Council denies developer’s appeal to build Village Lofts project

Denley Investments and Management looked to the Claremont City Council for a second chance to save the beleaguered Village Lofts project. It didn’t happen.

The council voted unanimously to deny the Los Angeles-based development firm’s appeal of the voidance of the project. The Village Lofts, a planned four-story mixed-use development with live-work lofts, parking, retail spaces and apartments, was set to be built north of First Street between Cornell and Oberlin Avenues, across the street from the Packing House. The architectural commission approved the plans in December 2012. 

Those plans now appear to be dead in the water. Then-Community Development Director Brian Desatnik issued the demand to void the architectural approvals in January 2017, citing unusually slow progress by the developer, and deemed the project wasn’t moving at a “commercially reasonable pace.”

Tuesday night’s meeting followed a meeting in May, where the planning commission unanimously denied Denley’s appeal of Mr. Desatnik’s decision to quash the plans. Denley appealed the planning commission’s decision on May 19.

The meeting was the culmination of a six-year saga between the developer and the city. Denley purchased the former Rich’s Products site in 2011 for $2.5 million, according to real estate records, and submitted an application of the development plan for review in April of that year.

After the Village Lofts plans were approved in December 2012, the city gave the company two years to develop the project.

In November 2014, Denley applied for a 90-day extension, which was granted in December of that year. Denley applied for a demolition permit in March 2015, just under the extension deadline. Rich’s was demolished in September 2015.

A year passed with no action, and in September 2016 the city met with Denley Vice President David Bolour to construct a temporary parking lot in the parcel, an idea that was ultimately rejected by the company. From November 2016 to January 2017 there were multiple attempts by the city to get in touch with Denley, with no response, the city alleges.

David Bolour took himself off the project on January 3, and after a month of apparent inaction from Denley, Mr. Desatnik ditched the project on January 30.

Denley general counsel Areg Sarkissian spoke on the development group’s behalf during Tuesday’s meeting. During his speech, he acknowledged personal and financial issues that contributed to the lack of movement on the project.

But Mr. Sarkissian also called out the city’s municipal code as being too vague, called into question the term “commercially reasonable pace,” accused the city of bias toward its own employees and lamented the notion that one person, the community development director, could end the project.

Ultimately, he said, he was here to ask for a second chance from the council.

“If it was to punish Denley Investment, you punished us. Right? Okay. Slap me on the hand and let’s move forward,” Mr. Sarkissian said.

He warned Denley had no plans to sell the property and would do nothing to the empty lot if the council denied their appeal, leading the lot to, “become an area where homeless people migrate in, for drugs to be coming in, and for sales of things we don’t even want to talk about.”

City Attorney Sonia Carvalho later responded that Denley would be responsible for maintaining the property within the city’s codes. She also disputed Mr. Sarkissian’s claims the code was too vague, noting it was “very clear” the code allowed the plans to be valid for two years.

Mr. Sarkissian also mentioned a $52 million loan Denley had acquired on June 23 as a way of showing the council they had the funds to build the project. Mr. Sarkissian also mentioned the loan during the May 15 planning commission meeting, noting they would be approved by the end of that week.

Councilmember Opanyi Nasiali jumped on that claim, asking when the development firm applied for the loan. Mr. Sarkissian replied Denley applied around March or April.

“The reason why I am asking that is, you had more than two years,” Mr. Nasiali said. “Why is [Denley] applying for it two or three months ago?”

“The funds for this project were used for a different project,” Mr. Sarkissian admitted, leading to confused looks from city staff and the council. “Because we weren’t going to sit and wait two years for the city of Claremont to make a decision.”

City Manager Tony Ramos presented a different series of events from what Mr. Sarkissian described. He noted there was a “large misconception from the developer’s perspective” that the city was responsible for providing a timeline for the project, and said the plug was pulled “as a last resort” when all entitlements had expired and he no longer had the authority to delay it.

“We like this project. We want to see it done. And nothing was being done,” Mr. Ramos said.

At times, the back-and-forth between Mr. Ramos and Mr. Sarkissian was heated. When Mr. Ramos motioned for him to step aside from the dais to let Principal Planner Chris Veirs speak, Mr. Sarkissian retorted, “You can say excuse me, you don’t have to move your hand.”

Mr. Veirs said the city tried to stay in regular contact with the developer for years before the plans were pulled.

“We don’t let this stuff sneak up on people and say ‘Sorry, you’re out of luck,’” he said.

The council was not swayed by Denley’s dilemma, with Councilmember Joe Lyons noting he “just can’t find any justification” for granting the developer’s appeal.

Councilmember Corey Calaycay noted that Denley “made the conscious decision” to divert funds from the Village Lofts to other projects, which is why he was denying the appeal. Mr. Nasiali wouldn’t accept Denley’s argument that it was the city’s responsibility to follow-up with the developer on a timeline.

Mayor Larry Schroeder remarked that Mr. Sarkissian may have misspoke when he mentioned the lot would remain undeveloped, noting that Denley would still have to maintain the property within city codes.

Councilmember Sam Pedroza said the project was “born with concessions,” in reference to the city’s changes in the municipal code to allow the four-story project to be built in the first place. He also appeared to be unmoved by Mr. Sarkissian’s claims that the lot would remain undeveloped.

“You’re going to provide the Packing House some great views of the mountains,” he said. “And for that, we thank you.”

—Matthew Bramlett


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