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St. Helena considers sharing legal costs of besieged housing developers

  • Updated
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City of St. Helena

The St. Helena City Council is investigating an ordinance that would take some of the financial burden off would-be housing developers who face expensive lawsuits over the approval of their projects.

On Tuesday the council directed the Planning Commission to study an ordinance that would still require applicants to bear the city’s legal costs during the first phase of a lawsuit, but under certain circumstances would call for the city to take over the costs of an appeal.

In its initial rough draft form, the ordinance would apply only to projects of 20 units or fewer that satisfy the city’s inclusionary affordable housing ordinance.

The offer would apply to Joe McGrath’s 8-unit apartment complex on McCorkle Avenue, where a lawsuit brought by neighbors was dismissed in Napa Superior Court but is now under appeal. McGrath said he has spent $270,000 in legal fees so far, which has threatened the project’s financial viability.

The proposed ordinance would call for the city to pay legal fees only after a project has been upheld in a lower court and then appealed to a higher court.

The ordinance would provide an incentive for affordable housing developers, who have historically had a hard time building in St. Helena due to high land values, construction costs, and the threat of lawsuits from neighbors. Councilmembers said the ordinance should be just one component of a comprehensive housing policy that would support affordable housing.

They asked the Planning Commission to explore potential unintended consequences, such as ensuring that the city’s contribution won’t result in a housing development becoming a “public works” project that’s subject to prevailing wage requirements.

The ordinance will probably need some fine-turning. For example, Councilmember Paul Dohring noted that, as currently drafted, it wouldn’t apply to 100 percent affordable housing developments of more than 20 units – such as Stonebridge and Hunt’s Grove apartments.

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