Appeal won’t stop new SLO County apartments. ‘The damn project’s going in anyway’
A new 92-unit apartment complex is coming to Arroyo Grande after surviving an appeal by the property’s closest neighbors.
On Tuesday, the Arroyo Grande City Council voted 3-1 to deny an appeal of the Creekside Junction project at 1271 and 1281 James Way, with Councilmember Aileen Loe voting against the project and Mayor Caren Ray Russom recusing herself from the hearing.
Previously approved by the Planning Commission in January, the project and applicant Russ Sheppel appeared before the City Council after its immediate neighbors, Pismo Medical Properties LLC, Arroyo Grande Partners LLC and Ray Bunnell filed an appeal of the project.
After the appellants requested a continuance from the project’s initially planned hearing at the March 24 City Council meeting, Tuesday’s final appeal hearing saw residents express concerns about the project’s lack of parking and site conditions during a two-hour public comment period.
Councilmember Jim Guthrie said in asking the city to take their side, the appellants were requesting that they take on a risk of litigation likely to be unsuccessful.
“I doubt we would lose our housing element over this one issue, but it’s a black mark,” Guthrie said. “If I thought we could win in court, I might do it, but I don’t think there’s a chance in hell that we would win this in court.”
Public opposes project size
Neighbors of the project — from private residents to business owners and clients — were quick to call the Creekside Junction’s parking inadequate.
Consisting of two new four-story residential buildings, the residential units will be made up of 20 studios, 58 one-bedroom units and 14 two-bedroom units, with 15% of the units set aside as affordable housing.
As approved, the applicant requested concessions to lower the number of required parking spaces under the city municipal code from 99 to 98, but an additional concession requested by the applicant prior to Tuesday’s hearing cut that number down to 31 spaces, according to city staff. The applicant also requested a concession to reduce the minimum of 10% of the gross lot area for off-street parking to 8.23%.
Those spaces were spread over 31 one-car garages under the building, 18 parking spaces proposed to be shared with the nearby Best Western hotel, 47 non-designated surface parking spaces and a pair of designated surface parking spaces, according to the staff report.
That reduction in required parking — like the project’s height concession that waives the city’s 35-foot height limit in favor of a 45-foot design — was made possible by state density bonus laws that require cities to make concessions to developments which include an affordable housing component.
It’s those parking requirements that pose the greatest issue to nearby businesses, many commenters said.
Pastor Robert Burnett of Hope Church said while Sheppel has been a part of the church in the past, helping install the roof on its current building, his responsibility is to the church as it exists now.
“We need housing, but it needs to be responsible,” Burnett said. “If the state of California is strong-arming — local cities to have to do what they say — then where do we have the freedom to develop what fits for us?”
Curl Fitness exercise director Lori Brianna said the “human factor” has been overlooked in the appeal process, particularly when it comes to the people who use services at the nearby medical complexes and Curl Fitness.
“By taking away much of our parking spaces, this will create a huge safety issue for those older members, whom will now possibly be expected to walk great distances to enter the club,” Brianna said. “Not only this will be an extreme physical difficulty, but it will also put their already compromised physical limitations at risk by adding in the extra danger of more cars in a smaller space vying for parking spots.”
Appellant attorney Edwin Rambuski echoed his side’s concerns about public safety and said the city should make a finding that the traffic and parking issue poses a public health risk.
“Staff and counsel rely on government code section 65589.5(j)(1)(a) to put the fear of God into Council and try to convince you that if you do not approve this project, bad things will happen to your housing element — there will be fines, attorneys, fees,” Rambuski said. “Your counsel and staff are misinterpreting that code section.”
City backs project, citing state law
Despite the impassioned public comment, the City Council ultimately took the position that there was little they could do to deny the project without breaking California’s increasingly pro-housing laws.
Guthrie said the laws that incentivize housing density that were passed over the past five years “have placed a burden on us and removed our ability to do what we used to do 10 years ago,” when the City Council was more apt to deny projects based on objective and sometimes subjective standards.
But Guthrie also said while he understood the appellants’ concerns about traffic and parking impacts, he wasn’t sympathetic to the specifics of their arguments.
“The rules that we’re dealing with require a much higher standard than we can extract from the evidence that we’ve received tonight,” Guthrie said. “I asked directly for very specific evidence, and I did not hear it from your attorney.”
Councilmember Loe, the sole vote in the appeal’s favor, took the opposite stance, calling the decision between violating the state’s housing laws and approving an unfavorable project a “Hobson’s choice” — a free choice in which only one thing is actually being offered.
“That’s a very, very uncomfortable position, but having heard everything that I’ve heard, I can’t dismiss the concerns that I’ve heard, and so I have to say I won’t be supporting the staff recommendation,” Loe said.
Councilmember Kate Secrest called the decision a “nightmare wrapped in a disaster,” but said her first responsibility is to protect the city’s financial and legal interests.
“It’s an easier way out when I have people sort of (making) vaguely veiled threats to not re-elect me — which, you can do whatever you want, but I am running in November — that’s just kind of chickens--- in my mind,” Secrest said. “What’s going to happen if this (denial) was granted is it’s going to go to the state, there’s going to be a lawsuit we’re going to lose, we’re going to pay all those attorney fees and the damn project’s going in anyway.”
This story was originally published April 16, 2026 at 9:22 AM.
