Litigation is now clearly playing a pivotal role within Woodland’s community planning with regard to commercial zoning.

A year ago, city approval of Paul Petrovich’s Gateway 2 commercial project attracted a lawsuit that, although losing on the local level, is still viable for an appeal.

Breathtakingly brazen, Petrovich has now swiftly squashed the City’s recently approved (24 acre) mixed-commercial-use auto mall project (where two Woodland dealerships: Hoblit and Woodland Motors) intended to soon make their home), through several surrogates instigating litigation to challenge the propriety of its environmental and planning processes.

This mixed-use auto mall project was to be created by Sacramento-based Panattoni Development Company, a very large and prestigious firm with an international presence ( http://www.panattoni.com ).

An attorney otherwise working for Petrovich, Steve Herum of Stockton, filed a petition for writ of mandate against the Panattoni project under the California Environmental Quality Act (CEQA) and state and local law, on behalf of Citizens for Urban Renewal (CUR), whose only publicly known member is prominent downtown business owner, Al Eby.

In quick reaction, at its initial regular meeting of August 21, the new Woodland City Council — without comment — rescinded all of its recently granted approvals for the Panattoni project, back-tracking on the previous Council’s rejection of a June 19 appeal by CUR against the project.

According to related city staff reports, Panattoni has refused to indemnify the city for these litigation expenses connected to its project (a conventional arrangement), directly resulting in this city council action rescinding project approvals.

As noted further below, there potentially may exist a long-term strategy by the city and Panattoni to simply extinguish the major basis for CUR’s lawsuit by preparing and certifying an Environmental Impact Report (EIR) under CEQA for this project.

In any case, the planning landscape displayed below plainly represents an incoherent community zoning scenario, impelled by alternating and confused municiapal priorities, fruit of failed city council management of such key policy.

____  Setting Of CUR Lawsuit  ____

CUR’s legal petition is largely based on arguments against the city council decision to proceed with this project without preparing and circulating an EIR, since it is located with city limits and is fairly limited in scope and impacts, while working within established municipal zoning.

This Panattoni project includes a modicum of mixed office and retail uses, alongside the two large auto dealerships, because of a mixed-use type of zoning requirement in the city’s General Plan. Stand-alone auto dealerships in the area of the project would be inconsistent with the General Plan; hence, inclusion of some mixed commercial uses were essential to further this basic auto mall project.

By contrast, Petrovich’s (original) Gateway 2 project (mentioned multiple times in CUR’s petition) was enormous, about seven times the size of this Panattoni project and strongly cast as an inherently regional-retail hub, necessitating multiple re-zonings, with tax-sharing agreements and a large annexation of land from within the county.

A sign of how peeved is Petrovich, about alleged unfairness related to city approval of Panattoni’s project, appeared at the relevant city council meeting.

During the June 19 appeal by CUR to the city council — as a stunt reflecting Petrovich’s personal testimony (for twenty minutes) before the Planning Commission on this item — an agent of Petrovich wheeled-up beside the public podium a stack of paper several feet high, claimed to be all of the environmental documents needed for Gateway 2, as if it and the Panattoni project were at all similar.

The mayor pleaded with Petrovich’s agent to leave behind this stunt’s wheel-cart, used to convey this great mass of paper into city custody, but this request was refused and the wheel-cart departed.

Knowledgeable sources indicate that an EIR for the Panattoni project would likely cost the firm about $150,000 and have taken about nine months to produce. Instead — the city issued a Mitigated Negative Declaration (MND) under CEQA, in lieu of an EIR.

Largely, this decision to issue an MND is the predicate for CUR’s petition, although another aspect challenges the project under state and local law.

____  Details Of CUR Lawsuit  ____

CUR’s petition alleges prejudicial abuse of discretion by city council approval of the Panattoni project on two separate grounds. Its first cause of action involves three basic contentions regarding issuance of an MND, rather than an EIR. Its second cause of action alleges violation of state and local law (centered on the General Plan).

