article/person). It is somewhat difficult for me to believe that the plaintiff believes there is “no merit” to his complaint. (I would assume that due to litigation, there won’t be any further public statements from the plaintiff.)
Matt – did you meet with Mr. Patel for the purpose of trying to understand and (somehow) help address his concerns? (Actually, what were you trying to accomplish, and was there any significant point of disagreement between you and him, that you recall?)
Clarification: I guess that the plaintiff is an organization, rather than a person. I still don’t understand the legal purpose of creating an organization. (The article above shows that doing so does not ensure privacy.)
Ron, my meeting with Roshan in December was the same kind of ecumenical interactive dialogue on ideas and concepts that try to engage in here in the Vanguard. edited
In this case Mr. Patel had expressed concerns about the validity of public record Transient Occupancy Tax numbers, especially as a measure of market demand for hotel rooms. That dialogue began when I posted the following:
.
To which Mr Patel responded:
.
In addition to providing a detailed response to his points on the Vanguard (see LINK for response), I reached out to him in the following e-mail correspondence to dialogue face-to-face.
[moderator] edited: email address removed, and more.
Was Mr. Patel aware that you were likely to post his email comments out on a public blog?
Don, if you go back and review the December dialogue on this topic you will find the following:
… after which Mr. Patel delved into the specific detail and opinion he shared with me in person when we met. Nothing he and I discussed was confidential.
Further, Mr. Patel’s e-mail address is publicly available on his business card, which is openly, transparently and freely distributed by his staff at Holiday Inn Express.
[moderator] When you post an email address on a public blog, you subject the owner of that email address to spam. I suggest you not do so. We don’t have a policy on the subject, but I remove email addresses whenever I see them unless the owner has obviously given explicit or implicit permission (i.e., posted it intentionally as you have done here).
Ron said . . . “You mention an EIR in your response, but Howard is stating that one wasn’t performed. (I assume that the “negative declaration” can be used interchangeably, regarding your reference.)”
Howard is correct. In this CEQA process no EIR was created.
My response was focused on your question as posed, “Honest (general) questions, regarding this statement. For the sake of discussion, I’ll assume that you’re talking about the EIR.”
Does his filing of this silliness put a stop to the construction? Has a judge made a ruling or is there an injunction in place?
As for the city being harshed… they play this game all the time, picking and choosing what businesses can go where… picking winners and losers.. look at what they did with Ikeda’s proposal. Stopped it because they didnt want to hurt flipping In and Out. They opened this door…