South Pasadena’s long and expensive struggle to produce a general plan and related housing element is creating regulatory and legal troubles for the city, and drawing critical scrutiny of the performance of its staff and planning contractor, Los Angeles-based Placeworks Inc.
Placeworks holds two contracts to assist the City in preparing its years-overdue general plan, downtown specific plan and related housing element, a critical part of the general plan.
The City already faces an accelerated rezoning requirement as a penalty for failing to meet the state deadline for a compliant housing element and is being sued by a housing advocacy group for that reason and its failure to be forthcoming about its controversial housing element site selection process. The legal and regulatory matters are detailed below.
Meanwhile last week, South Pasadena City Council Member Evelyn Zneimer was hoping to receive a report from the city manager reconciling what she called an “overpayment” the City is making to Placeworks. It came up at the April 20 council session, when staff sought two new amendments worth $63,000 to Placeworks’ contracts, bringing their total value to $570,625.
But Zneimer said information she received from the finance department said the City already paid Placeworks $531,072 and had outstanding billings for an additional $73,781 for work done last year. That would total of $604,854–meaning the city was set to overpay by $34,229. She was the only council member to vote against the amendments and wanted to suspend paying the pending bills until the finance and planning departments resolve the discrepancy.
Angelica Frausto-Lupo, who joined the City as Community Development Director in October, said the information she reported to council was also from the finance department. She said the City had paid and pending bills totaling $476,120–well under the maximum allowed under the contracts even prior to the new amendments.
“I’m not understanding why there are two sets of numbers,” Zneimer replied.
Interim Finance Director Ken Louie said his department had done a “detailed” look at Placeworks billings prior to providing the information to Zneimer.
“There appears to be an inconsistency,” agreed Mayor Michael Cacciotti. “We all share Council Member Zneimer’s concern.”
City Manager Arminé Chaparyan agreed a reconciliation of Placeworks’ billings was in order and along with the city attorney speculated there may be work Placeworks is doing outside the two contracts. “We need an opportunity to look into what finance has provided you, compare it to what we have, and provide an accounting to the entire council,” she said.
But by May 6, Zneimer said she’s not received the reconciliation and that staff had requested an extension to provide it. Chaparyan told the South Pasadenan News May 6 the reconciliation would be presented to council May 18.
Spending and Delays
Spending on the updated general plan is a sore point because of how long it’s taken and how much it’s cost. The city’s current general plan, which had a “time horizon” extending through 2010, was completed in 1998—and that was without a contractor, though that general plan did not require as detailed a housing element.
The City originally contracted in Nov. 2016 with Woodland Hills-based Rangwala Associates to do the general plan. A draft was completed in summer 2018 and was “85 percent” complete, Kaizer Rangwala told the South Pasadenan News last week. But by then the city had adopted a “new vision.” In a letter he sent the city in April 2019, Rangwala said the City had put the project on hold and in March 2019 wrote to him saying it wanted to bring on a new contractor and drastically scale back Rangwala Associates’ involvement. In a reply, Rangwala said he’d learned the City had asked one of his employees if they’d work for the new contractor–something he said was “irregular and unethical”–and so, “with a heavy heart,” he opted to terminate the contract.
The original Rangwala contract and one amendment put the total value of the contract at almost $585,000, according to city documents.
In April 2019, the City hired Placeworks to do the general plan and in March 2020, contracted with it to do the housing element as well, along with a $106,596 amendment to the general plan contract. Last December, terms of both contracts were extended to accommodate delays. With the two amendments approved by council April 20, the general plan contract is now worth $260,312, and the housing element contract, $310,313.
The City therefore has contracted for a total of over $1.16 million to complete the general plan update since 2016.
In her April 20 staff report, Frausto-Lupo wrote “the primary reason for the delays [was] recent changes in state housing laws” as well as changing rules from the state Housing and Community Development (HCD) agency, which approves housing elements and in December rejected the draft South Pasadena submitted last October. In addition, there was the change from Rangwala to Placeworks, “transition and turnover” in city staff and preparation of responses to public comments.
“Inconsistent comments from reviewers at HCD have caused additional delays,” she wrote.
Leadership changes hit especially hard. Margaret Lin, the city’s former community development deputy director who was overseeing the general plan, left last month after eight years for a job with Impact Sciences in Los Angeles and Joanna Hankamer, the former Planning and Development director, left last fall after two years for a state job in Seattle. The City also has a new Public Works director, has no permanent finance director and City Manager Arminé Chaparyan joined the city only a year ago this month.
Chaparyan said the pandemic also created delays. As work on the housing element was ongoing, “we had almost our entire community development department out with Covid-19. It is taking us quite a bit of time,” she allowed, but adding other cities are facing the same problem. “Cities are really being held hostage” to ongoing housing legislation.
HCD has also been tough in approving housing elements—only nine of California’s nearly 500 cities currently have compliant housing elements, city attorney Andrew Jared noted.
