IF YOU LISTEN TO THE DEEP-POCKETED executives behind massive Playa Vista — a controversial minicity plopped by City Hall planners onto the Ballona Wetlands near Playa del Rey that has swamped Lincoln Boulevard and helped gridlock many Westside intersections — a stunning appeals-court ruling last week halting construction is merely an irritating hiccup.

But in 20 years of legal battles over the biggest residential construction project in city history, whose cheek-by-jowl, $3,000-per-month apartments have ushered in East Coast densities and tiny patches dubbed green space, last week’s decision by the California 2nd District Court of Appeal could wreak havoc on the extensive Phase Two. It couldn’t come at a more uncertain time for developers, or at a better time for Westsiders who hate the hulking, multistory community, as Southern California confronts an iffy housing market — and as some Angelenos begin to decry a crush of overbuilding citywide.

“The modifications are relatively minor,” sniffs Steve Soboroff, president of Playa Capital, pledging unequivocally that Playa Vista “will continue to completion.”

In fact, the 114-page brief written by the three judges on the Court of Appeal is anything but minor. The jurists didn’t just snatch away the keys for the bulldozers, handing the project’s opponents their biggest courtroom victory in roughly two decades. The three judges also ordered the city of Los Angeles to “vacate” long-standing approvals by the Los Angeles City Council for the second and final phase — and to decertify Playa Capital’s massive, multimillion-dollar environmental-impact report.

The court says that the EIR — years in the writing, and which contains hundreds of paragraphs that set off word-by-word fights between federal and local agencies, environmental organizations and politicians — must now “revise” analysis of land-use impacts, “discuss” better preservation at the site, and “identify” and “analyze” the disposal and environmental impacts of wastewater.

In other words, developer Playa Capital, for now, is screwed.

“The court stopped the development cold,” says Doug Carstens, an environmental attorney with the Santa Monica–based law firm Chatten-Brown & Carstens. “It’s a sweeping decision.”

Carstens worked as co-counsel at the trial that culminated in last week’s appellate ruling. At the trial last year, Los Angeles County Superior Court Judge William F. Highberger found that the city and Playa Capital followed proper approval procedures and that the environmental-impact report was valid. But the appellate court overturned Highberger’s decision last Thursday.

“People have been through a long, hard struggle,” says Carstens, “and they’ve been vindicated by the [state appeals] court.”

From the start, developers, environmentalists and journalists have described Playa Vista as one of the most expensive, highly studied and fought-over mixed-use projects in Los Angeles — with a price tag between $4 billion and $7 billion. After years of negotiations and studies, the 3,246-unit first phase of imposing condos, pricey apartments and $1.9 million homes with postage-stamp yards is nearly complete. The final phase — 111 acres of proposed housing, retail and office space dubbed “The Village at Playa Vista” — now sits at the red-hot center of the dispute.

BY NOW, THE TWO WARRING SIDES are sick of each other. Playa Capital Co. and the city are the defendants in the current lawsuit; the Ballona Wetlands Land Trust, Surfrider Foundation, city of Santa Monica, Gabrieleno/Tongva Tribal Council of San Gabriel and Ballona Ecosystem Education Project are the plaintiffs. Playa Capital has won most of the 19 or so lawsuits over the past 20 years. It wasn’t until 2005 that things stopped consistently going Playa Capital’s way. That year, environmentalists won a comparatively minor appellate-court decision forcing the city to someday fix a methane-gas removal system installed beneath the housing, which sits atop an ancient riverbed and pockets of potentially explosive gas.

Soboroff describes the environmentalists as a “small group of people” who are “extremists.” Rex Frankel, director of Ballona Ecosystem Education Project, counters that Soboroff is a “desperate man” who heads a project that’s “one of the biggest examples of corporate welfare in the history of Los Angeles.”

So when last week’s ruling was handed down, both sides grabbed for their glory. Playa Capital released a press statement touting the appellate court as having sided with “the city and Playa Capital on the vast majority of issues raised,” with Soboroff sniping, “Despite the professional project opponents, we remain confident that the Playa Vista vision will ultimately be realized.”

Frankel sent out a three-page missive the same day, declaring that “the court’s landmark ruling is a major victory for the citizens of Los Angeles, the environment, civil rights of Native Americans, and overall quality of life.” Frankel throws his own verbal jab, saying, “The court didn’t accept the developer’s masquerade about benefits to the public that didn’t actually exist.”

Indeed, the state appeals court was very specific in the three areas that went against Playa Capital and City Hall. Wrote the judges, “The misleading analysis of land use impacts, failure to discuss preservation in place of historical archeological resources, and failure to properly analyze wastewater impacts rendered the EIR as a whole deficient.” Those problems “collectively are not severable from the project as a whole. The City can achieve full compliance with CEQA [the California Environmental Quality Act] only by vacating the project approvals that were based on the certified EIR and revising the EIR to remedy these deficiencies. Only then can the City . . . grant the project approvals.”

“It’s a very thorough, well-supported opinion,” says Frank P. Angel, a highly regarded Santa Monica–based environmental lawyer, who is not involved in the case. “It requires definite measures that need to be followed up.”

Angel believes construction will be delayed several months, at a minimum, to fix the environmental-impact report and then guide it through a City Hall approval process that includes a public-comment period, planning-department hearings and council meetings — all potentially contentious and heavily lobbied. “A rush job on this EIR won’t do,” says Angel. “It’s not a matter of one or two months.”

Steve Soboroff, though, sounds like a man who doesn’t plan to satisfy the appellate court. “The idea of now going back and changing that plan is not good public policy,” he says, “and it’s not going to happen.” He ridiculed the appellate court as having merely “found some flint” — small issues in the EIR upon which to base their ruling.

Playa Capital, according to Soboroff, is looking at legal options that might release the project from construction limbo and push it forward. The developer is uncertain if he’ll seek an appeal with the California Supreme Court or request a rehearing with the appeals court. The city, according to City Attorney’s Office spokesman Nick Velasquez, is “still reviewing its options.”

Frank Angel and Doug Carstens, however, note that the state Supreme Court considers only 5 percent of the appeal requests it receives. And since the appellate court’s ruling was “not published,” meaning it doesn’t set any precedent for other cases, the Supreme Court will probably be even less interested in Playa Capital’s appeal. “It’s highly unlikely,” says Angel.

In the meantime, Soboroff says, Playa Vista workers will face job cutbacks, and Westside renters and buyers will have to wait longer for the Village’s new housing, slated to rise between the 405 freeway and what remains of the wetlands.

“[The Village] is for working people,” Soboroff says excitedly during a phone interview. “It’s work-force housing!” When Rex Frankel hears these things, he can only laugh. “For Soboroff to claim he’s for the workingman is ridiculous,” he says with a chuckle. “It’s a super-rich man’s community.”

It’s still unclear if the appellate court’s ruling means the end of development at Playa Vista. Frankel, of course, hopes so. Soboroff says no. Eric Sussman, a real estate expert and award-winning lecturer at UCLA’s Anderson Graduate School of Management, also thinks not, citing pressure for housing on the Westside and Playa Capital’s tenacity.

“There hasn’t been a roadblock they haven’t encountered,” says Sussman. “I doubt it would kill the project entirely. I would be very surprised.”

Then again, the environmentalists haven’t gone away either, and now they’ve had their first big victory in the court of appeals, following their more modest victory over methane control. Frankel, who’s been fighting the Ballona Wetlands battle for 22 years, calls it “karmic payback.” The momentum, so long on the side of Playa Capital, may be shifting.

LA Weekly