CEQA requires that if a — “fair argument” supported by substantial information — is duly presented, indicating significant environmental impacts of a project which have not been sufficiently identified, analyzed and mitigated, an EIR must be done, even if substantial information exists to the contrary.

CUR alleges three such environmental impacts: urban decay, air pollution and health effects, and global warming and climate change. It supports these allegations with various studies and reports, in addition to relevant testimony within municipal process.

One report draws comparison between the Panattoni project and the Gateway 2 project, arguing that findings of urban decay associated with Gateway 2 make — “surprising” — city acceptance of an MND for the Panattoni project.

CUR’s petition asserts that the city failed to recognize, consider or mitigate the “cumulative impacts” of urban decay resulting from approving the Panattoni project — following its approval of Gateway 2.

Commercial vacancy dynamics in Woodland are indeed so chronically serious, verging on intractable, that Gateway 2 approval by the city council was sued over this issue (and this lawsuit may persist on appeal).

Air quality impacts and consequent health effects are also significant enough, according to CUR, to necessitate mitigation established through an EIR process. Associated greenhouse gas emissions related to the Panattoni project are alleged in detail to be significant, despite limited mitigation performed within the MND. “Feasible mitigation measures” exist, which were ignored by the MND, claims CUR’s petition. A referenced report, states CUR, “presented substantial evidence that the [Panattoni) Project’s cumulative effects, when combined with Woodland Gateway Phase II Project would be significant and unavoidable.”

____  Urban Decay Or Urban Renewal?  ____

Will the Panattoni project cause urban decay?

Neither auto dealership relocation makes vacant an urban site of any real significance in this context. Woodland Motors leaves a spot on far East Main Street near a freeway interchange, at the fringe of the urbanized area, far outside the downtown – moving about a mile to another nearby, urbanizing freeway interchange.

These two locations of Woodland Motors are reasonably similar with regard to urban (decay) relevance.

Hoblit’s dealership — forced a year ago in a rent dispute with Petrovich to move to Woodland Motor’s former site on the western edge of downtown — is now occupying a building planned for demolition due to structural inadequacy and absence of genuine historical significance, hardly a source of permanent value to the downtown. The only reason this building is occupied is that Hoblit needed somewhere to move.

In fact, municipal policy has long been to encourage relocation of auto dealerships to the city’s periphery, because vast parking lots filled-up with their inventories are obviously not the “highest and best use” of quite finite downtown land.

The real issue here is not urban decay, but rather: urban renewal.

Urban renewal is furthered by the Panattoni project, consistent with existing city policies.

What legitimate objections to this project remain? A modicum of retail uses and a few restaurants which will not appear for several, perhaps many years. City staff indicates that although 80,000 square feet of office uses are included, only about 10,000 square feet of incidental retail space is involved in this project.

On balance, the Panattoni Project serves the best interests of Woodland’s downtown, since if offers urban renewal through relocation of one of its two remaining auto dealerships. Modestly designed retail uses and a few restaurant opportunities certainly don’t outweigh the long-sought benefits of downtown urban renewal which the Panattoni project represents.

What are air pollution and greenhouse gas impacts in context with this benefit of urban renewal? Will it matter in these terms precisely where these two auto dealerships eventually land? Likely, only to the extent that their former sites are soon significantly redeveloped, so that cumulative square footage of commercial space becomes a factor.

Is it worth $150,000 for an EIR to carefully evaluate this planning trajectory or consider in detail the impacts of a truly, relatively minor amount of incidental commercial use – in the context and balance of the urban renewal offered by Panattoni’s project?

In a word, No.

But because of Petrovich’s desire to wield supreme authority over new commercial zoning in Woodland, such a waste of resources has apparently become essential.

Who is really benefitted by CUR’s lawsuit against the Panattoni project, and why?

Petrovich — because he believes this legal action is in his self interest, not because of his deep concern about the public interest.

