AnonymousBy Joseph Liebman, of the Law Offices of Joseph Liebman, Santa Barbara
The City of Santa Barbara refused to allow any construction on an ocean-front lot in a residential neighborhood located in the coastal zone. The owner, Thomas Felkay, sued the City and won his case in the Santa Barbara Superior Court. The City appealed and is now out of options after losing again on March 18, 2021 (see attached decision).
In 2006, Felkay applied for a Coastal Development Permit (“CDP”) to build a single-family house on his property. The City denied the permit, claiming that almost the entire lot was located on a “coastal bluff face,” and that the City’s Local Coastal Plan (“LCP”) Policy 8.2 prohibited all development of any kind on the coastal bluff face.
Felkay sued the City in 2017 claiming that the City’s refusal to approve his CDP rendered his property worthless. Attorney Joseph Liebman represented Felkay. In October 2019, the trial judge agreed, ruling in Felkay’s favor. The court concluded that the City had taken all economic use of Felkay’s property.
The trial Court offered the City the option to simply issue Felkay’s permit. The City declined, telling the Court that it had “elected to treat the matter as a permanent taking of the value of the property and not rescind its Permit denial….”
The City got what it wished for. In a second trial, a jury agreed that the City had taken Felkay’s property. Felkay was awarded $2.4 million for the total permanent taking after the City admitted at trial that LCP Policy 8.2 was the only regulation, state or local, the proposed new home could not meet. Attorney and expert fees in excess of $1 million were later added to the judgment.
The City appealed and has lost again: this time by unanimous decision of the three-justice court of appeal. The City is now liable for:
1) the value of Felkay’s property,
2) all costs and attorney fees Felkay incurred in his original court case, and defending against the City’s failed appeal; and,
3) interest on the value of the property and legal fees that has accrued during the past year that the City has pursued the appeal of its original loss.
Upon its first loss, the City could simply have issued a permit and allowed Felkay to build his home. There would have been no additional costs to the City, and it would have ultimately received substantial property taxes from the value of the new home. Instead, the City chose to pursue further costly legal action despite it being evident there was virtually no chance of success.
The City now has a liability of more than $3.6 million dollars. This will be paid out of its General Fund, at a time when revenues are down significantly. The City can ill afford to spend taxpayer’s money paying out damages to property owners. And this was completely and easily avoidable.
This loss is a direct result of the poor advice given to City Council by City Attorney Ariel Calonne and City Manager, Paul Casey.
Bad behavior has consequences. This is the end of the road and the City will pay for its poor decisions.
$6 grand in legal fees??? OUCH. I wonder what the City had to pay defending itself in this case. I’m gonna go out on a limb here and speculate it was probably between $200k and $300k. But $6k! That’s gotta hurt. That’s like a nice TV or a set of really cool patio furniture right there.
12:21: “leaders’ poor decisions” True, in handsight. It was the City Council who made the decision, presumably on staff (Calonne’s) recommendation.
Too bad that Dominguez, no longer on the council, probably won’t weigh in on why the Council made the decision in 2017 to not try to settle rather than go to court —- or maybe they did and didn’t offer enough.
Your measure C tax dollars at work. Instead of fixing streets, they’re paying for losing lawsuits.
I can’t tell if you are being sarcastic or not. But no, the police station is paid for out of Measure C revenues. The City will be writing Felkay a check out of its General Fund. The General Fund is what pays for things like employee salaries. So for example, if the City’s priorities were different, it might have decided to use the hundreds of thousands of dollars spent on its own legal fees for the appeal to pay for other things that might have benefited the community in some way…like hiring more police officers. It’s cool to see your tax dollars at work!
Perhaps you only noticing now that the none stop Pandemic coverage is subsiding? For anyone who cares to pay attention, SB is unbelievable corrupt and the local press paper it all over. Notice that no reporter wrote the story. It was the very lawyer who won the case. Bravo to this lawyer in fighting for this citizen.
IMO-Geez how many times does the City Attorney Ariel Calonne & the city manager Paul Casey’s name have to come up regarding their bad behavior before they get fired? Are these life time jobs even though they are costing the city & tax payers even more money when they could have settled this in the beginning? Citizens have been complaining about Paul Casey and his exorbitant salary for years now. Time for him & his other too highly paid city employee’s to go.
I know there are many more stories like this. This just happens to be with a property owner who had the energy/time/money to go into a 4 year battle with the city. I know of others who reluctantly accept and try to move on with their lives. I applaud Felkay for standing up to these bullies.
All I can say to the city is: HA HA
This started in 2006! I don’t think paying interest and covering the property owner’s litigation expenses is enough. Punitive damages should be imposed on the city to discourage this abuse of power from ever occurring again. Why wasn’t LCP 8.2 invalidated? And why isn’t the city ordered to compensate all property owners whose land has been effectively taken by this policy? I can’t believe the plaintiff in this case is the only one out there, and I wonder how much liability the city has if it chooses to maintain this policy. My takeaway from all this is do not buy land within the limits of Santa Barbara city unless you are prepared for a 15 year legal battle.
Thanks for fighting the good fight Mr. Felkay! That must have been a nightmare…congrats on your win (even though SB’s stupidity and arrogance here costs us all).
I would have wrote the articles last sentence differently. “This is the end of the road and once again the Cities residents will pay for its leaders poor decisions”
Does any one of the City Staff in the Community Development Department “get the permission of the City Council” before sending applicants a letter that talks about what the City Council’s established policy is with regard to any given subject? Of course not. That’s how Government works. The Coastal Commission, and City Council, don’t have to “sign off” on every piece of correspondence that leaves the agency. When a staff member, especially a top level staff person like the Executive Director of the Coastal Commission, sends a letter expressing the policy position of the Coastal Commission, that’s not a scandal, that’s doing his job.
This “outrageous scandal” and the Wagner thing are in two seperate universes.
Since you seem to have a curious mind, I’m curious if you are curious why the City Attorney’s office would issue an “announcement” …..yesterday…..about a case they won over 3 months ago? The very same day there was an announcement about how the City just got slaughtered and lost millions of dollars, including probably close to a million in additional legal fees and interest costs as a result of their Don Quixote appeal. I guess we’ll never solve that mystery…….