By David M. Greenwald
Executive Editor
Davis, CA – The Palomino project is going forward, the city of Davis announced on Wednesday as part of a settlement agreement with local developer, David Taormino (Taormino), regarding the Palomino Place housing proposal.
The 25-acre project, located within the city limits of Davis, aims to construct 163 residential units on the east side of the Wildhorse subdivision in North Davis that are a mix of housing types and sizes, with a focus on lower income affordable housing, first-time homebuyers and “missing middle” housing.
“After carefully reviewing state law and conferring with the City Attorney, it became clear that this project qualified as a Builder’s Remedy project,” said Davis Mayor Josh Chapman. “This settlement will save on litigation costs for the City, provide more affordable housing units for the community and resume the long awaited process for 
the Palomino Place project.”
Key elements of the settlement agreement include:
- The City’s acknowledgement that Builder’s Remedy applies to the project.
- The City’s agreement to process the Palomino Place project for City Council consideration in late 2024 without legislative entitlements (General Plan amendment and zone change).
- Taormino’s agreement to increase the number of low-income affordable units up to 45 units, which would result in 25% of the units in the project being affordable to low- or very low-income households.
- Preparation of a robust environmental impact report to evaluate the environmental impacts of the project under CEQA.
- Taormino’s obligation to explore additional environmental sustainability features in the project.
- The City Council being given the ability to include reasonable conditions of approval to address community concerns.
- Taormino’s agreement to proceed with this process at his sole risk.
New Unit Mix
Taormino first submitted a preliminary application for the proposed project to the City in October 2021.
On April 14, 2023, Taormino invoked the “Builder’s Remedy” when the city had been unable to get its Housing Element approved.
Under the Builder’s Remedy, a city that does not have a legally compliant Housing Element is required to approve a development project application that makes at least 20% of its housing units available for lower income households, unless the city can make one of the specific findings provided in state law for disapproval.
According to the city, the proposed project site is currently zoned as “horse ranch” and is designated “Agriculture” under the City’s General Plan.
According to the city, “Palomino Place proposes a residential subdivision which typically would not be allowed without a rezone, general plan amendment and Measure D vote.”
However, “Along with other housing developers asserting Builder’s Remedy throughout the state, Taormino takes the position that the City of Davis must process the project without a zone change or General Plan Amendment given that inconsistency with zoning or the General Plan is not a legally permissible basis for denial of a project under Builder’s Remedy.”
Since the lawsuit was filed, “the City and Taormino have been actively engaged in good faith to reach a settlement on the project,” the city said. “Both the City and Taormino are pleased to announce that the settlement agreement, which has been signed by both parties, will result in a project that provides greater benefit to the Davis community than the original application.”
“I am pleased with the Council’s decision to settle the litigation,” said developer Dave Taormino. “The lawsuit was intended to advance the project, which is exactly what this settlement does. I would much rather be building housing for young families and the missing middle than wasting time and taxpayer money debating state housing laws. The decision to put aside our differences and focus on building much needed housing is a win for this entire community.”
I have confirmed that under this agreement there would be no required Measure J vote.