Staff Report
PREPARED BY: ROBERT SCHULTZ
Town Attorney
Reviewed by: Town Manager and Finance Director
110 E. Main Street Los Gatos, CA 95030 ● 408-354-6832
www.losgatosca.gov
TOWN OF LOS GATOS
COUNCIL AGENDA REPORT
MEETING DATE: 03/21/2107
ITEM NO: 11
DATE: MARCH 15, 2017
TO: MAYOR AND TOWN COUNCIL
FROM: ROBERT SCHULTZ, TOWN ATTORNEY
SUBJECT: A. REQUEST FOR REFUND OF DEMOLITION FINE. 130 MASSOL AVENUE.
PROPERTY OWNER: DIETER SCHMIDT.
B. REQUEST FOR WAIVER OF DEMOLITION FINE. 205 UNIVERSITY AVENUE.
PROPERTY OWNER: TAMI SHOOT.
RECOMMENDATION:
Staff recommends that the Town Council: a) deny the request for a refund of fines for 130
Massol Avenue and b) deny the request for a waiver of fines for 205 University Avenue.
BACKGROUND:
On May 15, 1989, Town Council adopted Ordinance 1789 to define demolition of historic
structures in an attempt to distinguish between a remodel and a new house. This was
necessary because many developers were buying older houses for remodelin g purposes.
However, when the "remodel" was complete, there was little of the existing house preserved.
This issue became more important when a historic structure was involved. As a result, a
definition of demolition of historic structures was added to the Town Zoning Code.
On May 7, 2001, due to the number of unlawful demolitions which had been occurring, the
Town Council adopted Ordinance 2083 to add definitions, penalties and an appeal process for
unlawful demolition of historic structures. The definition of “Demolition (Historical Structure)”
is set forth in 29.10.020 and states in pertinent part:
PAGE 2 OF 7
SUBJECT: A. REQUEST FOR REFUND OF DEMOLITION FINE. 130 MASSOL AVENUE.
PROPERTY OWNER: DIETER SCHMIDT.
B. REQUEST FOR WAIVER OF DEMOLITION FINE. 205 UNIVERSITY AVENUE.
PROPERTY OWNER: TAMI SHOOT.
MARCH 16, 2017
S:\COUNCIL REPORTS\2017\03-21-17\Massol and University Fines\Staff Report FINAL.docx 3/16/2017 5:37 PM SLL
BACKGROUND (Cont’d):
Demolition (historic structures) means:
1) Removal of more than twenty-five (25) percent of the wall(s) facing a
public street(s) (or a street facing elevation if the parcel is a corridor lot
or is landlocked) or fifty (50) percent of all exterior walls; or
2) Enclosure or alteration (i.e.: new window and or window relocation) of
more than twenty-five (25) percent of the walls facing a public street (or
a street facing elevation if the parcel is a corridor lot or is landlocked) or
fifty (50) percent of the exterior walls so that they no longer function as
exterior walls; or
All remaining exterior walls must be contiguous and must retain the existing
exterior wall covering. No new exterior wall covering shall be permitted over
the existing exterior wall covering. The following are exempt from this
definition:
a. Replacement. The exterior wall covering may be removed if the
covering is not original to the structure.
b. Repair. The removal and replacement of in kind , non-repairable
exterior wall co vering resulting in no change to its exterior
appearance or historic character if approved by the deciding body.
c. Removal. The removal of an addition(s) that is not part of the
original structure and which has no historic significance, as
determined by the Historic Preservation Committee. Demolition
shall be determined by subsections (1) and (2) above for the original
structure, where walls enclosed by additions shall be considered as
exterior walls.
The Town Code related to appeals and penalties is set fo rth in 29.20.265(b) and
29.10.09030(g) and states in pertinent part:
29.20.265(b)
For hearings dealing with an appeal of an unlawful demolition and/or the
penalty fee for the lawful demolition , the Planning Commission shall do the
following:
PAGE 3 OF 7
SUBJECT: A. REQUEST FOR REFUND OF DEMOLITION FINE. 130 MASSOL AVENUE.
PROPERTY OWNER: DIETER SCHMIDT.
B. REQUEST FOR WAIVER OF DEMOLITION FINE. 205 UNIVERSITY AVENUE.
PROPERTY OWNER: TAMI SHOOT.
MARCH 16, 2017
S:\COUNCIL REPORTS\2017\03-21-17\Massol and University Fines\Staff Report FINAL.docx 3/16/2017 5:37 PM SLL
BACKGROUND (Cont’d):
1) The Planning Commission shall consider any written or oral evidence consistent
with its rules and procedures regarding the violation, compliance by the
violator or by the real property owner, and the amount of the penalty.
