Glendale, Calif., Risks $34M Fine After Rejecting Housing Redevelopment

A Southern California city has rejected a plan to redevelop a former Sears property into a mixed-use complex, despite warnings that doing so could result in litigation and fines. 

Glendale City Council earlier this week voted 4-1 to reject Trammell Crow Residential’s (TCR) project at 236 North Central Avenue, which called for 682 residential units — including 72 low-income units — as well as roughly 1,500 square feet of commercial space. TCR was also planning to set aside a portion of the site to redevelop as a park, according to Urbanize, which first reported the news. 

The project was poised to take advantage of AB 130, a California state housing law passed in the midst of the redevelopment’s environmental impact review earlier this year. The law, which streamlines certain housing approvals, exempted TCR’s project from further California Environmental Quality Act (CEQA) review, and imposed a deadline for the Glendale City Council to formally approve or reject it. 

The City Council ultimately denied the project due to supposed design concerns, despite clear caution from the city’s attorney that the council had not made adequate findings for denial under AB 130. The consequences of denial could result in legal challenges and ultimately “draconian financial penalties,” the attorney said, of $10,000 per unit, with a 5x multiplier if a court determines the denial occurred in “bad faith.” That means that the city could ultimately receive a fine of more than $34 million. 

Glendale Mayor Ara Najarian was the lone dissenting vote, warning of the legal consequences and potential decertification of the city’s state-mandated housing element. TCR’s attorney added that a lawsuit was likely, describing the situation as a “slam-dunk” due to the city not properly rejecting the project under state law. 

The council could ultimately decide to reconsider the project at a later date. 

“This is not a Glendale-only issue, it’s a statewide mandate. … AB 130 prevents cities from shaping projects in ways that reflect local community values,” Najarian said in a statement in September. “While we continue to advocate for local control, we must comply with the law to protect Glendale taxpayers from costly litigation and penalties.”

Najarian and City Attorney Michael Garcia declined to comment, and a spokesperson for TCR did not immediately respond to for comment.

Nick Trombola can be reached at ntrombola@commercialobserver.com.