The City of South Pasadena on Thursday won a preliminary injunction [Click Here] preventing Caltrans from selling its 12-unit residential property at 626 Prospect Avenue to a church in Pasadena.
LA Superior Court Judge Mary H. Strobel issued the temporary injunction pending a trial she set for May 2022, during which the city will make its case for why Caltrans violated the law when it offered the property to Friendship Pasadena Church and should instead be ordered to sell it to South Pasadena’s own housing authority.
After the ruling, Pasadena Friendship attorney Brad Fuller said that at the hearing next May, it will become clearer to Strobel how to protect all the parties’ interests and she will “see the merit” of the church’s proposal. Fuller “can’t figure out why South Pasadena is so against our organization” and adverse to having it develop the property. “We have an excellent history of redeveloping land and getting properties rehabilitated and providing affordable housing for residents.”
The city has “not been interested” in meeting with the church’s negotiating team. Even so, the church is “actively pursuing a way to get a meeting” with city representatives. In the months before next May’s hearing, Fuller is hopeful “we can overcome” some of the city’s apprehension and “find a way to make peace.”
Both the city of South Pasadena and Caltrans declined to comment on the ruling.
The timing may create a problem for Caltrans, which filed multiple declarations arguing “time is of the essence” for the sale, escrow on which is currently set to close next month. The church’s “lender is not expected to commit to loan approval indefinitely. As a matter of fact, we would have to start the entire process over again if this is overly delayed,” wrote Barbara Richardson King, a longtime regional realtor and representative of Pasadena Friendship Community Development Corp, the church’s development arm. “It is exceedingly difficult to find financing for this type of project.”
“The court held that the Caltrans’ decision appeared illegal and issued a preliminary injunction stopping the sale, which amounts to near-final victory,” said Caltrans tenant attorney Chris Sutton, who was not directly involved in the case. He said an appeal is unlikely. “Usually, Caltrans does not appeal losses in trial courts based on its traditional fear of courts of appeal.”
Both the city and Friendship Pasadena Church filed applications in 2019 to purchase the South Pasadena property and redevelop it as affordable housing under the rules of the Roberti Act, which governs Caltrans’ disposal of surplus properties in the former SR 710 extension corridor. Under those rules, “designated public housing-related entities” (HREs) have priority over private HREs.
Pasadena Friendship’s proposal called for purchase by a private, non-profit HRE affiliated with the church. South Pasadena’s proposal was to have its housing authority, a designated public HRE, purchase the property and transfer it to New Prospect Development (NPD) — an LLC whose members are a private group of 626 Prospect tenants and a private non-profit HRE called Heritage Housing Partners.
Caltrans said the private group’s role in the city’s proposed transaction negated the city’s status as a designated public HRE. It therefore considered both proposals on an equal footing and found Pasadena Friendship’s proposal was better.
But in her 18-page tentative ruling, Strobel said that Roberti does not “expressly” prohibit a public HRE from buying a property and transferring it to another entity. Caltrans argued that Roberti’s provision allowing a public HRE to work with another public HRE implicitly prevents it from working with a private HRE. “This interpretation of the plain language is plausible, but not definitive,” Strobel wrote. She said if that had been the legislative intent, “it arguably would have been stated more directly.”
The standard for a preliminary injunction is that the city must show only that it has “a reasonable probability of success” in obtaining a definitive ruling from a court. Strobel said the city met its burden.
During Thursday’s 20-minute hearing, Caltrans attorney Peter Ackeret argued Pasadena Friendship’s proposal “would provide more affordable housing” than the city’s and said there is uncertainty because of pending legislation. Sen. Anthony Portantino’s SB 381 would amend the Roberti Act making it easier for South Pasadena to secure and regulate surplus Caltrans property in town. Ackeret worried the injunction would “preserve the status quo,” possibly prejudicing the parties’ ability to close the deal “if we prevail” at trial.
More provocatively, Ackeret also said he did not think that “the city’s attempt to push what I think the city perceives as an undesirable organization out of their community should be given credence.”
He did not elaborate.
Friendship Pasadena Church was the first African American Baptist Church in Pasadena.
Strobel said the issue before the court was whether the city has “priority preference” over the church, not a comparison of the benefits of the proposals. As for pending legislation, she said it is too speculative to try to anticipate what it will say or how it will affect the proceeding.
Ackeret also wanted the judge to consider video of the interviews Caltrans had with city representatives during its review the proposals. He said these would show either the city’s “lack of understanding” of the regulations or demonstrate the city was not intending to comply with the regulations so much as their spirit.
South Pasadena attorney Holly Whatley said either demonstration would be “irrelevant,” and the judge agreed. Strobel said unless Caltrans could produce a letter in which it told the city the denial of its proposal had something to do with whether the city understood the regulations, then the recordings would make no difference.