____  Legal Claim Aims At Monopolizing Auto Mall Zoning  ____

Importantly, this lawsuit also contains a claim supported by a planning study connected with Gateway 2 — that relocation of auto dealerships — anywhere other than within Petrovich’s Gateway 2 project (approved a year ago) — has now become a violation of the city’s General Plan.

Ironically (in terms of huge Gateway 2 impacts along these lines), CUR’s petition includes reference to Policy 1.E.1 of the General Plan, “that the City shall strive to avoid creating an oversupply of commercially designated land to prevent the dilution or deterioration of currently viable commercial areas.”

The petition continues: “The ‘Staubach Study’ prepared by Woodland as part of the Gateway 2 project EIR found that no additional land would be needed for auto dealerships. [Combined with another report,] Woodland’s approval of the [Panattoni] Project fails to satisfy this mandatory requirement of the General Plan and therefore creates an inconsistency between the Project and the General Plan.”

Such a legal claim gives rise to the potential municipal predicament of perpetual loss of a significant portion (many millions of dollars over time) of (currently received) sales tax revenue.

Auto mall zoning at Gateway 2 requires a yet to be negotiated annexation and tax-sharing agreement with Yolo County; whereas, the Panattoni auto mall project would be located within existing city boundaries, thus preserving the status quo flow of sales tax revenue from these auto dealerships into city coffers.

Several reliable sources familiar with commercial zoning in the city have expressed growing concerns that — after receiving key municipal cooperation regarding his determination to not produce a (deserved) recirculation of the EIR for his Gateway 2 project (the subject of another CEQA lawsuit) — Petrovich has now launched a legal offensive to contest against any competition (especially for an auto mall), attempting to essentially monopolize new commercial zoning within this community.

In response to previous CEQA litigation over Gateway 2, the city recently asserted that it did not possess authority: “to distribute of control the distribution of commercial potential” within its boundaries, a blatant and quite curious abdication of the basic concept of civic zoning.

Absent due recognition and diligent use of the “police power” inherent in community zoning ordinances and state environmental laws, whichever developer possesses the most local political power rules the roost.

Seemingly, it is to this absurd level that Woodland’s community development has devolved. A local wag, when informed about these circumstances, abruptly referred to the City as becoming: “Petrovichville.”

____  Historical Auto Mall Context  ____

A decade or so ago, an auto mall was initially zoned for the land which has since become the Gateway Center (Costco, Target, etc.). But soon after Petrovich acquired this property, zoning was altered to allow present uses, abandoning this intended space to relocate auto dealerships for purposes of making available key downtown land for more intensive uses.

Although the public was largely left out of this (planning policy) loop of information, it can now be perceived that Petrovich was intending to expand his existing peripheral commercial park with Gateway 2 and then attempt to lure these auto dealerships into it.

A compound advantage toward this goal, a few years later fell into Petrovich’s grasp, when Lonny Pritchard sold him the Electric Garage building — location of Hoblit’s auto dealership.

The underlying plan within city hall was to have Petrovich eventually demolish Electric Garage and construct a cineplex upon this site, throwing aside long-held community plans to renovate and expand State Theatre (1937, Art Deco style) and installing an “entertainment district” within only half of the downtown area, that portion proximate to his new cineplex.

No form of analysis or justification, whatsoever, appears within municipal documents which prioritized completion of Petrovich’s “Cinema Square” project and advanced consideration of such a perversely drawn “entertainment district,” comprising only half of the downtown area.

Also, the historical significance of Electric Garage is curiously overlooked in these municipal processes, despite its being the first source of motor vehicles in Yolo County, continuously in use since the early 20th Century.

Of course, attention / reference to the historical stature of Electric Garage would surely become inconvenient for Petrovich’s purposes, and it was excised from relevant municipal documents / policies.

After Hoblit declined to cooperate with Petrovich’s arrangements to ultimately relocate his dealership into a — no-freeway-exposure — site within Gateway 2, and his existing lease under Pritchard’s ownership expired — Petrovich retaliated by refusing to grant Hoblit a new lease, leaving his dealership in a month-to-month tenancy for about five years, then finally evicting him through court process in July of 2011 for non-satisfaction of a monthly rent increase ($5,500 to $10,000).

