After 36 years, new development may be coming to this coastal SLO County town
For years, the tiny San Luis Obispo County community of San Simeon wasn’t allowed to grow.
The town of 550 people implemented a moratorium on any new water connections beginning in 1986 — following reports that its limited water quality was at great risk from already-intruding seawater and other pollution.
That may soon change, however.
For the first time in 36 years, the San Simeon Community Services District says it will issue a will-serve letter, to provide water and allow new development to possibly go forward on 100 isolated acres along the coast.
The revelation came during the district’s May 10 board meeting when, in closed session, it voted to grant San Simeon property owner Robert Hather a new water hookup along with $50,000 to cover legal and other costs.
Hather bought his property in 2004 and, in 2014, paid a fee to be placed on the San Simeon district’s waiting list for new water hookups.
In 2020, Hather submitted a so-called “hardship application” to the district, citing the financial burden of maintaining a vacant parcel while he waited for a water connection.
By the middle of 2021, the district had not considered Hather’s application during any board meeting, so he filed a lawsuit in federal court accusing the district of unconstitutionally depriving his property of any value by not properly considering his hardship application for a water connection.
In January, Hather filed the case in San Luis Obispo Superior Court, which took over jurisdiction.
The lawsuits were settled in May when the San Simeon CSD board agreed to administer Hather a will-serve letter and pay him $50,000. That’s far less than the district would have had to pay if the settlement had covered the full costs of Hather’s attorney fees, taxes and the price of upkeep for the property.
Because the community services district does not have any land use authority, earning a will-serve letter means Hather can bring a development permit to the San Luis Obispo County Planning and Building Department for consideration.
Hather has signaled in the past that he wishes to build a 15-condominium complex with affordable units on the 1.1-acre lot.
“The CSD like all other community services districts has a statutory, legal responsibility to secure water for its customers, provide sewer services and make sure that there’s a reliable supply,” said Babak Naficy, one of Hather’s attorneys. “It has no authority to decide, for example, how much development is appropriate, what kind of development is appropriate and any of that.”
Contrary to reports that other individuals on San Simeon’s water connection waitlist will also be granted will-serve letters as part of Hather’s settlement, the district has made no such move, said Michael Donahue, a director on the San Simeon Community Services District board.
None of the other individuals had filed for a hardship application to be removed early from the list as Hather had.
The Tribune reviewed the settlement document, and it does not say that anyone else on the 14-person list will receive a will-serve letter. It’s unknown whether the district’s board discussed granting the seven other will-serve letters during the May 10 closed session.
Repeated requests for comment from San Simeon Community Services District General Manager Charlie Grace had not been returned as of Friday evening.
The district’s legal counsel, Jeffrey Minnery, and district board chairwoman Gwen Kellas both indicated that they were not comfortable providing comments.
Donahue told The Tribune he was unhappy with the Hather settlement.
“Unfortunately, our district did not grant the first seven on the list a connection,” Donahue said, speaking on his own behalf and not as a member of the board. “This is unfair and unjust.”
Had the district chosen to grant the other will-serve letters, that would have opened the door for a massive influx in development in San Simeon after decades of quiet.
The first proposed development on the water hookup waiting list, listed under the name Cavalier Inn Inc., would feature a 145-room motel and a 2,400-square-foot restaurant.
The second party on the waiting list proposes retail development, while the third expects to build a 35-room motel.
The next four on the list are for proposed residential developments totaling 16 units. Hather comes eighth on the list with his proposed 15-unit development.
A March system-wide water supply assessment for San Simeon by Akel Engineering Group Inc. shows that the town is expected to have enough water to supply at least the 14 developments proposed on the water connection waitlist — despite the decades-long water moratorium still in place.
This story was originally published May 22, 2022 at 10:00 AM.
