Developers sue Los Gatos over builder’s remedy project application

A developer is suing Los Gatos over the town’s application requirements for a builder’s remedy project after almost a year of back and forth on the application’s completeness.

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Vista Capri is a builder’s remedy project led by Campbell-based architectural firm Anderson Architects and owned by Los Gatos LLC, a real estate company based in Fullerton. While developers assert that their project would expand housing options and take advantage of nearby transportation features, they dispute the application requirements requested by the town. Los Gatos LLC said they are in active settlement negotiations with the town and coordinating with the California Department of Housing and Community Development.

“We have attempted to work with the town, but due to the town’s continued resistance to new housing, we have had to file a suit to bring the town into compliance with the state housing laws,” wrote Los Gatos LLC in an email to this news organization.

The developer’s plans call for an eight-story, 14-foot-high apartment building at 14288 Capri Drive consisting of 119 units; 24 of which would be designated as lower-income units, according to the project description. They are offering studios, one-, two- and three-bedroom units, a covered barbecue area, a community outdoor roof deck and a basketball court. The outer walls would use stucco finishes, and a metal screening would enclose the parking garage on its base.

Los Gatos LLC asserted that the town has so far approved less than 6% of the low-income units required by its Housing Element. The town is required to make around 850 units affordable to low-income residents. Based on the recently approved developments on the town’s SB330 Application Tracker, the three projects currently approved would only provide 40 affordable units, less than 5% of the total.

A letter sent to the town on May 28 from the Law Offices of Richard Jacobs on behalf of Los Gatos LLC alleges that it was unlawful for the developer’s application to be considered incomplete based on the town’s submittal requirement checklist on its Project Plan Submittal Guide. The lawyer asserts that the town’s request for a conditional use permit for the project is illegal. The developers argue that the permit requirement is overruled because the town failed to pass a compliant Housing Element before they submitted their application. The letter goes on to assert that many of the town’s application requirements, including those that ask to specify curb sizes and surfacing materials and to provide the number of stories on adjacent buildings and floor area ratio of nearby sites, are illegal.

“The town’s continued improper designation of “incomplete” status on this project application appears to simply be carrying out the town’s attempts to block builder’s remedy projects that bring much-needed low-income housing to the Town,” Jacobs wrote in his letter to the town. He refused to provide further comments to this news organization.

The apartments would be built on a half-acre triangular site between Winchester Boulevard, Capri Drive and Highway 85. The parcel is zoned for commercial use, with a single-story wood-framed building currently occupying it. Developers are requesting to demolish the existing structures to build the complex.

Los Gatos town staff state that the Vista Capri application is still pending and the town is reviewing the lawsuit, adding that they gave developers the chance to appeal the determination that their application was incomplete, but no appeal was submitted. Staff asserted that the town was within its rights to request a conditional use permit to allow a residential development in a commercial zone.

“The town’s requirement for a conditional use permit is not a legislative action, but rather a quasi-judicial action,” staff said in its response to the developers.

The developers have submitted three applications thus far for Vista Capri. The first application was submitted on Aug. 19, 2024. It then went through a second cycle on Dec. 4, 2024 and entered its third cycle on March 28 of this year.

From the beginning, it seemed that the developers and the town would have a tense working relationship. After the planning commission first rendered the application incomplete, the developers asserted that the town was misunderstanding state housing laws, saying that the application doesn’t just expire if their supplemental submission is found unsatisfactory. However, the town asserted that staff can ask for additional information on each resubmittal as long as it is consolidated to a single letter.

The applicants also took issue with the requirement to provide environmental analysis for the project, per the California Environmental Quality Act. Town staff requested that the developers pay for a CEQA analysis to be conducted and asked if the developers will be providing any technical studies.

The developers said that they would address CEQA requirements once the application is considered complete, saying that the order that the town was requesting the information in was, “putting the figurative cart before the horse.”

Town staff responded that while the developers could put off CEQA analysis until after the application is complete, it would delay their application from going before a public hearing.