In hopes of encouraging workforce and affordable housing, the St. Helena City Council wants to help housing developers pay for legal challenges brought against their projects.
Applicants are currently required to pay for the city’s legal defense if their project is challenged in court. Under a draft ordinance drawn up by city staff and reviewed by the council on Tuesday, the council could consider reimbursing a developer for the city's share of the legal fees incurred during a lawsuit’s appellate phase.
The reimbursement could apply to projects that satisfy the city’s inclusionary housing ordinance and prevail at both the trial court and appellate court.
The council would consider each reimbursement on a case-by-case basis. Developers would still be responsible for their own fees, and for the city's fees incurred before the lawsuit reaches the appellate phase.
The proposed ordinance would offer relief for developers like Joe McGrath, who in March said he’d spent nearly $400,000 fighting a legal challenge filed by neighbors against his 8-unit apartment project on McCorkle Avenue.
The lawsuit was resolved in favor of McGrath and the city, but McGrath said his legal costs – plus another $100,000 he spent fighting claims about contamination on the property – will drive up the cost of rent.
McGrath said developers are leery of building much-needed housing in St. Helena, which "has become an incredibly litigious and nasty place to do anything."
In March 2018 McGrath asked the city to cover its own legal fees for the appellate phase, but Vickie Bradshaw – who represented the plaintiffs in the lawsuit – said the use of public money would trigger California’s prevailing wage law. The city asked for clarification from the California Department of Industrial Relations, which still hasn’t made a determination.
McGrath’s project was market-rate, but he also agreed to convert market-rate units on Grayson Avenue to affordable units.
If applied retroactively to McGrath's case, the city could pay McGrath $86,700 to cover the city's legal fees during the appeal.
Glenn Goelz, who lives near the McGrath project, was critical of the ordinance, which he said looks after developers' best interests instead of residents'.