Developers involved in a controversial five-story building proposal for downtown Los Altos are seeking an additional $4 million in damages from the city, which has fought against the project.
The Los Altos City Council is scheduled to discuss the litigation during a Tuesday (Oct. 27) closed session.
Rejected by the council in April 2019, brothers Ted and Jerry Sorensen took the city to court. In April, Santa Clara County Superior Court Judge Helen E. Williams ruled state law, specifically Senate Bill 35, supersedes local zoning regulations and allows for the mixed-used project at 40 Main St. The judge ruled that the city offered no objective reason for denying the Sorensens’ project.
The city opted to appeal in July but dropped the appeal in September after discovering the judge granted the developer’s request that the city post a $7 million bond. Given the significant po-tential costs involved, the council unanimously voted to drop the appeal.
“If the city lost the appeal, (Los Altos) would be required to pay the full amount of the bond to the developer, plus any attorney’s fees, which is likely to exceed $10 million,” council members said in a Sept. 5 statement.
The council agreed to pay $490,001 to the developers to cover attorney fees spanning the time the city’s appeal was active, from early July to early September.
The Sorensens have since filed an Oct. 16 motion to amend their complaint, asking for the additional $4 million. A court hearing is scheduled Dec. 16.
“The ($490,001) payment did not compensate the developer for the damages the city had caused during the period from which it first breached its mandatory duty in denying the permit until it filed the notice of appeal,” according to a document filed in Superior Court. “The developer then filed a motion to amend, which this court can and should grant.”
“We are aware of the new motion filed by the attorneys for 40 Main, and it is being reviewed by our attorneys who will respond to the court at the appropriate time,” said Los Altos City Manager Chris Jordan.
Jordan said he couldn’t comment further on the legal matter.
The action is the latest in a battle between the Sorensens and the city dating back more than a decade. The developers have tried repeatedly to secure approval for a three-story office building at their 40 Main site. They have been rejected each time. The 2017 passage of SB 35, which allows for streamlined approvals of housing projects, in part prompted the Sorensens the following year to propose a 66-foot-high building with 15 rental housing units, two deemed affordable, and office space.
In filing the July appeal, city council members maintained the proposed project did not comply with local zoning requirements and that they remained enforceable “notwithstanding recent changes to state law (SB 35).”
“It also is particularly inappropriate due to its narrow lot, and raises significant public safety concerns because all ingress and egress to its proposed two-level underground parking garage is provided by a single elevator lift,” the city stated in a press release.
Town Crier co-publisher Dennis Young is an investor in the Sorensens’ project.