SLO City Council sued over controversial 71 Palomar housing development

A group calling itself Friends of 71 Palomar has sued the city of San Luis Obispo in an attempt to stop a residential development — which drew significant opposition from neighbors and environmental advocates — from being built in a neighborhood off Foothill Boulevard.

The group, led by residents Teresa Matthews and Lydia Mourenza, claims in its suit that the city failed to analyze “environmental and significant impacts” as required under the California Environmental Quality Act.

The lawsuit, which hasn’t yet been served to the city, represents only one side of the dispute.

The controversial 33-unit project at 71 Palomar Ave. got the go-ahead in April after the City Council approved the project by a 3-1 vote. City Attorney Christine Dietrick said Tuesday the city “feels very strongly that we did comply” with legal planning requirements.

“We vetted and appropriately addressed the (proposal),” Dietrick said. “There was a great deal of public consideration and engagement.”

The lawsuit contends the city should have required a formal environmental impact report instead of a less rigorous review called a mitigated negative declaration.

“The city’s adoption of the MND and approval of the project constitutes an abuse of discretion and must be reversed,” the lawsuit states.

The lawsuit contends the project, which calls for removing 55 trees on the 1.3-acre site, will have a significant effect on trees and bird habitat; a plan to move and renovate the property’s Sandford House, a historical home built in the 1890s, will result in “substantial adverse change.”

The project also failed to conduct an environmental review of whether nearby Luneta Drive should be open or closed, the lawsuit states. The road is now closed, and the city is studying whether Luneta Drive should be eliminated from planning documents as a connecting street.

The developer, Loren Riehl, declined comment on the lawsuit because of the “nature of the ongoing legal action.”

Riehl’s attorney, Diane Hanna, wrote to the City Council in April, before the council’s final go-ahead, that the project’s opponents “have failed to identify any legal or factual basis that would support its position that the project requires preparation of an Environmental Impact Report.”

The project went through hearings by several city advisory bodies that considered reports on the historical home and an assessment by a city arborist. The developer plans to plant two trees for each one that is removed, though the lawsuit states that the planning process didn’t determine “where the trees will be planted.”

As for Luneta Drive, Dietrick said the project would comply with city plans for the street.

“It’s the city’s position that there has been no piecemealing of the project, as the project was considered and conditioned as a whole based upon current city plans and policy,” Dietrick said.