Petrovich threatened in late 2010 to raise Hoblit’s monthly rent to $25,000, unless the city relented in its demands for satisfaction of certain financial and construction elements of the Gateway Center Development Agreement. The city relented.

City hall sources indicate that just prior to the filing of CUR’s lawsuit, Petrovich invited Hoblit to return to Electric Garage (vacant since the eviction), disconnected to any eventual location of his dealership at Gateway 2.  Hoblit declined.

____  The Other CEQA Lawsuit  ____

On July 16, 2012, Yolo Superior Court Judge, Daniel Maguire, denied a petition for writ of mandate by California Clean Energy Committee (CCEC), to void city approvals related to Petrovich’s Gateway 2 project, on the basis of various alleged violations of CEQA.

Petrovich’s attorney in that legal action is Steve Herum of Stockton, the same counsel as represents CUR against the city, and who will be collecting attorney fees and costs from Panattoni for the brief extent of this other legal action squashing municipal approvals of its project.

CCEC has 60 days from the date of Judge Maguire’s denial, during which to file an appeal with the Third District State Appellate Court. There are subtle indications that this appeal will be timely filed.

If CCEC were to be successful on appeal of Judge Maguire’s denial (indeed, a most perfunctory document, entirely devoid of any detailed examinations, analyses or explanations, and thereby precisely the nature of ruling most subject to appellate review), Petrovich’s Gateway 2 project would become evaporated back to square-one, with preparation and circulation of a relevant EIR, just as Panattoni’s project may soon do.

____  City, Panattoni To Cooperate With EIR?  ____

Experienced sources say Petrovich / CUR will likely sue any mixed-use auto mall project by Panattoni, despite whether an EIR has accomplished.

However, the available range of valid legal challenge may be much more limited in that case, perhaps to only some claim (noted above) that Gateway 2 approvals, in the context of related planning studies, fully exhaust the auto mall capacity of commercial zoning under the General Plan of Woodland.

Despite this prospect of litigation, millions of sales tax dollars hang in the balance of where these auto dealerships eventually land.

Such a key realization seemingly didn’t play a role in (split-vote) city council decision-making that approved Petrovich’s auto mall plans for Gateway 2, perhaps because he hadn’t had a reason to yet reveal his plans to legally strong-arm these auto dealerships into submission.

In previous statements to Yolo Sun, Hoblit has indicated that he will absolutely never relocate his dealership into Gateway 2, for a variety of solid reasons.

Permanently locating at his present site, the former site of Woodland Motors, would require permission of the property owner(s), Ron Caceres, etc., as well as performance of a conditional use permit process which would demand numerous improvements to the building and site.

Hoblit has only temporarily (for two years) been allowed to occupy his present site, for reason of municipal liability relating to the structural condition of these premises.

Panattoni’s project being dead or stalled forces Hoblit to approach the city for at least an extension of the time period that his business is permitted to operate at its present site, if not for a full-blown process to grant a conditional use permit for permanent location.

Hoblit has to decide within a year what path to take — appeal for an extension of time until Panattoni’s project might be secured and constructed, or elicit an agreement with owners of his present site to enter a conditional use permit process to secure and improve it as a permanent home for his dealership.

Or, Hoblit could just leave town when his time limit expires.

Connected to these circumstances is the clear potential for the city to soon persuade Panattoni to proceed with an EIR for its project, perhaps even by sharing the cost (~$150,000), based upon salient municipal interest in best avoiding the loss of millions of dollars of currently flowing sales tax revenue.

City manager Paul Navazio, indicates in this regard that retaining Woodland’s stable of legacy auto dealerships is a very strong concern, stating that:  “[W]e have considered the notion that – under the right circumstances – it may be worthwhile for the city to invest in helping advance whatever plan we believe works best for the community – provided that we can demonstrate a positive return on our investment….this concept is not to be dismissed.”