Accusing Oceanside's City Council of reneging on a commitment, a Riverside-based home builder has filed a $30-million lawsuit against the city in an effort to overturn an ordinance that goes into effect today.
Marlborough Development Corp.'s plan to build on 124 acres in eastern Oceanside were wiped away last month when the city voted to create a district that requires house lots to be large enough to accommodate horses.
The new district covers about 900 acres. It would reduce the Marlborough project from 260 houses to 150, leading to a loss of more than $15 million, according to the suit filed Wednesday in Vista Superior Court.
Marlborough has already spent $29.9 million on the project, which falls entirely within the new district, company Vice President Dorian Johnson said Thursday.
"Twenty-nine million dollars represents real costs. . . . This is not an imaginary figure that we feel we have been put out," Johnson said.
The suit lists costs including $11.8 million for public improvements, $2.2 million in bonds the corporation says are irrevocably committed and $2.5 million in interest.
The corporation was just one step away from breaking ground, having yet to pull building permits. As late as March, the city approved a final map on nearly 80% of the project, city planning officials said.
The city had already approved a tentative map and development plan, granted a conditional-use permit and general-plan variance, exempted the project from Oceanside's growth-management plan and issued a grading permit, according to the suit and city planners.
"There are many issues here that the city just swept aside in their haste to implement this" district, Johnson said.
Johnson said the new ordinance is more restrictive than the general plan and "throws (Oceanside's) housing element out of kilter."
But City Councilwoman Nancy York, who sided with council members Melba Bishop and Don Rodee in a 3-2 vote supporting the ordinance, said, "It's absolutely outrageous, the chutzpah of these folks."
"Oceanside is not going to continue rolling over for developers," York said.
She said the district is intended to maintain a rural atmosphere that has been fast disappearing.
The ordinance requires that lots have sufficient space for the care of horses, stipulating that 7,200 square feet be set aside on each lot for a horse yard area, as well as trails and nature paths. Currently, the area is surrounded by a mixture of condominiums, single-family homes and homes on large lots.
York agreed that the ordinance cuts down on the number of buildings, but argued that the properties would be more valuable and thus the developer would not lose money.
"This (ordinance) does not in any way reduce the value of their land. It is setting things right and is something that should have been in place a long time ago," she said.
In public hearings on the new district in August, Interim City Attorney Daniel Hentschke advised the council that "a court could find application (of the ordinance on Marlborough) was unfair and inappropriate," according to the 57-page suit.
In another public hearing last month, according to the suit, Hentschke again advised the council that a large part of Marlborough's project should be exempted.
"I did, at the public meeting, indicate that there were certain risks involved. I had recommended that Marlborough be excluded" from the district, Hentschke said Thursday.
"I did explain the risks to the City Council, and the council made a decision that they believe was in the best interests of the people of Oceanside," he said.
The council's slow-growth majority of Bishop, York and Rodee overrode the objections of the minority of Mayor Larry Bagley and Samuel Williamson in adopting the ordinance.