2) The Planning Commission shall make the findings and issue its determination
regarding:
a. The existence of the violation;
b. The appropriateness of the amount of the penalty fee.
3) The Planning Commission shall issue written findings of each violation. The
findings shall be supported by evidence received at the hearing.
4) If the Planning Commission finds by the evidence provided that a violation has
occurred, the Planning Commission shall affirm the decision of the Planning
Director.
5) If the Planning Commission finds that no violation has occurred, the Planning
Commission shall state a finding of those facts.
6) The Planning Commission may approve or reduce the amount of the penalty
but not the application penalty fee which is established by resolution.
29.10.09030(g)
Penalties for unlawful demolition: A property owner who has unlawfully demolished a
structure shall:
1) File the required Planning and Building Depa rtment applications and pay the
required fees as established by resolution for new applications and for work
unlawfully completed.
2) Be subject to the greater of the following penalti es set by the Planning Director
as an administration order:
a. If the structure has a Landmark Historic Preservation designation a fine
equaling fifteen (15) percent of the building permit valuation at the time
of demolition , as determined by the Planning Director; or
b. If the structure was an historic residence and does not have a Landmark
Historic Preservation overlay zone, the fine shall be equal to ten (10)
percent of the building permit valuation at the time o f demolition, as
determined by the Planning Director.
PAGE 4 OF 7
SUBJECT: A. REQUEST FOR REFUND OF DEMOLITION FINE. 130 MASSOL AVENUE.
PROPERTY OWNER: DIETER SCHMIDT.
B. REQUEST FOR WAIVER OF DEMOLITION FINE. 205 UNIVERSITY AVENUE.
PROPERTY OWNER: TAMI SHOOT.
MARCH 16, 2017
S:\COUNCIL REPORTS\2017\03-21-17\Massol and University Fines\Staff Report FINAL.docx 3/16/2017 5:37 PM SLL
BACKGROUND (Cont’d):
If no building permit was issued, the fine shall be assessed on the building
permit filed for the replacement structure.
In 2010, the owner of 130 Massol Avenue was fined for demolition of a historical structure
without a permit pursuant to the Town Code, paid the fine of $82,950, and is now requesting a
refund of the fine (Attachment 1).
In 2014, the owner of 205 University Avenue was fined for demolition of a historical structure
without a permit pursuant to the Town Code, has not paid the fine of $23,200.00, and is
requesting a waiver of the fine (Attachment 2).
DISCUSSION:
A. 130 Massol Avenue
In May 2009, the Town approved the relocation and addition for a contributing historic
structure at 130 Massol Avenue. During the building permit process, the Town required a
demolition affidavit which requires all parties of the project to review the Town’s demolition
code requirements.
On July 2, 2010, the Town was made aware of work beyond the approved plans and the Town
placed a stop work on the project. The work resulted in demolition of the contributing historic
structure. Pursuant to Town Code, the Town required an Architecture and Site application and
payment of fines prior to continuing construction. In order to spread the fine over time , as
opposed to a lump sum payment, the Town agreed to a payment schedule for the fines and the
property owner has paid the total sum of $82,950 for the demolition of a historical structure
(Attachment 3). The remodel to the historical structure has since been completed and no
further approvals are required by the Town.
In July 2013, the owner requested that the Town refund the fines. Subsequently, the Town
staff communicated and met with the property owner on several occasions and explained that
only the Council had the ability to refund fines. The property owner’s position was that he was
not aware of, and claims that Staff did not tell him, that he could appeal the fines pursuant to
Town Code.
In March 2015, this matter came before the Town Council. Council Member Rennie recused
himself due to the fact that he owns real property within 500 feet. Council Member Sayoc was
PAGE 5 OF 7
SUBJECT: A. REQUEST FOR REFUND OF DEMOLITION FINE. 130 MASSOL AVENUE.
PROPERTY OWNER: DIETER SCHMIDT.
B. REQUEST FOR WAIVER OF DEMOLITION FINE. 205 UNIVERSITY AVENUE.
PROPERTY OWNER: TAMI SHOOT.
MARCH 16, 2017
S:\COUNCIL REPORTS\2017\03-21-17\Massol and University Fines\Staff Report FINAL.docx 3/16/2017 5:37 PM SLL
DISCUSSION (Cont’d):
absent. A motion by Council Member Steve Leonardis to grant the request for refund of the
fines failed for lack of a second. A motion by Mayor Marcia Jensen to deny the request for
refund of the fines was seconded by Vice Mayor Barbara Spector failed 2/1, Council Member
Steve Leonardis voting no. The item was continued to a future Council meeting when
additional Council Members would be in attendance and the Town Attorney would do further
research on the conflict of interest with regards to Council Member Rob Rennie.
