Developer wins suit against L.A. over El Sereno housing tract project


A real estate developer has won its legal battle to build 24 homes on a vacant hillside in the Los Angeles neighborhood of El Sereno -- and is now looking to recoup its financial losses from City Hall.

Los Angeles Superior Court Judge James C. Chalfant ruled Monday that the City Council had no authority to order Monterey Hills Investors LLC to perform a new environmental impact report on its proposed subdivision of single-family homes.

Ignoring the advice of its lawyers, the council voted in 2007 to demand the additional review, effectively blocking the developer from moving dirt and building new roads in the area nicknamed Elephant Hill.


Monterey Hills Investors, which claimed in its lawsuit that the city’s actions cost it more than $8 million, will now seek “substantial” damages, said attorney Ben Reznik.

“This was the biggest waste of taxpayer money, because it’s such a frivolous action by the council,” he said Wednesday. “They had to hire outside counsel because their own city attorney was telling them they were violating the law.”

Reznik, a lobbyist with dozens of City Hall clients, said the council had already approved a tract map and environmental impact report for his client’s project. He accused Councilman Jose Huizar of blocking the work in an effort to placate constituents who wanted to see the hillside remain open space.

Huizar, whose district includes El Sereno, said in a statement that the fight to save Elephant Hill was “the right thing to do. . . . And while I’m disappointed to hear about the judge’s ruling, I am as committed as ever to protecting the safety of our hillside residents.”

Although he played a key role in the Elephant Hill case, Huizar issued a separate, seemingly unrelated news release Wednesday calling for greater oversight of the city’s legal expenses. “In these tough economic times . . . we simply cannot afford to keep throwing money at these unnecessary and extremely costly lawsuits,” the councilman said.

Reznik, in turn, said Huizar’s own actions spurred a costly lawsuit. “He created one, and that’s painful,” he said. “Taxpayers are going to bear the burden here.”


Opponents of the project received legal help from the Natural Resources Defense Council, an environmental group that said the 15.7-acre site should be preserved. The city’s environmental review found that grading would ultimately affect 85% of the site and result in an “irreversible environmental change to the topography,” according to court documents.

Nick Velasquez, spokesman for City Atty. Rocky Delgadillo, had no comment on the ruling. But a transcript included in the court file showed that Assistant City Atty. Susan Pfann disagreed with the environmental group’s legal arguments regarding Elephant Hill.

The group maintained that the permit sought by Monterey Hills Investors was a discretionary action, and therefore governed by the state’s environmental laws. Pfann told the council that she believed the permit was ministerial and not covered by those laws, according to the transcript.

Natural Resources Defense Council lawyer Tim Grabiel, who appeared in court in the El Sereno case, could not be reached for comment. Reznik said damages could rise considerably higher than $8 million because the city’s efforts caused his client to lose its financing.

“We may not be able to get a construction loan because the market has collapsed” since the council’s vote, he said.