Developer Re/Met claims Santa Clara violated state housing law, breached contract

City Council last year voted to cancel a 240-unit project by Re/Met during a closed session, which the company claims broke the state’s open meeting laws

San Francisco /
Nov.November 16, 2021 04:38 PM
Renderings of the Santa Clara Station Project and Republic Metropolitan President Robert H. Mendelsohn (City of Santa Clara, Republic Metropolitan)
Renderings of the Santa Clara Station Project and Republic Metropolitan President Robert H. Mendelsohn (City of Santa Clara, Republic Metropolitan)

Developer Republic Metropolitan claims the city of Santa Clara violated a state housing law and breached its contract after its top governing body last year voted in closed session to cancel a 240-unit apartment project by the company.

Republic Metropolitan — Re/Met for short — served a complaint on Nov. 12 against the Silicon Valley city, seeking either to be allowed to resume work or obtain relief for the “substantial economic hardship and years of wasted effort caused by the city.”

The development “meets all the requirements of the kind of housing that the city so desperately needs,” said Ravel Law’s Ann Ravel, an attorney for Re/Met in its claim against Santa Clara, in an interview on Tuesday.

“They clearly need places like this for housing and have failed to provide it,” Ravel said. “The way that they terminated the project, that far into the negotiation process, was ridiculous,” she said.

Re/Met, which gave the city 45 days to respond to the claim, seeks an order mandating that it and Santa Clara immediately resume good-faith negotiations under the terms of an exclusive agreement they and the Santa Clara Valley Transportation Authority (VTA) entered into in 2018. The San Francisco-based company also seeks damages to be determined at trial, assuming it and Santa Clara can’t settle matters independently, and legal fees, according to its complaint.

Santa Clara spokesperson Lon Peterson said Tuesday that the city has just begun reviewing Re/Met’s claim against it. He said that because it’s a pending complaint, the city can’t comment on it.

The City Council declined to extend its exclusive agreement to negotiate with Re/Met in a closed-door meeting on Oct. 15, 2020, saying the company failed to meet key provisions of the deal, including a requirement to relocate an existing water well on that property and provide a second well site.

Santa Clara had previously extended the exclusive agreement for six months in 2019 and from July 2019 to August 2020, the claim said.

Re/Met said in its complaint that certain city officials acted “inaccurately and fraudulently” by conditioning the agreement’s third extension on terms “never contemplated by the parties” under the original document. The developer aims to build 170 so-called workforce housing units on about 1.7 acres of land at 500 S. Benton Street, a city-owned parcel located between Santa Clara University and a Caltrain station.

Before the city voted to cancel the project, it planned to offer those rental units at $1,500 to $1,700 a month, which, while not affordable to those making less than the local median income, would have made them among the cheapest market-rate apartments available in Santa Clara County, according to the complaint.

The project also includes an affordable housing component: 70 units with rents between 30 and 80 percent of the local median income on a 0.7-acre property owned by the VTA that adjoins Re/Met’s development site. The Michaels Organization, a private affordable housing developer and owner, would have been responsible for that component, according to Re/Met’s claim.

Representatives for Re/Met and law firm Cotchett, Pitre and McCarthy, LLP, which is also representing the developer in its claim, did not respond to phone calls seeking comment. The Mercury News earlier reported details of Re/Met’s claim.





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