Developer alleges city had violated state housing law when it scrapped project
Developer Republic Metropolitan has filed a claim against Santa Clara, alleging the city violated state housing laws and breached contracts when it quietly shelved plans for a mixeduse workforce and affordable housing project adjacent to El Camino Real.
Talks around the development — which was planned for a parcel owned by the city and the Santa Clara Valley Transportation Authority at 500 S. Benton St. — dates back several years, with Republic Metropolitan entering into an exclusive negotiating agreement with the city to develop the land in early 2018.
The 2.6 acre-lot is currently a parking lot situated between the CalTrain Station and Santa Clara University.
But Republic Metropolitan wanted to transform the land into a 240-unit development with 170-units of student and workforce housing and 70 affordable units. The project would have also included 12,000 square feet of retail and 32,670 square feet of recreational space.
In the claim, the developer states that it invested thousands of hours of work and more than $3.5 million to push the project forward despite several challenges with the site — including its positioning over a well.
However, that all came to a halt in October 2020 when the developer says the City Council met in closed session and voted to terminate the project for reasons the city never disclosed, the claim states. The council had voted two months earlier to extend the negotiating agreement with Republic Metropolitan.
The developer received the news when Assistant City Manager Ruth Mizobe Shikada sent a “curt” letter, stating the city had considered the negotiating agreement “to have ‘expired' in August, and therefore it had ‘directed staff to cease efforts' to advance the project.”
“First and foremost the developer obviously invested a lot in the project, but also they're really committed to providing affordable housing in Santa Clara,” said Ann Ravel, one of the lawyer's representing Republic Metropolitan. “In the middle of the night, they basically terminated it without ever discussing it with them.”
In a news release announcing the claim, James Dallal, a senior associate at Cotchett, Pitre & McCarthy — the law firm representing the developer — said Republic Metropolitan “alleges the city did in secret what they never could have achieved had they proceeded through proper channels.”
Joe Cotchett, a partner at Cotchett, Pitre & McCarthy, told this news organization that he has concerns over who the city met with behind closed doors about the project — especially in light of the news that the 49ers held 57 meetings in an eight month period with five members of the council.
“If they think the problems with the 49ers were problems, wait until they see this,” Cotchett said of the 162-page complaint.
The claim focuses on a few of the city's top players including recently fired City Attorney Brian Doyle, who the developer alleges “gave false and misleading legal advice and coordinated, orchestrated, and instigated an effort to undermine the REMET project.”
Aside from breaches in contracts and negotiations, Republic Metropolitan alleges that the city violated the California Housing Accountability Act “by failing in its obligation and responsibility to expand affordable housing opportunities for Californians, as expressly mandated by the state legislature.”
The allegations against Santa Clara comes just days after state Attorney General Rob Bonta announced a new strike force to ensure cities are following state housing laws. Cotchett believes Bonta's office should look into Republic Metropolitan's claims.
Santa Clara has 45 days to respond to the claim and settle matters. If they don't, the case will go to court.
A spokesperson for the city refused to comment.