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Council To Consider Ordinance that Would Grant Permit Application Extensions to Favored Few

Posted: Sunday, November 5, 2017 – 6:56 PM

By Victoria Talbot

An item that will come before the City Council Tuesday would grant permit application extensions for 33 projects that either are already expired or will expire prior to Dec. 31, 2017, including One Beverly Hills, also known as the Wanda project, at 9900 Wilshire Boulevard. The reason? Community Development says its because “the expiration rules have not been strictly enforced.”

“In the past… expiration rules have not been strictly enforced. In light of the complexities of the codes, the effort needed for coordination of multiple agency reviews, and in an effort to work with residents, staff has continued to process pending applications without strictly applying the expiration provision or formal extension requirement.” (Developers are rarely residents of the City.)

It should be noted that hundreds of hours of staff time is being utilized on expired permit applications which could be directed to viable applications.

To make up for their lax behavior, however, the staff proposes that, “To avoid any confusion, and to give the building permit applicant notice of the pending expiration, staff recommends that the approximately 33 expired but in process applications be provided a period of notice that their building permit applications will expire. The proposed Ordinance would provide a 120 day period, starting on November 7, 2017, during which the approximately 33 expired applications have the opportunity to complete the building permit application process.”

The City has notified applicants of hearings on this issue in the Planning Commission, and then again in the City Council, costing about $3,000 each time. The item was pulled from the agenda on Oc.t 17 to grant even more time to notice applicants. 

The code states that after 365 days, an extension can be granted of “one hundred eighty (180) days on written request by the applicant showing that circumstances beyond the control of the applicant have prevented action from being taken.”

This new ordinance would simply grant all 33 applicants (including Wanda) 180 days more because the City staff did not enforce the law. 

Also included in the agenda item are letters between the One Beverly Hills General Manager David  Shu and Erik Keshishian, supervising plan review engineer for the City of Beverly Hills.

The permit application for One Beverly Hills was filed in 12/13/2016 and is due to expire on 12/13/2017. If the council passes this ordinance, the project has until March 7 to finalize its permits, pay the $60 million development agreement fee, and begin construction. 

But the project’s fortunes seem to have been affected by the decline in the fortunes of Wanda CEO Wang Jianlin. Last month, Deputy General Manager for the Wanda Group Rohan a’Beckett confirmed that the project is to break ground in 2017 and to be completed in 2020, and that the $1.2 billion price tag was to come from American funds. 

It was unclear where that money was to come from. Wang Jianlin has experienced a series of apparent setbacks following his gangbuster announcement last year that he is a “pack of wolves” that will “devour” the Disney theme park in China. Since then, a $1 billion deal to buy Dick Clark Productions fell through, and earlier this summer they were forced to sell off most of their failing theme parks and some hotel assets. 

In his letter to the City, Shu said that the Wanda project was “unique.” It is unclear what he is precisely referring to when he uses the term. “While the extension may be appropriate for other projects… the OBH (One Beverly Hills) project has unique issues and mitigating factors…”

In the letter, Shu makes the case that the Main Shoring and Structural portion ought to be enough “to be considered the building permit to lock in,” the permit. If that is not enough they request a six-month extension “due to the unique nature and considerable size of the OBH project.” 

It is not clear why the project is delayed, though money seems to be a problem.

The cost, says the staff report, is that, “as a result of extending the building permits, the City will lose the opportunity cost of requiring building permit applicants to pay new building permit fees for applications that have expired.”

Upon the expiration of permit applications, construction “documents, plans and other data submitted for review would thereafter be returned to the applicant or destroyed by the building official.”  To continue with their project, the applicant would have to resubmit plans and pay fees. That could cost the City hundreds of thousands of dollars in uncollected application fees from expired permit applications, in re-applying for their permits.

That certainly seeks to minimize the damage. Please note, that Wanda’s permits for the shoring alone cost over $2 million.

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