Post Office Box 371149
Montara, CA 94037-1149
+1 (650) 728-9500
22 May 1995
Honorable Ted Lempert, President
Board of Supervisors
County of San Mateo
County Government Center
Redwood City, CA 94063
re: Fishing Village Associates Proposed Development Agreement
Honorable Members of the Board of Supervisors:
The proposed Development Agreement between the County and Fishing Village Associates should not be adopted in its present form because it does not equitably serve the best interests of the citizens and voters of the County. My concerns are about the terms of the Development Agreement itself, and in no way relate to the specific project contemplated, which has already had hearings and received the necessary approvals. For each area of deficiency, I have suggested changes that in my opinion would protect the interests of all citizens and voters, while still ensuring the completion of this project as proposed.
- The agreement is unnecessary. The owners already have the approvals and permits necessary to go forward with this project at this time. If the Board of Supervisors feels that desirable development projects in the County require a ten to fifteen year extension in approvals and permits, then that concession should be made available equally to all property owners, not just Fishing Village Associates. Otherwise, this owner should be expected to comply with the same laws and regulations as all other property owners in the County.
- The agreement lacks any substantial enforcement provisions. If this project is as important to the Coastside as it has been portrayed by the owners and the Planning Commission, then there should be a completion bond or other financial incentive to require completion. Since the project is estimated to produce $1,240,000 per year in hotel and real estate taxes, I suggest that the owners place in escrow $12,400,000 to be applied to future hotel and real estate taxes generated by the project, with any remaining funds to be returned to the owners at the termination of the agreement. Upon default of the owner to complete the project as required by paragraph 5 of the agreement, any escrow funds would revert to the General Fund of the County as compensation to the citizens and voters of the County who are injured by the owner's default.
- The agreement allows property transfer to a new owner who may disclaim responsibility for agreements and representations made during the public hearing process. The current owner has done the homework to plan and secure approvals for this project, and as part of that process has had an opportunity to hear and understand the concerns and objections of nearby residents regarding the project. The current owner has made changes to the original project to accommodate those concerns and objections. The public can reasonably expect the current owner to responsibly construct the project in accordance with its representations and agreements during those public hearings. A new owner will lack this historical context and be tempted to stretch every detail to its advantage, without regard for promises and representations made to the public by the current owner. Furthermore, the terms of the agreement allow many changes to be made without public notice or hearing, thus preventing accountability of the new owner to nearby residents. Since the current owner understands the sensitive nature of the coastal environment and the desires of nearby property owners and local residents, this agreement should be limited to the current owner. Nothing precludes the owner from transferring the property to another developer, along with all the plans, drawings, and copies of permit applications; such a new owner should have little difficulty in submitting the same project and obtaining the same approvals and permits as the current owner has already obtained, but with the opportunity to hear first-hand at public hearings the concerns of the citizens about this plan.
- The agreement appears to attempt to pre-empt the right of the Board and of the voters of San Mateo County and the State of California to make reasonable changes to the Local Coastal Plan and zoning ordinances in the future to meet changing needs. Although it is not entirely clear from the terms of the agreement (and may thus result in prolonged and costly litigation), the proposed agreement seems to subvert the right of the voters to regulate development and zoning. If it is indeed the desire of the Board of Supervisors to disenfrancise local voters, the agreement should be clarified to include a recital as follows: "I. A proposed voter initiative, the Coastal Protection Initiative of 1994, which would have restricted the permitted height for this project, was disqualified for the ballot through a technicality. It is the intention of the Board of Supervisors and Fishing Vilage Associates to bar any interference with this Development Agreement by the voters of San Mateo County. Therefore, if the voters of San Mateo County approve any initiative proposal further regulating development on the subject property, that initiative is hereby declared null and void and of no effect with regard to the subject property or the proposed development thereon." If, on the other hand, it is the desire of the Board of Supervisors to protect and defend the rights of the citizens of San Mateo County to enact such regulations as those citizens shall deem fit, then Section 1, definition I should be modified to read: "'Zoning Ordinance' means the zoning ordinance of County, as it exists on the date any zoning approval or building permit required by this project is granted, as set forth as Division VI, Part 1 of County's Ordinance Code."
- The agreement reduces the value of surrounding properties and may thus be a "taking" of private property under interpretations currently being considered by Congress, opening the County to possible litigation and financial costs. As noted earlier, there is no guarantee that this proposed project will actually be constructed (and no penalty to the owner if it is not), yet the possibility that it will be constructed reduces the potential profitability of similar visitor-serving facilities along the mid-coast, thus injuring owners of those properties. Furthermore, any other proposed development in the vicinity will have to take into account the traffic, noise, water, sewer, and other resource requirements that are dedicated to this project by the proposed agreement. This joint planning may significantly increase the costs of other projects that are uncomplicated if considered on their own, or delay or prevent such projects due to limited resource availability.
- The agreement is unconscionably one-sided, favoring the owner in every instance and offering no protections to the County, its residents, or its voters. If it is the desire of the Board of Supervisors to award a large financial windfall to these owners, it should do so in a direct and above-the-board manner, appropriating tax funds and granting them to the owner, rather than through a round-about mechanism that conceals the economic benefit being granted. If there is some tax benefit or loophole that would allow the current owners to reduce their taxes by virtue of holding the proposed Development Agreement, then the County should not be party to such an undertaking, because inevitably the other taxpayers of the County will have to make up the shortfall caused by tax preference to the current owners.
- The agreement enlarges the permitted uses beyond existing approvals. In particular, Section 8 provides that the proposed hotel "may be operated in whole or in part on a time-share basis". This opens the door for a future owner to sell units in such as fashion that the project effectively becomes an 84-unit residential condominium, with unanticipated impacts on schools and other area infrastructure. This provision should be deleted from the agreement.
- The agreement conceals changes from public scrutiny. Throughout the agreement, there are provisions that changes, modifications, alternations, etc., may be made without the usual public notice, open meetings, hearings, review, and other processes in place by state law to protect the interests of the public. These provisions seem contrary to public policy and should be deleted.
In conclusion, the proposed Development Agreement is seriously flawed in its current draft and should be sent back for redrafting -- by the County, not by the owners -- to overcome the shortcomings and objections raised above.
/s/ Paul Perkovic