Nearly 10 months after South Pasadena Mayor Jon Primuth said the City “soon will have a well-developed set of options” to purchase 19 Caltrans-owned residential properties, no plan has emerged. Meantime the city’s cost for a lawsuit over the sale of a separate Caltrans property has skyrocketed and the court set an Oct. 31 deadline for parties to complete mediation of the dispute.
Securing surplus Caltrans-owned property in South Pasadena for the promotion of affordable housing is an objective of the city’s strategic plan, one of the programs under its recently-adopted Housing Element, and was the purpose behind SB 381, the city-sponsored legislation signed by the governor in September 2021.
Caltrans spokesman Eric Menjivar told the South Pasadenan News the agency sent the city contracts for 13 of the properties on May 12 and for an additional six properties with historic significance on May 30. “Since then, Caltrans has granted two extensions to the city to sign the contracts, with the most recent extension due at the end of October.”
He declined to elaborate on the remaining issues in the litigation, but in an August court filing, Caltrans complained the City “is no longer interested” in the commitment it made last December to a tentative settlement in the lawsuit, and rejected the city’s effort to combine settlement of the case with the delayed surplus property purchases.
Deputy City Manager Domenica Megerdichian declined to offer an update on the city’s proposed purchase of the 19 Caltrans properties, saying only that the City Council “is working through implementing SB 381 on the disposition of the Caltrans properties.”
She also said the city would not comment on pending litigation over the 12-unit Caltrans property at 626 Prospect Ave. In July 2021, the city won a preliminary injunction against Caltrans’ sale of 626 Prospect to the predominantly African-American Pasadena Friendship church, which wants to refurbish the mostly vacant multi-family structure and maintain affordable rents for its residents. The court has repeatedly delayed hearing dates while the parties joust over final settlement terms.
The delays began after a group of former city mayors and a subgroup of the South Pasadena Preservation Foundation pushed the City Council to seek a “global settlement” to address both 626 Prospect and purchase of the 19 Caltrans properties. They want the city to structure the settlement using terms they see as optimal but which the Mayor and others have said are not viable.
The City Council has scheduled at least 10 closed meetings to discuss the lawsuit this year alone. On five of those dates, it also scheduled closed discussions on the price and terms for the 19 Caltrans properties.
Meantime legal costs are accumulating. Besides the cost of the city’s newly hired law firm, Richards, Watson & Gershon, which has two attorneys on the case, the council -at the behest of the South Pasadena Preservation Foundation – late last year also signed a $25,000 contract with Akin Gump attorney Dario Frommer to serve as a special counsel providing “legal services related to the [626 Prospect] litigation as well as the disposition of the Caltrans properties.” In August, Council approved a second amendment to the contract nearly sextupling its value to $141,000.
In an Aug. 18 petition, the City asked the court to order a mandatory settlement conference. While the parties have made “significant progress towards an all-encompassing resolution,” it said issues remain and parties need time to review emergency rules Caltrans adopted July 5 pursuant to Senator Portantino’s SB 959, which concerns the sale of Caltrans properties in the SR710 corridor under the Roberti Act. The city said the new rules “may help the parties resolve” the remaining issues.
The rules detail which surplus properties are offered; to which private or public or private entity they can be sold; require that any profits be directed to affordable housing development; and setting out which city get the money.
Meantime Chris Sutton, an attorney representing Caltrans tenants outside of South Pasadena, has threatened to intervene in the litigation, arguing the deal Caltrans struck with the church does not best serve the 626 Prospect tenants.
South Pasadena also asked the court to postpone deadlines for the completion of its contemplated purchase of the 19 Caltrans properties.
Caltrans objected to City’s petition, arguing “there is no reasonable nexus between the current action and the property negotiations for the 19 vacant homes” and saying the court has no jurisdiction to postpone any of the property sale deadlines.
After a hearing Aug. 25, Judge Curtis A. Kin did not address the city’s request for a mandatory settlement conference, which would have required the parties to bring representatives authorized to execute any agreed compromises. Instead he ordered that the parties complete their mediation by Oct. 31 and said that any mediation after that date “shall not be grounds for the Court to postpone or delay adjudication of this matter.”
He also set Nov. 7 as the date for a “post-mediation status conference.”