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Republic Metropolitan sues Santa Clara over canceled 240-unit apartment project

Lawsuit alleges city violated agreement and state laws by voting in closed session to terminate project

Renderings of the Santa Clara Station Project and Republic Metropolitan's Kelly Macy (City of Santa Clara, Republic Metropolitan)
Renderings of the Santa Clara Station Project and Republic Metropolitan's Kelly Macy (City of Santa Clara, Republic Metropolitan)

Housing developer Republic Metropolitan sued the city of Santa Clara over a 240-unit apartment project that it terminated in a closed session, saying it violated a signed agreement and several state laws by doing so.

San Francisco’s Republic Metropolitan, known as Re/Met for short, sued on Jan. 24, about two months after serving a complaint against the Silicon Valley city, the Mercury News reported. That claim sought an order mandating the two sides resume good-faith negotiations under an exclusive agreement they and the Santa Clara Valley Transportation Authority signed in 2018, as well as damages and legal fees. The city refused to respond to Re/Met’s complaint, one of the law firms representing the developer wrote in a Jan. 24 news release disclosing the lawsuit.

City of Santa Clara spokesperson Lon Peterson said the city doesn’t comment on pending litigation.

The City Council declined to extend its agreement to negotiate with Re/Met in a closed-door meeting in October 2020, saying the developer failed to meet key provisions of the deal. Re/Met wrote in its November complaint that certain city officials acted “inaccurately and fraudulently” by conditioning a third extension of the agreement on terms “never contemplated by the parties” under the original document.

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The company wants a Santa Clara County Superior Court judge to order the city to immediately resume talks and pay damages, estimated to be more than $5 million in development-related costs, the Mercury News said. It also said Santa Clara violated the state’s Housing Accountability Act by not approving its project amid the housing crisis, and separately requested the California Department of Housing and Community Development and Attorney General’s Office investigate its claims against the city.

The project has 170 so-called workforce housing units on a city-owned parcel at 500 S. Benton Street, between Santa Clara University and a Caltrain station, and 70 units available for those earning between 30 and 80 percent of the local median income — up to about $82,000 a person — on a VTA-owned property adjoining the city-owned site. Private affordable housing developer The Michaels Organization would have been responsible for the 70-unit part, according to Re/Met’s November claim.

[The Mercury News] — Matthew Niksa

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Santa ClaraSanta Clara Valley Transportation Authority