City Fears Fallout of Court Ruling Favoring Builder : Thousand Oaks: It could eliminate a series of roadblocks that developers routinely face when pursuing projects.

As pro-growth advocates celebrate, Thousand Oaks officials have begun assessing the damage caused by a stinging state court ruling issued last week that chastised the city for the “cavalier manner” in which the council has denied development projects.

The ruling exposes the city to a multimillion-dollar lawsuit from disgruntled builder Nedjatollah Cohan. And, legal analysts say, it could eliminate a series of roadblocks that developers routinely face when pursuing projects in Thousand Oaks.

“This was the crowning blow to the city,” said Neal Scribner, a Thousand Oaks architect and vocal proponent of development who chairs the property rights subcommittee of the Mayor’s Business Round Table. “It’s a decision we’ve been waiting to hear for years.”

The 2nd District Court of Appeal ruling, published Monday, reversed the city’s denial of Cohan’s plan to build houses and a strip mall on 47-acres of Newbury Park grassland.

The opinion, a harshly worded condemnation of the council, said the city trampled Cohan’s constitutional rights during the important steps leading up to the 4-1 vote against the housing project.

Now, in a city where careful planning and controlled development have been the mainstays of public policy, officials may be forced to rethink methods they have long used to prevent builders from blanketing pristine land with houses and strip malls.

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“I have a great deal of concern about this decision and about the long-term impacts of this,” Thousand Oaks City Atty. Mark Sellers said. “This decision opens up a whole can of worms in terms of its potential to limit the rights we expect the council to have.”

The ruling lists several procedural errors that the city made as it pondered the Cohan project. The judges, however, focused primarily on the council’s decision to appeal a Planning Commission ruling to itself.

While it has been common practice in Thousand Oaks for the council to appeal rulings to itself, the panel of three judges said it diminished the developer’s chance for a fair hearing.

“By appealing the decision to itself, the council evidenced at least the appearance of a conflict of interest,” the ruling stated. “The council, in its zeal, made sure the decision did not stand unchallenged.”

If that analysis withstands an appeal, Sellers said, it would take away the council’s ability to challenge Planning Commission rulings and could potentially force the city to change its procedures.

From his pro-growth viewpoint, Scribner said he hoped the changes will help eliminate political pressures from council decisions on development.

“What this ruling should be saying to the council is, if someone has followed the rules, they can’t just turn a project down because it’s unpopular,” Scribner said. “They need to follow the rules too.”

By limiting appeals, the ruling could leave the Planning Commission holding more power over development issues. And unlike the council, which the judges’ criticized for submitting “to the roar of the crowd,” the Planning Commission was specifically told to avoid basing a decision on political grounds.

But taking the decision-making power out of the council’s hands would be a mistake, Councilwoman Elois Zeanah said.

“The council needs to have oversight over the commission,” she said. “To remove that would be taking away one of our basic rights as elected officials.”

If too much power is given to the commission, several city leaders said, the council may consider eliminating the Planning Commission entirely.

“That could very well be an offshoot of this,” Planning Commission Chairman Irving Wasserman said. “They may decide to get rid of the commission, or rework it so that the commission has no power at all.”

City officials said they hope a successful appeal would keep them from having to change the existing process.

“I think we’re all going to bank on the (California) Supreme Court to hear this case and to overturn this ruling,” Zeanah said. “And I think when we do begin fighting, every city in California is going to get behind us.”

City Atty. Sellers said he has already received numerous calls from city attorneys around the state inquiring about the ruling.

“I think they all see the potential for this to be a dangerous precedent,” Sellers said.

In Pismo Beach, for instance, news of the ruling forced the City Council to back down from a plan that would have permitted the council to appeal Planning Commission rulings.

“We became very concerned when we heard about the ruling,” Pismo Beach City Atty. Kathleen Weinheimer said. “We saw the appeals process as a way to add checks and balances between the council and the Planning Commission. This ruling sends us back to the drawing board.”

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She said she expected most cities would like to see Thousand Oaks appeal the decision. Otherwise, the decision could remain on the books and be used as precedent in future cases.

Ultimately, Sellers said, that decision will be in the hands of the new council.

The city can either challenge the ruling or try to reach a settlement with the Cohans, Sellers said. If the city settles, it could help avoid the potential for another lawsuit by the Cohans, this time for damages.

“It’s clear now that the city shot from the hip and broke the rules,” said Cohan’s son, Albert Cohen. “And the long delay we suffered because of it has cost us.”

Sellers said suits such as the action the Cohans may decide to file typically ask for millions of dollars in lost revenue.

“Damages can be quite tremendous,” Sellers said. “If we lost, the money would have to come from our reserves.”

Scribner said that should be a sobering message to Thousand Oaks.

“It should send a message to the city that developers who try their hardest to work with the city should not be shot down just because it’s politically expedient,” he said.