Signal Hill Moratoriums Anger Developers : Code Changes Foster Frustration

At Cherry Avenue and Hill Street here stands a sprawling monster of a building known as the “White Elephant.”

Construction on the 30-unit condominium complex began in 1979, but because of construction problems and bankruptcy proceedings, the building will not be completed until sometime this summer. With empty porthole windows that gape blindly down at City Hall, the White Elephant is a symbol of the kind of spotty development that came with the first flood of condominiums and is a reminder of the type of construction the government here will do anything to avoid.

“It (the building) has been in trouble since the beginning regarding high density, poor design and shoddy construction,” said City Manager Louis Shepard. “That combination is a disaster, and we can’t have that happen in the future.”

The condominium project has been taken over by Golden State Sanwa Bank. “They have done a wonderful job of fixing the building up,” said Christine Shingleton, director of planning and community development. She said the renovated complex is expected to open in the summer.

In its efforts to ensure future high-quality construction and erase a legacy of bad building, the City Council has angered local developers, who contend that the lawmakers have enacted a series of moratoriums and changed the building rules so often that the council has effectively taken their property rights away.

No Permits Since 1981

Not a single building permit has been issued for a new multi-family project since 1981.

The current moratorium, approved unanimously in April, stopped construction in most areas zoned R-4 for multiple-family dwellings.

“I feel like development in Signal Hill is a parlor room game,” said developer Arne Hamala, whose plans to build a 141-unit condominium complex are on hold because of the recent moratorium. “We (developers) are like pawns being moved around . . .. I agree they have a bunch of junk on the hill, but my project is being tarred and feathered with a brush that should have been applied elsewhere.”

Between 1975 and 1981, 1,330 condominium units were built in Signal Hill, primarily on land vacated when oil wells were abandoned. Lax building standards approved during that period by Old Guard city councils caused “a lot of really third-rate stuff” to be constructed, Shepard said.

The condominiums begun during that period had problems ranging from a Jacuzzi that sank through an underground garage to a trash dumpster area into which no garbage truck can fit.

But City Council elections in 1982 and 1984 replaced the Old Guard council members with a slate of officials whose campaign platform on residential development promised lower density and stricter building standards.

Since the new council took office in April, 1984, it has enacted three building moratoriums, prohibiting building on 220 of the 1,360 acres in the city.

General Plan Overhaul

The most recent moratorium, which is the most sweeping, halted all approval of multi-family construction until the city can overhaul Signal Hill’s general plan, building densities and zoning maps. Some of the neighborhoods zoned as multiple family could be reduced to single-family by next March, when the process of amending the general plan and zoning maps should be completed.

Though the council upgraded building standards in August, 1983, and R-4 density was reduced from a maximum of 43 units per acre to 27, those revisions did not affect zoning. Currently, only two blocks in the entire town are zoned for single-family dwellings; the rest is zoned for condominiums and apartments.

“In 1983, we changed the density in the R-4 zone,” said City Councilman Gerard Goedhart. “But the question we should have asked was whether we really wanted that much R-4.”

The answer, Goedhart said, is no.

If multi-family zoning is reduced, developers say, property values will drop markedly. But such an occurrence will be only one more in a long string of problems they say they have with the city government here.

“The moratoriums affect us and all the other property owners in the impacted area,” said Jerrel Barto, a partner in a development firm called the Signal Hill Co., which is suing the city for $27 million in a development dispute. “Not only can you not build; you cannot even plan. You do not know what they want, and they don’t know what they want either.

“If you cannot make any plans for any use at all for your property, your value is zero,” he said. “This is like inverse condemnation. They’ve taken our land away without due process.”

Barto, his son, Craig, and developer Byron Tarnutzer began negotiating in late 1982 for 214 acres of land owned by Shell California Production Inc. In 1983, the city changed its density regulations. In April, 1984, the council enacted its first two moratoriums, and weeks later the Barto/Shell sale closed.

What Tarnutzer and the Bartos were left with, they contend, is a useless piece of property.

6 Projects Stalled

The Signal Hill Co.’s is one of six condominium projects stalled because of the moratoriums, said Councilman Goedhart.

Developer Hamala’s is another. In 1980, Signal Hill officials gave initial approval for a 200-unit condominium complex to be built by Shearson American Express on the northeast corner of 20th Street and Temple Avenue. Although Butler Housing Corp. was the original developer, Hamala has since taken over the project.

Since that preliminary approval date, Signal Hill has had three sets of building standards. As a result, Hamala said he revised the building plans to make the complex 141 units and then revised it again to 122. Reduction in density lowered the value of the $4.2 million parcel by about $1.5 million, Hamala contends.

The revisions were bad enough, Hamala said, but on April 23, the city enacted its residential moratorium, and the project is now on hold.

“The standards are changing here faster than the building process will allow you to comply with them,” Hamala said. “It’s a continuous treadmill. You keep on running but you make no progress.”

The city, however, defends its actions. Councilman Goedhart said the interim measures approved in 1983 were mistakes that now must be fixed. And City Manager Shepard contends that the moratoriums and revisions are part of the city government’s long-range planning for this city in transition.

“There is nothing more fundamental the city can do than plan the residential areas on the hill with great care,” Shepard said. “If it takes a little bit longer, that is OK. Once those residences are built, they’re going to be here a long time.”