South Pasadena, Caltrans and other parties of interest are set to convene today for a mediation session over ongoing litigation between the City and Caltrans. While the case at hand is over the legality of Caltrans’ agreement to sell a multifamily unit in South Pasadena to a church in Pasadena, the mediation could include a discussion of a proposed “global” settlement that could lay the groundwork for the final disposition of all 68 Caltrans properties in town.
The City would not comment on, nor even acknowledge the fact of the mediation, but other sources verified it was set to be held virtually beginning at 10 am and last up to eight hours.
Parties are expected to discuss a proposed settlement to the City’s suit over Caltrans’ decision to sell the 12-unit multifamily structure 626 Prospect to the Friendship Baptist Church of Pasadena, a historically black church that wants to convert it to a low-income housing facility. Last year, LA Superior Court Judge Mary Strobel enjoined the sale pending a hearing—now set for January 24–on whether Caltrans illegally bypassed the City’s priority under the Roberti Act to purchase the property.
Meantime Caltrans, following the process laid out by SB 381—the bill authored by Senator Anthony Portantino at the city’s behest—has offered to sell the City 20 of the 68 properties it still owns in town.
Under a proposed settlement drafted by the South Pasadena Preservation Foundation, a final disposition for all 68 properties, including 626 Prospect, could be reached. Details haven’t been released, but SPPF has called it a “global settlement” that offers a plan to return the properties to South Pasadenans and ensure they are “returned equitably, efficiently, and in a cost-effective way to our neighbors—not developers or outside investors.” The proposal offers a possible alternative to the approach under SB 381 and is modeled on a 2016 settlement the City of Hayward reached with Caltrans for 100 acres of surplus property due to the abandonment of the Highway 238 bypass.
The City discussed the litigation during a closed meeting Wednesday December 7, presumably to provide direction to its attorneys for the Friday mediation. The mediation, which was rescheduled at least once, is the last meeting the parties are likely to have prior to the January 24 court hearing.
Meantime both parties have filed briefs ahead the coming hearing. South Pasadena filed its 19-page brief November 23, in which it fleshed out the arguments that won it the temporary injunction against the sale to Friendship Pasadena. It now seeks a permanent injunction and demanded that Caltrans re-offer the property under the revised rules of SB 381. It included nearly 250 pages of evidence in support of its position.
“Caltrans’ strained interpretation of the Roberti Act and accompanying regulations is not anchored in the text of statute or regulations,” the City wrote. “It ignores that the City has an absolute right to purchase SR-710 properties before private developers.
Caltrans and Friendship Baptist are due to file their brief shortly.
Since the City made the offer for 626 Prospect three years ago, some things have changed. For one, a number of the 626 Prospect renters who worked hardest to put the proposal together have moved out. Also, adoption of SB 381 changed the ground rules on which the tenants’ ownership plan relied.
Charles Loveman, executive director of Heritage Housing Partners, the nonprofit affordable housing developer which worked with tenants to develop the 626 Prospect proposal and brought it to the City, told the South Pasadenan News that from his perspective, SB 381 made things worse. That’s because it provides that surplus multifamily buildings can only be used as rental properties, while the proposal the 626 tenants made provided a path to ownership. Under SB 381, he said, 626 Prospect “cannot be converted to condos.”
Loveman said he’ll be listening on the mediation, but does not know how any settlement, even if one is reached, will impact the ability for the original deal to go forward.