California officials are pressuring the city of Beverly Hills, where approval of a new hotel and apartment complex is moving too slowly for state housing officials and the governor.
It’s Lightning Rod, a mixed-use development near Wilshire Boulevard brought about under a state law meant to force cities to build more housing, whether they like the proposals or not.
The 19-story building being built on Linden Drive by local developer Leo Pustilnikov will be large by Beverly Hills standards and include a 73-room hotel and restaurant on the first five floors. The upper floors will have 165 apartments, with 33 units reserved for rent to low-income families, according to the plan.
The project has so far failed to gain approval from city planning leaders, who say Pustylnikov has not provided all the details about the project the city needs for approval.
Pustylnikov put forward a new interpretation of state law called “builder’s solution” Pressuring cities to permit development projects on a size and scale that are barred under zoning rules.
As part of their effort to combat California’s housing shortage and homelessness crisis, legislators recently strengthened the law that gives developers leeway to get larger developments approved as long as they set aside a certain percentage for low-income residents.
Last month, the state Department of Housing and Community Development backed Pustilnikov by issuing a “violation notice” to the city, saying it was violating state housing laws by halting the project.
“The City Council should reverse its decision and direct city staff to begin work on the project without delay,” the state’s notice says, citing the council’s vote in June to delay the approval process.
Gov. Gavin Newsom said in a statement that the city is violating the law by “blocking” the proposal and referring to opponents of the project as NIMBYs — a highly charged acronym for “not in my backyard,” which refers to homeowners who oppose development projects in their neighborhoods.
“We can’t solve homelessness without addressing our housing shortage,” the governor said. “Now is the time to build more homes, not give in to NIMBY demands.”
Beverly Hills was under pressure to approve the Linden project even before the state’s letter. In June, Californians for Homeownership, a nonprofit affiliated with the California Association of Realtors, sued the city in Los Angeles County Superior Court for not moving forward with the development.
Some residents of the neighborhood south of Wilshire Boulevard are upset about the scale of the project, which aims to fill a parking lot located between a five-story office building and low-rise apartment buildings at 125-129 S. Linden Drive.
“None of us are against affordable housing, but you don’t have to be a NIMBY to say this is way out of line,” said Kenneth A. Goldman, president of the Southwest Beverly Hills Homeowners Association.
Goldman said the building would be nearly four times taller than the city’s five-story height limit and could threaten the neighborhood’s “quiet lifestyle.” He said the construction period would be “hell.”
The city has until Sept. 20 to respond to state housing officials and indicate a statement One reason for the delay is that Pustylnikov changed the original residential proposal to include a hotel, a change that could provide a financial advantage for the developer in a tourist-friendly city where obtaining permission to build a new hotel is a difficult task.
Last year, Beverly Hills voters decided to overturn City Council approval of an ultra-luxurious hotel called the Cheval Blanc along Rodeo Drive after French luxury retailer LVMH spent millions of dollars planning the project.
“The project has not been rejected,” the city said in a statement about the Linden Drive proposal.
“What was originally presented as a purely residential project has transformed into a 73-room hotel and restaurant project reduced by 35 residential units, including a reduction of 7 affordable units,” it states.
The city said once the application is complete, there will be a public hearing, followed by Planning Commission review and possible approval by the City Council.
The process could be complicated by Pustylnikov’s intention to sell his stake in the Linden Drive property as part of Chapter 11 bankruptcy proceedings related to another of his real estate projects.
In 2018, Pustilnikov purchased a 50-acre parcel on the Redondo Beach waterfront, the site of a defunct power plant. The property is controlled by entities owned by Pustilnikov and his business partner, Eli Dromi. Using the builder’s remedy law, the pair have pursued a massive mixed-use project for the site, with 2,700 apartments as its centerpiece. In court documents, Pustilnikov estimates that the development, if completed, would be worth $600 million.
The effort has been hampered by fights with the city of Redondo Beach, the California Coastal Commission and power plant owner AES Corp. In late 2022, AES threatened to seize Pustylnikov. To prevent this, one of the entities that owns the site filed for bankruptcy.
In a recent filing in the case, Pustilnikov and Dromi said they would sell the Linden property for $27.5 million to retain ownership of the power plant site.
However, Pustilinkov’s representative, Adam Englander, said in a statement that this isn’t necessary.
Instead, the Redondo Beach property could bring in more investors and a developer with luxury hotel experience could be a partner in the Linden project, Englander said.
Englander said, “It is not anticipated that the Linden project, in its current form, will be sold prior to completion.”
Pustylenkov plans to build about 3,500 apartment units in a dozen projects in Beverly Hills, Redondo Beach, Santa Monica and West Hollywood under the builder’s measure – 700 of them dedicated to low-income people. The Linden project is one of seven projects he is planning in Beverly Hills alone.
The builder’s measure gives city councils little leeway to reject development. But because it is legally untested and varying state environmental laws still apply, projects are not easy. None of Pustilnikov’s proposals have been approved.
If cities do not have a state-approved blueprint for future development, they are subject to the law. Every eight years, State expects communities to prepare zoning plans Building a specific number of new homes, including those designated for low- and moderate-income families.
In the current eight-year cycle, Beverly Hills has struggled to get a plan passed. Elected officials and residents objected to the city’s requirement to make room for 3,104 homes, saying doing so would forever change the character of the community.
The city missed several deadlines and was sued by Californians in need of homeownership. In December, an L.A. County Superior Court judge ruled that Beverly Hills could no longer issue any building permits — including for pools, kitchen and bathroom remodels, and other renovations — because of its failure.
The city appealed the decision and continued issuing permits in the meantime, but The decision sparked concern among civic leadersIn May, State approves revised housing scheme The threat of a permit moratorium for Beverly Hills is over.
