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Los Angeles

WSC lists three builder’s remedy-approved sites in Santa Monica

Firm filed plans while city was out of compliance with state housing agency last month

From left: Neil Shekhter and WSC Communities' Scott Walter with 2901 Santa Monica Boulevard
From left: Neil Shekhter and WSC Communities' Scott Walter with 2901 Santa Monica Boulevard (Google Maps)

Just months after rushing to capitalize on a legal loophole known as builder’s remedy in the city of Santa Monica, WSC Communities is looking to sell three of the development parcels it scored automatic approvals for, The Real Deal has learned.

The firm, run by Scott Walter and Neil Shekhter, listed three sites at 1238 7th Street, 2901 Santa Monica Boulevard and 1441 Lincoln Avenue, according to marketing materials obtained by TRD. Westmac holds the 7th Street listing, while Walker & Dunlop is marketing the other two sites.

WSC were among the first firms in the state to test the builder’s remedy provision — the penalty imposed on cities for failing to produce a state-approved housing plan.

In October, the firm filed builder’s remedy applications for 14 projects in Santa Monica, scoring a rubber-stamped green light to redevelop the sites into more than 5,000 new apartments. One of the proposals was for a 15-story tower at 5050 Nebraska Avenue.

Under state law, California cities must submit housing plans that comply with state housing goals. Cities that fail to meet deadlines to get these plans approved by the state are deemed noncompliant and lose the ability to approve or deny projects with affordable housing components.

Following its filings for the projects, WSC’s investment partner wanted to list those three properties, according to Walter, who declined to name his firm’s partner.

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Combined, the sites are entitled for 725 units, according to the marketing materials. The Santa Monica Boulevard project is set to be the largest, given its entitlements for a 12-story, 200-unit building.

“A window of opportunity opened for developers to submit applications for developments beyond the scope of the existing housing element,” marketing materials for 2910 Santa Monica read.

Guiding prices have not been disclosed, but last year, under different market conditions, WSC sold eight sites in Santa Monica entitled for about 600 units to Tishman Speyer for $150 million, or about $250,000 per unit.

WSC is planning to move forward with developing the 11 other sites that scored entitlements through builder’s remedy. Together they total more than 4,000 units.

Still, the entitlements may not be set in stone. The city of Santa Monica is exploring ways to work with WSC Communities and other developers to “work out something,”  councilmember Phil Brock told TRD earlier this month. The city council previously explored hiring outside legal counsel to weigh its options with the builder’s remedy projects, but has since reconsidered.

“We’re not preparing for a fight,” Brock concluded.

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Tags
Builder’s RemedyLA MultifamilyNeil ShekhterSanta Monica