Chihuahuas in the Microwave

SUPERSIZE THIS: Should I get a notice that my
water bill’s a couple months past due and they’re thinking about
shutting off my spigot, my palms would sweat, my eyes would twitch,
and I would go into gastrointestinal overdrive.
But when developer Bill Levy is notified by his
lender that he has defaulted on his $35 million loan — $10 million
of which is the interest that accrued in just one year — he’s cool
as a cucumber. That money was due, by the way, in July. Say what
you want about Bad Boy Bill, the man is pucker
proof
. For those tuning in late, Levy is attempting to
transform the portion of lowest State Street — around the
Californian Hotel — into a beehive of Ritz-Carlton time-share
condos, each fetching a modest $350,000 per three-week use. In his
own ingenious and determined way, Levy’s been pursuing this
Levytown dream for more than 30 years. But now
that he’s at the finish line, it will all be snatched away, barring
divine intervention. Talk about your karmic comeuppance. Levy’s
been abusing investors for years, and it’s biting him on the ass. I
suspect this is one of the reasons he’s had such an impossible time
securing financing on this project, which everyone says is a
surefire money-maker. According to his permits with City Hall, Levy
has until December 12 to break ground, begin construction, and get
his $200 million show on the road. And without financing, he can’t
meet this deadline. Unless someone buys him out, the project is
dead in the water. Frankly, that would suit me just fine. I never
liked it in the first place.

Around City Hall, there are a number of councilmembers who feel
the same way. The question, of course, is what happens afterwards.
Chances are, lots of litigation. In the meantime, one idea put
forward by City Councilmember Helene Schneider is
that maybe Levy’s land could be used as a “receptor site” in a
complex scheme known as Transfer of Development Rights, aka
TDR. Among eco-minded policy wonks, TDR has become
the hot, sexy buzz word du jour. The idea is that the
development of big beautiful open spaces along the Gaviota
Coast — like Naples, for example — might be
prevented outright or minimized by transferring their owners’
development rights to some more suitable urbanized location, such
as lower State Street. In the abstract, it’s an incredibly cool
concept, a psychological salve that offers hope, however dim, that
Gaviota won’t soon be gobbled up by mega mansions, Tudor castles,
and other architectural delusions of grandeur. To
that end, the City Council quietly appropriated $15,000 Tuesday to
pay for part of a $45,000 new study about TDR, and how they might
save Naples from a fate worse than Ritz-Carlton condos. The county
supes kicked in $15,000 and so did Matt Osgood,
the Orange County developer who wants to build a few dozen
tastefully overwrought estates at Naples.

The trick is finding socially acceptable receptor sites. As soon
as you start getting down to specifics, the trouble starts.
Wherever and whatever it is, somebody’s not going to like it. Thus
far, the City of Santa Barbara has proven the most receptive to the
idea. But everyone agrees this scheme can’t work if the City of
Santa Barbara is the only player. Goleta? Somehow I can’t see the
good people of the Good Land rushing forward with
open arms. NIMBYs there are in a state of
perpetual revolt and, last I looked, they deport people for
installing backyard clothes lines. The real issue, of course, is
the d-word. That stands for density. Many of us,
myself included, have warmly embraced the concept that increased
urban densities are essential — desirable even — if we ever hope to
see anything affordable produced on the South Coast again. It’s
when it involves our own neighborhoods that we all turn into
screaming NIMBYs. The d-word is animating many debates that on
their surface seem to be about other matters entirely. For example,
the kooky revolt against those mini-roundabouts — highly functional
despite obvious aesthetic shortcomings — is inspired by an almost
paranoid conviction that they’re part of a smart-growth conspiracy
concocted by City Hall to cram higher residential densities down
our collective throats.

One of the problems confronting those of us subscribing to
so-called smart-growth notions is that too often we allow increased
densities without getting much, if any, affordability.
Million-dollar condos are chewing up residential neighborhoods on
the East and West sides. These new products may be darling and
delicious, but not to a whole lot of families they’re displacing in
the process. Thus far, City Hall has not seen fit to get a grip on
this problem. In the last five years, 171 duplexes or apartment
houses have been proposed or approved for demolition to make way
for new condos. Some have already been torn down. And some have
been the victims of the two-step flimflam. That’s
when developers obtain permits to demolish existing rentals on the
pretext of building new apartments, but then decide to build condos
instead. This dodge has become popular because the regulatory
oversight involved with apartment-to-apartment projects is
significantly less cumbersome than converting apartments to condos.
The loophole should be fairly simple to plug. Let’s hope the
council doesn’t wait until it gets around to amending the city’s
General Plan several years hence to do so. And of course, none of
these numbers include all the condo conversions that involve no
demolition. Councilmember Das Williams made a
great point about all this at a recent council meeting. If
neighborhoods are being asked to suck it up and accept higher
densities all in the name of increased affordability, Williams
warned, City Hall and the powers that be will undermine what
limited credibility they possess by allowing the wholesale
destruction of existing rental housing, which happens to be among
the most affordable housing we have. Until the council figures this
out, people will have every reason to be suspicious whenever the
d-word comes into play. Until that changes, we can kiss a
castle-free Gaviota goodbye.  — Nick
Welsh

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