Pacific Grove: Pro-STR Group Files Lawsuit Against PG and Loses

P.G. lottery for short-term rental licenses is a go after judge rules against owners

 

P.G. lottery for short-term rental licenses will move forward

 

STR lottery leads to disappointed owners in PG

Pro short-term rental group files lawsuit against Pacific Grove

By Carly Mayberry, Monterey Herald
Posted: 04/09/18, 6:15 PM PDT |
Pacific Grove >> There’s a new twist in Pacific Grove’s short-term rental saga.

Last week, the pro-short-term rentals group dubbed STRONGpg (Short-term Rental Owners Neighborhood Group) filed a lawsuit against the City, mayor and City Council seeking an injunction claiming that the lottery aspect of the City’s revised ordinance is based on “complicated criteria that doesn’t correlate with verified complaints lodged against STRs.”

Representing members of the unincorporated association include Joy Colangelo, Kevin Delaney, William B. Harder, Alka Joshi, Kathryn Kranen and Spencer Tall yet some members of the Monterey County Alliance and other members are also involved. Attorney David Lanferman of Rutan & Tucker LLP of Palo Alto has been hired for representation.

The writ of mandate was filed in the Superior Court of the County of Monterey and comes after the Pacific Grove City Council in February passed an ordinance 4-1 that amended the city’s short-term rental policy to include a lottery system. The lottery is designed to get the number of STRs down from 290 to 250 and make it so that only 15 percent of housing per block is dedicated to such rentals. When the ordinance was passed, Mayor Bill Kampe said it was explicitly intended to reduce density in 52 blocks in the city, noting that out of the 475 blocks in the city, 175 have STRs present and 52 of those are over-dense by a 15 percent criteria.

The decision to include a lottery came after the council adopted its new STR ordinance in December 2017. Prior to that, a lottery had been proposed but city officials opted out of using one to determine which applicants will receive future licenses in areas over-saturated with STRs after a special four-hour meeting was held with many STR owners opposed to it.

The statement released by STRONGpg last week read, “After a very civilized democratic process, our City Council approved an ordinance in December, 2017 that tightened up the rules on short-term rentals while allowing existing STR owners in good standing to continue operating.”

The suit asks for the city counsel’s decision to be reversed and that there be a permanent injunction to prevent any STR lottery, and that the City be required to pay reasonable litigation expenses, costs and attorney’s fees plus any other relief the court might deem appropriate. The statement also noted that since its inception, the Pacific Grove’s STR program has delivered over $4 million in tax revenue, a significant amount to a town that receives two to three times less sales tax revenue than nearby cities Carmel and Monterey, which don’t allow short-term rentals.

On Monday, City Manager Ben Harvey said that while the City had not officially been served, he was aware that the lawsuit had been filed and that city staff had been in communication with the opposing counsel. He also noted that City Attorney David Laredo will be representing the City.

Meanwhile, Harvey said that the City is still proceeding with the STR lottery, which he said is expected to take place by the end of the month and will focus on over-dense blocks.

“There’s something around 50 over-dense blocks – we’ll be taking those blocks that are over-dense and bringing them below 15 percent,” said Harvey.

As of March 30, Harvey also noted that 256 STR licenses were renewed while 33 were voluntarily not renewed and two weren’t renewed pending a review by a hearing officer. The STR cap is 250.

“Once we get below the cap of 250, people are able to apply for a new short-term rental but the new ones can’t have another STR within 55 feet all around,” explained Harvey. “But for all existing ones, council decided they needed the blocks to have no more than 15 percent of STRs.”

Meanwhile, the public action committee Pacific Grove Neighbors United, which is behind the proposed measure to stop short-term rentals from existing in the city, has said that it has collected 130 percent of the needed signatures to get the measure on the November ballot.

 

 

Harvey said that initiative could also affect the future of short-term rentals in Pacific Grove.  “…So that could come into play as well,” said Harvey. “They would then need to present that to the City and then send it over to the county and then do analysis and then it would go to the ballot,” said Harvey.

 

Said Luke Coletti, one of the three who proposed the initiative measure, “Pacific Grove’s STR ordinance has created chaos in our neighborhoods and now lawsuits for the city. Our grassroots ballot initiative that prohibits most of these vacation rentals, is th only way to restore order.”