Amid public appeals, residents’ ire, and a lawsuit peppered with provocative allegations, a massive, 501 unit apartment complex has taken its first steps toward being approved in Gilroy.
The application for the complex has been the center of a dispute between the city and developer Gandolfi Investments, which hopes to take advantage of a state law to build the development in an area currently zoned for industry. Though the city this week deemed the application “complete” allowing the developers to take the next steps toward building the complex, the developer is moving forward with a suit alleging that the city tried to illegally obstruct the project.
The proposed complex would feature 501 units – 101 of which would be designated affordable housing – as well as clubhouses, parks, and resort style pools on about 27 acres currently zoned for limited industrial use on the northern end of Gilroy.
Gandolfi is hoping to exploit a subsection state law known as builders remedy that stipulates if a city is late to submit a state-approved housing plan, developers may be able to skirt local zoning laws and propose housing projects of virtually any size, as long as a portion of the building includes affordable units. The city, however, disputes whether the law applies.
The developer submitted applications in both December and February, but city staff asserted that they were incomplete and provided a multi-page letter listing missing requirements. While the city maintained that it was asking for materials that applied to all applications, Gandolfi argued that these did not apply under builder’s remedy, saying that the city effectively denied their application by abusing its ability to call it “incomplete.”
“Really it’s apparent to anybody who’s gone through this (application) process that the letter throws the kitchen sink at us,” said Eli Aizenman, Vice President of Development for Ten South, which owns Gandolfi and would construct and manage the project.
At a meeting on May 20th, the developer appealed to the Gilroy City Council to overturn the staff decision.
Aizenman noted that the developer had offered a settlement as a way to negotiate and avoid litigation, and threatened to file suit if the appeal was not approved.
City council voted 4-2 to deny the appeal, with councilmembers Fred Tovar and Rebeca Armendariz opposed and Zach Hilton abstaining.
On Friday July 25, Gandolfi made good on its promise and filed suit. The suit asks the court to order the city to set aside the May 20 city council decision, review, process and approve the application, and pay back legal costs and fees.
While much of the lawsuit outlines arguments regarding builder’s remedy and housing law, some delves into assertions of bias and of conflict of interest, including a memorable passage comparing a quote from Gilroy Mayor Marie Blankley to that of “television gangsters.”
In a news release this Wednesday, the city called the allegations “unfounded,” saying that no one in staff or on the City Council had taken an “irrevocable position” on the development.
While Blankley declined to comment on the specifics of the lawsuit, she asserted that city staff needed the right documentation to analyze the impacts of the project. “The city is processing their application like any other and always has been,” she said.
City council was scheduled to discuss the litigation in closed session this Monday, and several residents who lived nearby the proposed development showed out in force. Most supported the development, arguing that the apartments would help alleviate the current housing shortage in Gilroy.
“Many of us live in houses where there are two to three generations … They live three to four people in a room,” said resident Reyna Deniz in Spanish, saying she brought 320 signatures from residents in support of the project. “We need this low income housing.”
Others, however, agreed with city staff’s prior determination or questioned the builder’s choice of location. “We aren’t against building affordable homes, but we want to do it the right way,” said Gilroy resident Ron Kirkish. “Why … use builder’s remedy instead of going through our normal process?”
Following the closed session, the council reported that it had voted 4-3 to defend its position against the lawsuit, with councilmembers Tovar, Armendariz, and Hilton dissenting.
On Tuesday, Gandolfi submitted an application for a third time, and the following day, the city responded saying that the application contained all the necessary materials and was complete.
Moving forward, the city will need to analyze the public safety and environmental impacts of the project or notify the developer of any inconsistencies, and has 60 days to notify Gandolfi of what it must provide for that analysis.
“We’re having them follow the exact same steps as any other housing process,” said city administrator Jimmy Forbis. “We’re trying to figure out if the project works for Gilroy.”
Aizenman, however, said that the developer plans to continue legal action “despite the city’s intention to undermine the lawsuit” by calling the application complete, and maintains that the city is using the 60 days to illegally “throw up more roadblocks” in front of the developer. “It’s just more gamesmanship,” he said.
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