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Waiver applicant pitches restrictive covenant with themselves

Thursday, December 15, 2016 by Joseph Caterine

The Planning Commission voted 7-4 at its Dec. 13 meeting to postpone a decision on a compatibility waiver for a new multifamily residential development called the Lofts at 12th, located at 2724 East 12th St.

The waiver would accommodate the five-story apartment complex by allowing the developer to scale down a 25-foot setback triggered by single-family zoning to 5 feet on the west side of the property.

Commissioner Trinity White, who lives a couple of blocks away from the property, said she was part of the conversation back in 2011 when a different owner successfully applied for a zoning change. She regretted that the original promises for 40 percent affordable housing had been dropped to 20 percent by the new developer, Shravan Parsi, and that the property would no longer connect to the Transit Oriented Development via a walkable route.

White said that if a restrictive covenant had been signed then, it would be a different story. “We wouldn’t even be having this conversation right now if it had been properly vetted during the zoning case,” she said.

However, when White asked the owner’s representative, Michele Lynch of MetCalfe, Wolff, Stuart & Williams LLP, to present the restrictive covenant currently on the table, which promises to construct a memorial to the property’s former use as Emancipation Park, it slowly became clear that something was amiss.

“Who is the agreement with?” White asked.

“The agreement is with no one, because we didn’t have the support for anyone else to sign it,” Lynch responded.

White continued, “If it’s a restrictive covenant with yourself, who would take legal action?”

Lynch clarified that language had been added to the covenant to make it hold as long as the site plan remains valid. White pushed further.

“I’m asking what are the legal ramifications for you if you didn’t uphold that restrictive covenant?” she said.

After a pause, Lynch responded, “Well, I guess the neighborhood could sue me.”

Commissioner Chito Vela agreed with White that a counterparty is necessary for a restrictive covenant. Lynch said that it’s not ideal, but covenants without counterparties do exist.

“Who enforces it?” Vela asked.

“If we violate (the covenant),” Lynch said, “then we can be sued. It doesn’t prevent someone from trying to sue us.”

“A restrictive covenant with yourself is a promise to yourself, and is thus unenforceable under state law,” Vela said.

Assistant City Attorney David Sorola confirmed Vela’s conjecture. “You have to have two distinct parties to make a binding contract,” he said.

Commissioner Nuria Zaragoza wondered aloud if a neighborhood representative might sign it at the meeting. “That would take care of the issue,” she said.

Cavan Merski, chair of the Chestnut Neighborhood Plan & Contact Team, said that the neighborhood was unwilling to sign the covenant until the affordability and connectivity components were added back.

“I’m not going to sign something I think is lacking before a decision is made on the waiver,” he said.

White made a motion to postpone until the Planning Commission’s January meeting in order to allow more time for negotiations, and Vela seconded. The motion passed with commissioners Patricia Seeger, Michael Wilson, James Schissler, and Zaragoza dissenting. Commissioners Angela Pineyro De Hoyos and Tom Nuckols were absent.

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