First step in a coming lawsuit or a negotiating tactic?
By Ken Magri
A cannon-shot was fired across the bow of the Chico City Council by a licensed legal corporation called Believe in Chico, LLC.
In mid-February, just as the council’s closed session was starting, City Clerk Debra Presson received a claim for damages against the City of Chico for illegally conducting the 2024 election referendum where voters overwhelmingly rejected the Valley’s Edge housing development.
Is this a claim for money or a legal tactic to bring back Valley’s Edge?
Believe in Chico, LLC is the corporation behind Valley’s Edge, which had received the city council’s approval in 2023 to build a 2,777 unit project on 1,448 acres of land just outside the city’s southeast border.
The claim alleges that by holding the March 2024 election referendum, Chico violated the state’s Housing Crisis Act of 2019, also called SB330, a law designed to accelerate more new housing until 2030.
The damage claim was written by Jackson D. McNeill of the Los Angeles law firm Elkins Kalt Weintraub Reuben Gartside LLP.
Without specifying an actual dollar amount, the document asks for damages from “loss of value, loss of rents, and property holding costs (including, without limitation, property taxes, debt service, and insurance premiums), among other damages.”
In the claim, McNeill asserts that SB330 was written to prevent California’s urban populations from rejecting housing projects for reasons that are not considered objective. It directly references the law’s own text:
“The Housing Crisis Act prohibits cities from: ‘Imposing a moratorium or similar restriction or limitation on housing development, including mixed-use development, within all or a portion of the jurisdiction of the affected county or city, other than to specifically protect against an imminent threat to the health and safety….’”
This claim is based on a similar situation in Oceanside, California, where Judge Richard Whitney ruled that the city’s 2020 Measure L referendum violated SB330 by rejecting a council-approved housing plan called North River Front.
But by comparison, the Oceanside housing development was much smaller, involving 15% of the land that Valley’s Edge proposed, and about one fifth of the amount of housing units. The judge’s ruling is currently being appealed.
Nevertheless, by citing the Oceanside court ruling as precedent, Believe in Chico, LLC appears to be using its damage claim to leverage a legal settlement that allows Valley’s Edge to go forward. The letter sent to the City of Chico concludes with:
“Claimant believes that it shares many of the same goals as the City of Chico. As such, it believes that an amicable resolution to this claim remains possible, and Claimant looks forward to working with the City to resolve this claim and make the Valley’s Edge project a reality as soon as possible.”
Bill Brouhard, the landowner and one of the principals of Believe in Chico, LLC, said, “legal matters being what they are I won’t be commenting on the pending litigation.” But he immediately added that “formal legal filings will follow in a few weeks.”
Does the term “legal filings” imply a lawsuit to try and overturn the election results? The city is obligated to respond to this claim by the end of March.
Reaction to the damage claim
News & Review tried unsuccessfully several times to get a comment from City Attorney John Lam about the city’s options. But two Chico City Council members were willing to make statements.
Kasey Reynolds, now Chico’s mayor, originally voted for Valley’s Edge in 2023 while Addison Winslow voted against it. They are the only two members from that time who still serve on the city council.
Reynolds continues to support the development as is. She recently told Action News Now, “The developer purchased the property, spent 10 years and millions of dollars investing in the project. It went through the planning commission and passed and then went through the city council and passed.”
Councilmember Addison Winslow is still against Valley’s Edge as it was originally proposed. He told News & Review, “Chico’s General Plan is very direct that, in order to accomplish our goals as a sustainable city, higher standards must be applied to Special Planning Areas such as the site in question.” Winslow pointed out that higher density housing developments (more units on fewer acres) preserve open spaces and “maintain buffers against wildfire and future encroachment into the foothills.”
Winslow added that SB330 “intended to make sure opposition to housing projects is not resolved by restricting the amount of housing allowed. It does not give developers the right to shove any specific plan they want down people’s throats.”
Councilmember Tom Van Overbeek, who co-chairs the city’s Growth and Community Development Committee with Winslow, has recused himself from previous matters regarding Valley’s Edge and will continue to as developments unfold.
“I am required by law to recuse myself from the Valley’s Edge matter,” Van Overbeek reiterated, “because my house borders the Valley’s Edge property.”
Would the return of Valley’s Edge disenfranchise Chico citizens who voted against the development in what was assumed to be a fair election?
“It seems, sadly, that this action reflects disregard for the will of the people,” said Eric Nilsson, a member of Smart Growth Advocates who helped spearhead the opposition to Valley’s Edge in the 2024 referendum. “When I first heard the news and read the complaint, I thought about the many people in our town, by a 2:1 margin, who voted for many evidenced-based reasons, to prevent the Valley’s Edge development from going forward. The current Valley’s Edge housing proposal … is not the most intelligent or thoughtful manner in which to move forward in meeting Chico’s housing needs.”
Bruce Alpert, who served as Butte County’s legal counsel for over 20 years before retiring in 2022, wrote a letter to the Chico Enterprise-Record stating developer threats shouldn’t take hold.
“In my past experience as a public attorney advising a legislative body, a developer threatening suit when their development is not approved is commonplace,” Alpert wrote. “The fact that, in this case, the people of Chico voted in an election to not approve the development is something a Butte County Superior Court would be loath to overturn.”
Alpert urged the city council to “stand with the people and not be bullied by a disappointed developer.”
Will the two sides compromise?
In a previous January interview, Brouhard was asked by News & Review about proposing a smaller development in the Valley’s Edge location with less land on the east side and more housing density.
“That’s been discussed. It’s been kind-of proposed,” he answered.
Brouhard also wrote to CN&R in a subsequent email, “I like the idea of spreading density into traditionally single-family neighborhoods, but again that has to be laid out physically in a way that makes sense.”
Councilmember Winslow also left the door slightly open on a compromise.
“I will not consider re-approving the same plan, but do support working with the community and the land owners for a plan that does realistically and adequately address the major issues,” Winslow offered.
At this point, it leaves Chicoans with a few unanswered questions, the most important of which might simply be, “can we all get along?”
A project his size should have been brought before the voters BEFORE any agreement was made. Kind of like putting the cart before the horse. While I can understand the developers’ points of business, the people of Chico spoke very loudly during the elections. To allow the developer to ‘bully’ Chico by threatening legal proceedings would negate the will of the people… Businesses make money and business lose money… it is not a guarantee.
I agree 100%. I have lived here ten years now and the change I see, the seemingly endless destruction of trees to provide land for the expansion of more and more housing developments has changed Chico forever. The traffic has become horrific. It is almost impossible to find parking downtown. I used to shop at all of the small stores downtown but now if I have to circle for blocks and blocks to try to find a parking spot. I just give up and now order more and more of the things I need on line. It is no longer my beloved Chico. And becoming less so as time goes by.
At a minumum, any new development should be required to improve the existing infrastructure such as our terrible roads which have the pot holes of a third world country. The new development and its populace must pony up the cash to make these impro ements prior to allowing them to do further damage withut mitigation. If these requirements are not in a legal requirement, they can be accepted and then ignored. Bill Lyman
Thank you for addressing this issue. If the people don’t want it, its fair to say, it shouldn’t be built – period. Maybe a compromise might be if the improvements to traffic problems, reducing the number of homes built, and – maybe – an area for homeless people to live in a nicely arranged campground.
There are other locations for the building, such as up the skyway, along Hwy 99 across from Estates Drive to Neal Road, North/West Chico, and Hwy 99. just to name a few. The location of Valleys Edge is not an appropriate location for this kind of development.