B. 205 University Avenue
In April 2014, the Town approved the addition and remodel for a contributing historic structure
at 205 University Avenue. During the building permit process, the Town required a demolition
affidavit which requires all parties of the project t o review the Town’s demolition code
requirements.
On July 3, 2014, the Town was made aware of work beyond the approved plans and the Town
placed a stop work on the project. The work resulted in demolition of the contributing historic
structure. Pursuant to Town Code, the Town required additional plans to be submitted. The
addition and remodel to the historical structure has since been completed and no further
approvals are required by the Town. Pursuant to Town Code, the Town Manager requires the
payment of fines in the amount of $23,200.00 for the demolition of a historic structure before
final occupancy will be granted to the property owner.
In November 2015, the owner requested that the Town waive the fines. Subsequently, the
Town staff communicated and met with the property owner on several occasions and explained
that only the Council had the ability to waive fines. The property owner’s position was that she
was not aware of, and Town Staff did not tell her, that she could appeal the fines pursuant to
Town Code.
C. Conflict of Interest
Council Member Rob Rennie owns residential real property within 500 feet of 130 Massol
Avenue. Council Member Barbara Spector and Marico Sayoc both own residential real property
within 500 feet of 205 University Avenue.
Section 87100 of the Political Reform Act prohibits a public official from making, participating
in, or otherwise using his or her office position to influence a governmental decision in
PAGE 6 OF 7
SUBJECT: A. REQUEST FOR REFUND OF DEMOLITION FINE. 130 MASSOL AVENUE.
PROPERTY OWNER: DIETER SCHMIDT.
B. REQUEST FOR WAIVER OF DEMOLITION FINE. 205 UNIVERSITY AVENUE.
PROPERTY OWNER: TAMI SHOOT.
MARCH 16, 2017
S:\COUNCIL REPORTS\2017\03-21-17\Massol and University Fines\Staff Report FINAL.docx 3/16/2017 5:37 PM SLL
DISCUSSION (Cont’d):
which the official has a financial interest. For real property financial interests within 500 feet of
the project, there is a prohibition on participation in a governmental decision unless the Fair
Political Practices Commission (FPCC) provides “written advice allowing an official to participate
under . . . circumstances [where] the Commission determines that there are sufficient facts to
indicate that there will be no reasonably foreseeable measurable impact on the official’s
property.”
In January 2017, the Town Attorney’s Office sent a legal analysis to the FPPC and requested
formal written advice on behalf of Council Members Rob Rennie, Marico Sayoc and Barbara
Spector regarding the 500-foot conflict of interest provisions of the Political Reform Act
(Attachment 4). In February 2017, the FPPC responded and determined that the PRA conflict of
interest provisions do not prohibit Council Member Rob Rennie, Barbara Spector, and Marico
Sayoc from participating in decisions concerning the refund or waiver of fees (Attachment 5).
D. Penalty Refund and Waiver Request
Pursuant to the Town Code, the property owner who has unlawfully demolished a structure
shall file the required applications, including the application fees and be subject to fines. The
penalty requirement was adopted by the Town as a result of several unlawful demolitions of
historic structures in the early 2000’s.
CONCLUSION:
Due to the precedent setting nature of the request and in accordance with Town Policy, staff
recommends that the Council deny the refund request for 130 Massol Avenue and deny the
request for waiver of demolition fines for 205 University Avenue.
ALTERNATIVES:
If Council disagrees with the staff recommendation, the Council may grant the request for the
refund for 130 Massol Avenue and/or grant the request for waiver of demolition fines for 205
University Avenue.
COORDINATION:
The preparation of this report was coordinated with the Community Development Department
and Finance Department Directors.
PAGE 7 OF 7
SUBJECT: A. REQUEST FOR REFUND OF DEMOLITION FINE. 130 MASSOL AVENUE.
PROPERTY OWNER: DIETER SCHMIDT.
B. REQUEST FOR WAIVER OF DEMOLITION FINE. 205 UNIVERSITY AVENUE.
PROPERTY OWNER: TAMI SHOOT.
MARCH 16, 2017
S:\COUNCIL REPORTS\2017\03-21-17\Massol and University Fines\Staff Report FINAL.docx 3/16/2017 5:37 PM SLL
FISCAL IMPACT:
If the Council approves the refund, the total fiscal impact of the refunds requested is $82,950.
The funding source for the refund will be General Fund revenues in the Town’s proposed FY
2017/18 Operating Budget.
ENVIRONMENTAL ASSESSMENT:
This is not a project defined under CEQA, and no further action is required.
Attachments:
1. Request for refund of fines – 130 Massol Avenue
2. Request for waiver of demolition fines – 205 University Avenue
3. Payment of fines – 130 Massol Avenue
4. Town Attorney Communication to FPCC dated January 5, 2017
5. FPCC communication to Town dated February 6, 2017