The lawsuit forces the city to allow a 19-story development at 125-129 S. Linden Drive to move forward. (rendering courtesy of Ottinger Architects)

L.A. Superior Court Judge Curtis Kin ruled in favor of the developers of a 19-story builder’s remedy project at 125-129 S. Linden Drive in a lawsuit against the city of Beverly Hills. The lawsuit alleged the city unlawfully blocked the project, and the ruling will force the city to allow the development to move forward. The ruling was dated Aug. 12 and distributed to all parties in the lawsuit on Aug. 14.

“We are vindicated by the court’s ruling and look forward to proceeding with a project compliant with the updated builder’s remedy statutes on Linden in Beverly Hills very shortly,” a spokesperson for the developer, Leo Pustilnikov, said. “We believe this will bring much needed housing, at various income levels, to the city and will be sharing a big announcement next week.”

The development will replace a parking lot and exceeds usual city height and density restrictions due to the builder’s remedy provision. It will include 165 rental units, 33 of which will be reserved for low-income residents. Additionally, the building will feature a 73-room hotel and restaurant and a two-level underground parking structure.

The builder’s remedy is a state provision that allows private developers to bypass local code regulations when a project contains at least 20% affordable housing. The provision takes effect when a municipality’s housing element – a state-mandated outline of zoning for affordable housing within the city – is out of compliance.

The city of Beverly Hills’ housing element for the 2021-29 cycle was out of compliance for approximately three years between 2021-24.

The goal of the builder’s remedy is to incentivize the creation of affordable housing to address California’s ongoing housing crisis. The builder’s remedy falls under the state’s Housing Accountability Act, which was passed in 1982 and significantly expanded in 2017.

The lawsuit was consolidated with separate litigation filed by housing advocacy group Californians for Homeownership, which also sought a court order mandating that the city approve the development. The ruling was made in favor of both plaintiffs.

“We are pleased with the court’s decision and are optimistic that it will lead to a resolution of our remaining disputes with the city, related to the city’s compliance with state housing planning laws and denials of additional builder’s remedy projects,” Californians for Homeownership counsel Matt Gelfand said. “The city should embrace these builder’s remedy projects and work to get this much-needed housing built.”

The application for the project on Linden Drive was deemed incomplete multiple times by city staff, a determination that was appealed by the developers. On June 27, 2024, the Beverly Hills City Council unanimously voted to deny the appeal, prompting the lawsuit which will now force the city to allow the development to move forward as-is.

“The city of Beverly Hills is very disappointed with the recent ruling regarding the Linden Drive project,” City Attorney Laurence Wiener said. “We believe that we had legitimate, good faith arguments that this development lost its privileges under the ‘builders remedy’ law and needed to conform to our general plan and zoning laws.  It is unfortunate that the state has seen fit to take a good deal of local zoning out of the hands of cities and mandated higher density in order to promote more affordable housing.”

The project was also at the center of several notices of violation sent to the city by the state’s Department of Housing and Community Development. The state said that the city violated housing laws by deeming the application incomplete on the basis that the developer did not submit a general plan amendment or zoning change application. The department later sent a second notice of violation to the city, stating it broke housing laws by blocking nine additional builder’s remedy projects from moving forward.

The outcome of the lawsuit was also expected to set a precedent for the many other builder’s remedy projects the city is currently facing – several of which are actively being litigated. At least six lawsuits have been filed over builder’s remedy projects after developers alleged that the city illegally denied certain projects from moving forward. The projects have caused concern for neighbors due to their size, density and height – which often far exceed most buildings in Beverly Hills.

Ken Goldman, president of the Southwest Beverly Hills Homeowners Association, long opposed the project at 125-129 S. Linden Drive. He called it out of place due to its size, and took issue with the fact that it only accounts for 127 parking spaces for 165 residential units and a 73-room hotel.

“I am disappointed and surprised. Disappointed that it will have so many adverse effects on the neighborhood. In my opinion, the developer just decided to be as greedy as possible,” Goldman said.