Attorneys litigating Caltrans’ controversial sale of its 12-unit, multifamily residential property at 626 Prospect in South Pasadena have reached a tentative settlement. According to a document filed in LA Superior Court Tuesday, the deal calls for parties to “modify or dissolve” the hard-fought preliminary injunction South Pasadena won last year against Caltrans’ sale of the property to Pasadena’s historically black Friendship Baptist Church.
Settlement terms weren’t disclosed, but dissolution of the injunction would allow the sale to go through. It is unclear what the modifications the filing refers to are, but the City’s been pressured to negotiate a “global” settlement that would affect the disposition of other Caltrans-owned properties in town.
The City declined to comment on the filing, but Brad Fuller, an attorney for the Church, said “it is a wise move for the City to allow for the dismissal of their injunction.” He said he hopes the City’s action is “because they realized they didn’t have any reason to oppose Pasadena Friendship Church running an affordable housing facility in their jurisdiction.”
According to the document, the tentative settlement must be approved by the parties’ governing bodies. If the settlement is approved, the parties are set to dissolve or modify the injunction at a hearing Feb. 23.
The disclosures come nearly a month after the parties met at a secret, day-long virtual mediation conducted Dec. 9 by retired LA Superior Court Judge Rita Miller.
Pending approval of the settlement, a hearing on the merits of the City’s case has been postponed until April while the deadline for Caltrans to submit its reply to the City’s Nov. 23 opening brief – previously due late last month – has been extended.
South Pasadena City Council members discussed the case in closed sessions on Dec. 7 and Dec. 21 but have not yet voted on the settlement. It was unclear why the Council did not await the filing of Caltrans’ brief before agreeing to the mediation.
South Pasadena sued Caltrans over the sale in support of a group of Caltrans tenants at 626 Prospect whose 2019 purchase proposal leveraged the city’s housing authority to make the bid. Caltrans instead offered the property to the Church, which the City argued violated its priority under the Roberti Bill. In July 2021, Judge Mary H. Strobel granted the City a preliminary injunction against the sale pending a hearing on the merits.
Since then, pursuant to Roberti and the city-sponsored SB 381, Caltrans offered the City 20 of the 68 properties it still owns in town; the City is due soon to inform Caltrans which properties it wants to acquire.
Meantime a subgroup of the South Pasadena Preservation Foundation, which is not a party of the litigation, has pushed hard for a “global” settlement encompassing the 20 properties Caltrans offered as well as 626 Prospect. Another group of Caltrans tenants who recently won a case against Caltrans giving them the right to purchase their homes at Caltrans’ original acquisition costs also pushed the City to move ahead with its litigation.
Moments after being elected mayor during Dec. 21’s City Council meeting, 3rd District Council Member Jon Primuth, who serves on the Council’s ad hoc committee on the Caltrans homes, mentioned the Caltrans properties, saying without elaboration that “the Council soon will have a well-developed set of options for the Council to decide on how to begin the process of restoring these homes as affordable residences with homeowners and renters.”
In addition to Caltrans and the City, the tentative settlement was signed by attorneys for Friendship Baptist Church and Heritage Housing Partners, the non-profit housing development agency that 626 Prospect tenants partnered with to develop their purchase proposal.
But several of those tenants have since left the property and the entity they created to take possession of it, New Prospects Housing LLC, was dissolved.
Sean Abajian, the ex-President of New Prospect Housing, whose wife Suzie served on the South Pasadena Unified School District, told the South Pasadenan his family has “moved on. 626 Prospect represented a unique opportunity for us to become homeowners in South Pasadena—a city where we were otherwise priced out.”
“As we saw home prices everywhere continue to rise and there was no guarantee of things working out to the benefit of the tenants at 626, we felt we needed to buy something elsewhere before we got priced out of the entire region.”
The family purchased a home in Burbank.
Note: A previous version of this story said the tentative agreement must be approved by the California Transportation Commission. In fact, the CTC does not need to do so. According to a Caltrans spokesperson, terms of the settlement will remain confidential and “once the sale of the property is presented, the CTC will have the opportunity to approve or deny that transaction. No date for that action has been set.”