Developers of Eight-Story Building Behind Mission Sue State, City of Santa Barbara

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This article was underwritten in part by the Mickey Flacks Journalism Fund for Social Justice, a proud, innovative supporter of local news. To make a contribution go to sbcan.org/journalism_fund.

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The development team that’s proposing to build an eight-story apartment building behind the Santa Barbara Mission filed a lawsuit against the State of California and the City of Santa Barbara on October 24 in federal court. The lawsuit alleges that the state trailer bill that passed last month, Senate Bill 158, illegally singles out the Mission LLC’s project by requiring it to undergo environmental review. It also alleges that the city’s housing element is noncompliant.

In June, state lawmakers voted to pass a bill that made major reforms to California’s environmental review process (CEQA). The reforms exempt many housing projects that include affordable units and are in urban areas from environmental review.

In September, Senator Monique Limón, who represents Santa Barbara County as well as parts of Ventura and San Luis Obispo counties, made changes to that law, including specifications that “de-exempt” housing projects in certain-sized cities within certain-sized counties, and with specific properties. Those properties include: being located in a city with a population between 85,000 and 95,000 within a county with a population between 440,000 and 455,000, at the time of the 2020 census. It must be on a parcel four acres or larger, filed under the state housing provision “builder’s remedy” and including FEMA-ID-ed floodways and Fish and Wildlife–labeled wetland. It also must be adjacent to a state historic landmark. Those specifications, the lawsuit said, only seem to apply to the project behind the Mission.

Senator Limón has said that she provided broad feedback to the CEQA-exemption legislation, including tribal consultation, habitat definition for protected species, and advanced manufacturing. This week, she said in a statement to the Independent that she is aware of the lawsuit challenging SB 158 and that Attorney General Bonta typically handles challenges to state law.

The project in question would sit on a nearly five-acre sloping property at 505 East Los Olivos Street. That land has high erosion and landslide potential, according to planning documents from the City of Santa Barbara. The city has identified the site as within an area with several archaeological resources, from prehistoric sites to Mission-era archaeology. The state has identified the area as being in a “very high fire hazard severity zone” and locals have raised questions about evacuation procedures onto the two-lane East Los Olivos Street.

Environmental review for the project would include studies of the land, the project’s impact on transportation, and archaeological studies.

The City of Santa Barbara sent a letter to the Mission LLC in July, before SB 158, saying the project behind the Mission wasn’t exempt from environmental review because it does not comply with the city’s general plan and zoning and does not satisfy several environmental criteria it needs to.      

Along with alleging that the law violates the equal protection clause of the 14th Amendment in both the U.S. and California constitutions, the Mission LLC’s lawsuit said that the City of Santa Barbara’s state-certified housing plan, called a housing element, is noncompliant. 

Why? The lawsuit argues that Santa Barbara uses “zoning overlays” to meet its regional housing requirements. Late last month, the Second District Court of Appeals ruled that the coastal City of Redondo Beach did not have a compliant housing element because it used residential zoning overlays in commercial and industrial areas, which underlying zoning does not allow for any residential units. Those zoning overlays were used to complete the city’s housing element to state standards.

Judging Santa Barbara’s housing element invalid would open up the path for more builder’s remedy projects — projects where a developer could bypass zoning laws as long as their housing project includes a portion of affordable units.

The City of Santa Barbara said in a statement to the Independent that it had not yet been served the lawsuit and did not have a comment. The Mission LLC did not respond to a request for comment for this story. 

This lawsuit adds to The Mission LLC’s list of litigation. In May, The Mission LLC alleged in a separate lawsuit against the City of Santa Barbara that the city illegally found the fourth submission of the apartment project’s plans incomplete.

A July lawsuit against the County of Santa Barbara alleges that because the Mission LLC rents to a religious organization, they should not have to pay property taxes. That organization, the Unitarian Universalist Mission, has connections to the Mission LLC itself. State documents show that the organization’s CEO and CFO are Craig and Stephanie Smith, respectively. The Smiths are connected to The Mission LLC’s Chief Operating Officer, Ben Eilenberg, via another builder’s remedy project on Grand Avenue. All three are on a website for a company called Industrial Partners Group, although Eilenberg’s profile has been obscured in white text. 

Currently, the Mission LLC owes approximately $293,000 in property taxes on 505 East Los Olivos, the property behind the Mission. They have not paid taxes on the property since 2022.Stephanie Smith has been involved with another lawsuit involving a state entity — the California Coastal Commission. In 2020, Smith, acting as Trustee of the Lovely Family Trust, was plaintiff in a lawsuit against the California Coastal Commission after the commission denied the trust’s application to demolish a 2,634-square-foot single family home and build an approximately 20,000-square-foot residential compound. According to a staff report from the Coastal Commission, that site had a history of landslides. In a court document from December 2022, the Second District Court of Appeals upheld an earlier trial court decision, which sided with the Coastal Commission.