Frausto-Lupo said the contract amendments are needed for “additional analysis [and] review of HCD comments, document preparation and additional meetings to bring the housing element into compliance.” HCD’s comments on the city’s draft housing element were “extensive” though not inconsistent with feedback HCD has supplied to other Southern California cities, including the need to address provisions of the Affirmatively Furthering Fair Housing Act, which was signed into law in 2018.
“HCD’s direction on how to implement AFFH has been evolving and many jurisdictions experienced the need to submit second and third housing element drafts to HCD,” she noted.
As well, the City’s general plan and housing element were initiated under “parallel paths” in 2019 to ensure their consistency, which while necessary “resulted in delays and scope changes,” forcing the new contract amendments which, it was noted, also provide for the possibility that HCD could reject the second draft now being finalized and require a third draft, risking further regulatory penalties and requiring more public meetings.
Council Member Diana Mahmud said the amendment language should make clear that “barring something unforeseen from the legislature or HCD, this is it. Council won’t approve further amendments.”
Zneimer asked for a guarantee for when a final general plan and compliant housing element would be ready. She said she was “very disappointed” with Placeworks’ progress.
Frausto-Lupo said no such guarantee was possible, due to the passage of new housing laws and evolving HCD guidance. “We’re doing our best to bring it into compliance.”
A very unusual scene then unfolded, prompted by Council Member John Primuth’s request for a list of the city employees working on the general plan/housing element, Zneimer’s detailed questions about who is doing what and how much work Placeworks and staff have already done, and Chaparyan’s detailed response. She said the team consists of her, Frausto-Lupo, City Attorney Andrew Jared, Planning Manager Matt Chang and Deputy City Manager Domenica Megerdichian. Frausto-Lupo, who said she often works 17-hour days, said Elizabeth Bar-El, interim long-range planning and economic development manager, has been overseeing the housing element, but did not say who took over Lin’s job overseeing the general plan.
The failure to complete the housing element is holding up “a number of other things going on in the city,” Chaparyan acknowledged. But “we are committed, this is our team, [and] we are putting all of our resources in this effort because we recognize the importance and significance of getting this done as soon as possible.”
As for what went before, “no one who was not here at the time can speak to exactly what work was done,” Chaparyan conceded. “But we have picked up where they left off and there were quite a few changes made,” including a substantial revision to the list of sites in town the City is prepared to identify as candidates for new housing units.
During the public session, there was tension over whether sites included in the first draft of the housing site election list, such as city hall, the police station and a supermarket now undergoing a substantial remodel, were realistic.
Site Selection Questions
In a May 21, 2021 email, HCD Housing Policy Development Manager Paul McDougall, the City’s principal housing element liaison, provided city staff and Placeworks with a long list of “potentially questionable” sites on the City’s draft list of mandated housing units and pointed to other issues involving the city’s use of accessory dwelling units.
“We think we’ve done a better job identifying sites” on the second draft of the list, and by adding sections relevant to new bills that have been introduced in the legislature, Chaparyan told the council.
The site inventory is the principal objection of Californians for Homeownership (CFH), which last month filed a public records lawsuit against South Pasadena and another against South Pasadena and five other cities in an effort to force compliance with housing element laws.
In the former, CFH said South Pasadena offered an “inadequate” response to its Public Record Act requests for information about the selection analysis used to identify sites for new, mostly lower income housing units. The requests began shortly after Placeworks was hired, but after months, the city disclosed “only a small number of records and withheld many others.”
CFH also complained that in response to requests for information about permitted accessory dwelling units, the City claimed it could not find data for the 2014-2016 period but is nevertheless relying on its ADU permitting in its draft housing element.
CFH also argues the City “did not specifically identify” or explain the privileges its is relying on for withholding documents. The city’s response “attempts to sweep far too much into the ambit of these privileges because it is essentially withholding all records about the development of its housing element.
Citizen Josh Albrekston cited the 11-page preview of its comments that HCD sent the City, noting it was sent months prior to the City’s filing of its initial housing element draft last October. He said the City failed to make any substantive changes except for the removal of Trader Joe’s as a potential housing site. HCD’s formal comments identified eight other major problems that would prevent compliance, especially including the City’s adoption of what Albrekston said is the “highest inclusionary housing ordinance” requirement in the state. The City “is failing” due to provisions in 2017 housing laws, not the AFFH, he added, and predicated that the City’s second housing element draft is bound to be rejected by HCD.
Council Member Mahmud noted that the real problem the City has in completing the housing element is the state’s requirement under the Regional Housing Needs Allocation (RHNA) that South Pasadena provide for 2,067 new housing units in town over the next eight years. “It is an extremely daunting task” to include those, as the city is already built out.
The second draft of the City’s housing element is due out imminently. Placeworks is set to make a presentation “relating to the second public review draft of the housing element” during the next public Planning Commission meeting set for Tuesday May 10.