Second Developer Files Suit Against San Clemente’s New Growth Limit

The Lusk Co. on Wednesday became the second developer in three days to challenge San Clemente’s tough new growth limit in court.

In twin lawsuits filed in Orange County Superior Court and U.S. District Court in Los Angeles, the Irvine-based firm alleged that the voter-mandated growth restrictions are an unconstitutional infringement of property rights. The firm seeks a court order barring enforcement and $50 million in damages.

The Lusk Co. is owner of Marblehead, a largely residential development in north San Clemente that includes the site for the Nixon Library.

Similar court actions were filed Monday by a development unit of Phoenix-based Western Savings, which is seeking $100 million in damages in connection with its Rancho San Clemente project.

In a written statement distributed through a public relations firm, The Lusk Co. said it hopes “litigation will result in a community-supported re-examination of the housing and infrastructure needs in the City of San Clemente.”

In the statement, the firm threatened to curtail expenditures on public improvement projects in San Clemente.

“If the Lusk Co. cannot now rely on stability and certainty in the city’s land-use entitlement (approvals and permits) process, these major investments in public improvements do not make economic sense,” the statement said.

But Don Steffenson, Lusk Co. executive vice president, said in an interview that he did not have specific public improvement projects in mind that his firm might put at risk financially.

Meanwhile, a third pair of lawsuits is expected to be filed soon by Estrella Properties, which claims its development plans for Forster Ranch are exempt from new growth limits under terms of a 1981 settlement of a lawsuit against the city.

The current spate of lawsuits stems from voter approval last February of Measure B, which limits the four major developments in the city’s backcountry area to 500 units per year.

Grass-roots organizers of the campaign for Measure B have vowed to “do it again” if the ordinance fails these court tests.

Although a majority of San Clemente’s City Council members opposed Measure B, Mayor William C. Mecham said Wednesday that the city will vigorously defend the ordinance in court.

“We would take all the resources that are necessary to take it to court and properly defend it. . . . We have no compunction about taking what the people have given us and enforcing it or defending it,” Mecham said. “I think the litigation was highly predictable. The circumstances within the city, with all of the (open) land in four hands, makes it likely that this (court action) is going to happen. We talked about this as a consequence before passage of the measure.”

Steffenson said Lusk’s Marblehead project involves plans for more than 2,800 units, while permits have been obtained so far for 586, some of which are completed.

The lawsuit filed Monday by Western Savings’ development unit involves plans for 2,931 units, for which 834 permits have been obtained.

Lusk’s Steffenson said Wednesday that his firm has spent $70 million on infrastructure improvements, grading and other expenses, not including money spent on units already constructed.