Builder’s remedy: “The walls are closing in on cities”
Developer Leo Pustilnikov speaks of how the courts will save projects at TRD’s LA Forum
More than a year after it attracted widespread attention, and after multiple recent favorable court decisions, builder’s remedy has a clear path forward, developer Leo Pustilnikov said at The Real Deal’s LA Real Estate Forum.
“Every court so far has said builder’s remedy applies,” Pustilnikov said. “Day by day, year by year, the walls are closing in on cities. … It’s a matter of time.”
Pustilnikov, a young developer who has emerged as the state’s poster boy for the unproven development tool, also spoke at the event about his background in what is now Ukraine and referenced a development philosophy that focuses on capitalizing on complicated deal structures, taking the longview and relying on the integrity of the U.S. court system.
“In that country everything was done on bribes,” he said of his early years in what was then the Soviet Union.
But in California — where Pustilnikov’s ongoing projects include a Redondo Beach power plant overhaul and more than a dozen builder’s remedy applications in Beverly Hills, Santa Monica and West Hollywood — the rule of law still matters, Pustilnikov believes.
“Ultimately, my position is anchored in law,” he said at the forum. “The courts will be my salvation.”
Pustilnikov, who led a team that bought the Redondo Beach waterfront power plant for around $150 million in 2020 — a property that would have fetched several times more if not for a litany of political headaches — also put an estimated timeline on a potential groundbreaking. Construction could start in five years, he said, but that’s a best case scenario.
The Redondo project “will be the last builder’s remedy in the state that gets a shovel in the ground,” he said.
Along with the inherent complexity of the mixed-use build, which would include more than 2,700 residential units, the project is involved in multiple lawsuits, and the City of Redondo Beach has attempted to shut it down.