County of Santa Barbara Hits Snag in Mission LLC’s Lawsuit Seeking Tax Exemption on Religious Grounds

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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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Whether the developers of a proposed housing project behind Santa Barbara’s Mission qualify for a property tax exemption remains undecided by Santa Barbara’s Superior Court. Judge Thomas Anderle ruled that Santa Barbara County’s motion for judgement on the case’s pleadings was procedurally defective and deficient on Wednesday, but left the door open for the county to file again. 

On June 4, 2025, the Mission LLC, alongside a religious organization called the Unitarian Universalist Mission, filed a lawsuit against Santa Barbara County alleging that the Mission LLC did not have to pay its property taxes on the site because it rents to a religious institution. 

The Mission LLC is the company that owns the five-acre property at 505 East Los Olivos Street behind the mission, where it is proposing a controversial eight-story housing project under state housing provision builder’s remedy. Real estate advisor Ben Eilenberg is listed as the Mission LLC’s manager in state filing documents. 

Eilenberg’s signature also appears on the Unitarian Universalist Mission’s state filing document from January 2023. On other state documents for the nonprofit, Craig and Stephanie Smith, a development team spearheading the builder’s remedy project at 1609 Grand Avenue alongside Eilenberg, are listed as the CEO and CFO of Unitarian Universalist Mission, respectively. Craig Smith has also signed later filing documents for the church. 

The county argued, first in a July 2025 response to the complaint and then in an amended response dated September 2025, that the Mission LLC was unable to claim the tax exemption because the property was “not utilized exclusively for religious worship or related religious activities.” It also said, alongside more than a dozen other arguments, that the Mission LLC did not submit a timely claim for exemption. 

In April, the county filed for a judgment on the pleadings — that’s when a judge makes a decision about the case before trial. The county also filed statements from two individuals who work in the county’s Clerk-Recorder-Assessor’s Office. 

In July, the Mission LLC argued that the county did not include the two statements in the pleading and that it wasn’t a proper motion. Shortly thereafter, the county withdrew the statements. 

As for the lawsuit, Judge Anderle ruled on August 5 that the county had made several mistakes in filing the judgment motion. 

In his August 5 ruling, Anderle said that the county had not included the required “written notice stating the nature of the order sought, the grounds upon which that motion [was] made, or the papers upon which it [was] based.” In other words, the county’s order was missing key information at its start. 

Further, Anderle said the county doesn’t make clear how the affidavit statements from the Clerk-Recorder-Assessor’s Office employees are relevant to the argument the county is making. Anderle also said the county did not give the Mission LLC and the Unitarian Universalist Mission time to respond to the county’s withdrawal of those statements. 

Finally, Anderle said that the county had failed to file documents saying that they had either met with the Mission LLC and the Unitarian Universalist Mission and failed to reach an agreement or that the two organizations had failed to respond to the county’s request to meet. 

Because of these issues, among other technical problems, the case will continue into January 2027. 

The property at 505 East Los Olivos has a longstanding history with different religious organizations. The Sisters of the Holy Nativity, an Episcopal religious order, took over the property in 1952. The Sisters transferred the property to their brother monks, the Episcopalian Brothers of the Order of the Holy Cross, in 2013. The Mission LLC’s owners purchased the property in 2021, after the monastery closed permanently. 

A website exists for a religious organization at the address, the Unitarian Universalist Sanctuary. The Wayback Machine, an internet archiving tool that crawls the internet and documents the history of webpages, captured its first screenshots of the site on April 19, 2024. 

The website itself has the Mission LLC’s Los Olivos address at the bottom. It is incomplete. Its blog page includes a text box that says “I’m a paragraph. Click here to add your own text and edit me. Let your users get to know you.” The website has no posts. Its social media links bring a user to the page for Wix, a website creation tool. 

This case is not the Mission LLC’s only lawsuit. The company sued the City of Santa Barbara in October 2024 over how the city had handled the housing project. That case was dismissed without prejudice. The Mission LLC sued the city again in May 2025 in another suit over how the city had handled the project, alleging that the city was violating state law; the next court date for that case is September 2. 

The Mission LLC also sued the State of California alongside Santa Barbara County in federal court last fall. That suit alleged that a state law illegally targeted the Mission LLC’s project. It said the city did not have a compliant housing element. A federal judge dismissed the case in June but left the door open for the developers to amend their complaint, which they did that same month.

The Mission LLC’s Ben Eilenberg declined a request for comment, citing ongoing litigation. Santa Barbara County did not provide a request for comment in time for this story.