SB 79 Latest in State vs. Cities Push-Pull

Introduction to the State vs. Cities Push-Pull

No one likes a micromanager–and some cities might say Sacramento is the most annoying taskmaster of them all, particularly as it relates to housing.

Last week ended with a committee hearing on Senate Bill 79, a contentious piece of legislation that would allow housing projects as high as 75 feet within a quarter of a mile of a high-frequency rail or bus stop, regardless of local zoning.

Housing proponents like it. Others view it as another override of local government in the state’s bid to address housing supply. They see state officials using developers as a means of enforcement through vehicles such as builder’s remedy or the latest California Environmental Quality Act review exemptions.  

On that note, the Los Angeles City Council last week voted 8-5 in favor of formally opposing SB 79.

The council follows the Pacific Palisades Executive Committee, which had already stated its opposition to the bill in a letter to Gov. Gavin Newsom, the latest signal of mounting concerns over how the Los Angeles community is rebuilt post-fires.

Elsewhere locally, developer Leo Pustilnikov told the Beverly Hills Courier that he’ll move ahead with his proposed builder’s remedy project after nabbing a Los Angeles Superior Court Judge’s ruling earlier this month in his favor. The developer tapped the law to move his proposed 19-story residential, hotel and restaurant project forward. He’s made a few adjustments since the court battle, now envisioning a 36-story property with more than double the residences and a few more hotel rooms at 125-129 South Linden Drive.

The push-and-pull brings to mind a comment made by City of Brea Mayor Pro Tem Cecilia Hupp in July during a panel, which at one point tackled the topic of the latest CEQA exemptions.

“Local control is a huge issue for us. All of us,” Hupp said. “And the problem that we have is when these bills pass, they pass on a one-size-fits all basis. And we all know that it doesn’t apply to a lot of our cities. Much of what passes in Sacramento applies to the Bay Area.”

Bass’ Pick for Hollywood Liaison Comes from Public Works

Los Angeles Mayor Karen Bass’ new liaison for the film and TV industry may be a case of too little, too late.

Bass said Wednesday she named Steve Kang, president of the Los Angeles Board of Public Works, to be Hollywood’s point person in City Hall. Industry trade publication Variety didn’t even bother at coverage, nor did The Ankler. The LA Times took a more direct shot, pointing out the more than two-year wait for Bass to install someone in the position.  

So why does the real estate industry care

The film industry – from celebrities to producers and writers – have long been a robust client base for Los Angeles real estate. Many agents have also come from Hollywood.

Yet, a confluence of factors has led to a decline in residential deals from those in the industry. That includes the rise of streaming services and artificial intelligence, to the lack of incentives aimed at keeping production local. More recently, 2023’s Writer’s Guild of America and Screen Actors Guild-American Federation of Television and Radio Artists’ strikes cast a further chill on residential deals.  

The clock’s now ticking on what Kang can do for Hollywood – and real estate by extension.  

Behind the buyers of burned lots

A raft of speculative developers hasn’t entirely been born out when it comes to who is picking up burned lots in Malibu, the Pacific Palisades and Altadena.

A roundup of some of the largest plays that have been made so far in areas burned by January’s wildfires brought forth some interesting characters.

At the top of that list were two serial entrepreneur brothers in Nick and Mat Mowbray, who made a fortune selling self-filling water balloon kits and the TikTok viral miniatures of everyday brand name items under the line Mini Brands.

There’s also Altadena resident Edwin Castro, who won the California Lottery back in 2022, and is now pumping some of his Powerball winnings into real estate through Black Lion Properties.  

Malibu Celebrates One Permit

Construction has begun on Malibu’s first residential rebuild post-Palisades Fire.

By comparison, Altadena and other areas impacted by the Eaton Fire have seen 257 building permits issued as of Friday, according to Los Angeles County data. The Palisades now counts 17 permits approved.

Community Development Director Yolanda Bundy referenced Malibu’s tough terrain when it comes to building in a statement at the time of the city’s announcement on its lone permit.

“While it may feel slow and challenging, our process ensures each rebuild is safe, resilient and reflective of Malibu’s natural character,” Bundy said.

There are nine other Malibu homes now in the building plan check phase, with the next step after that being an approval.

Deal Sheet: Palisades’ Top Deal

A new No. 1 has emerged in the Pacific Palisades.

Thursday’s trade of the historic Parry Residence at 14924 Camarosa Drive – the Huntington neighborhood’s second-ever home to be built – sold for $22.1 million, or $2,635 per square foot. The total bests the year’s previous record of $20 million ($2,498 per square foot) at 814 Toulon Drive.  

The same buyer, which Carolwood Estates’ Shaun Alan-Lee described as a local owner-user, also picked up 14929 La Cumbre Drive, the property behind the Parry Residence, for $5.3 million, or $1,813 per square foot.

Alan-Lee, along with Carolwood’s Peter Zimble and Nick Segal, represented the seller, which is an entity managed by Michael Cohen.

Berkshire Hathaway HomeServices California Properties’ Larry Young represented the buyer.

“Over the past couple of months, we’ve seen an uptick in buyer activity, especially sub-$10 million. So, from lots to actual properties that are still standing, we’ve seen them trade,” Alan-Lee said of the state of the Palisades’ residential market.

Belated credit to Chris Cortazzo

In other Malibu news, it was recently learned Compass’ Chris Cortazzo was behind the sale of an $80 million surf shack.

Cortazzo wasn’t identified as the agent when the story broke.

Property records available at the time indicated the quiet trade of 28719 Grayfox Street occurred off market on July 29 and made for this year’s most expensive residential sale in Malibu.

The deal involved two lots, one with a 1,300-square-foot home. The second lot is vacant.

Beyond that, little is known about the buyer or seller.

A Wyoming shell company called Surfwatch LLC unloaded the property. It’s tied to a Santa Barbara address and is managed by Wendy Schreiber Fiske. The buyer is a Texas-based LLC called PDPG.

Conclusion

The ongoing battle between the state and cities in California continues to be a contentious issue, particularly when it comes to housing and development. The introduction of Senate Bill 79 has sparked heated debate, with some cities opposing the bill and others supporting it. Meanwhile, the real estate industry is watching closely, as the outcome of this battle could have significant implications for the market.

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Pustilnikov beats Beverly Hills on builders remedy

Malibu finally gets first rebuild permit, 8 months after Palisades fire