Press Democrat: Spirit Residential Aborts Mill Valley Housing Project for Elders

A developer with an approved plan to build a five-story residential care center with 106 apartments in unincorporated Mill Valley has withdrawn the project.

“Spirit Residential has determined that the project may ultimately undergo material changes from the configuration reflected in the current project approval,” Ali Shabahangi, a company manager, wrote in a May 29 letter to the Marin County Community Development Agency.

“As a result,” Shabahangi wrote, “Spirit Residential does not believe it would be prudent or efficient to continue relying on an approval that may no longer correspond to the project ultimately pursued.”

Shabahangi added that potential changes under consideration might include “modifications relating to design, phasing, financing structure, density, operations, ownership structure, or other development components.”

Contacted by phone, Shabahangi declined to elaborate on Spirit’s future plans.

The project in Strawberry was approved ministerially in December without review by the Marin County Planning Commission or Board of Supervisors. On Jan. 1, Scott Arwin, an investment adviser who lives near the proposed building site at 70 N. Knoll Road, and Tiburon Ridge Neighbors, a group of residents and property owners in the area, sued to block the project.

The suit asserts that the site provides habitat for protected species and that the project fails to comply with the California Environmental Quality Act. The suit stated that 84 vertebrate species have been identified as inhabiting the site, including 20 with special status.

Responding to Shabahangi’s request, Megan Alton, a county planner, wrote, “Please note that because the approval decision is hereby void, any future development on the site would be subject to all applicable entitlement approval requirements, including as necessary a new application that would be subject to the regulation and processing procedures applicable at that time.”

Alton added that the voiding would not invalidate Spirit Residential’s obligation to defend and indemnify the county with respect to any legal challenge to the project approval, “including but not limited to the pending legal action referred to as Tiburon Ridge Neighbors v. County of Marin.”

“I’m ecstatic,” said Linda Johnson, a member of Tiburon Ridge Neighbors. “I would say this is the result of a good lawyer and lots of money. Our neighborhood group made the choice that it was worth it. They’re destroying what everybody comes to Marin for: open space, privacy and nature.”

In an email informing the association members of the win, Arwin, who led the fight, wrote, “This outcome did not happen overnight. It is the result of sustained, multi-phase work by our group over many months.”

The email said the victory might be only temporary, but the voiding of the approval would cause major delays and expense for the developer to continue, and would put the association in a strong position to recover attorney fees.

Contacted by phone, Arwin emphasized the impact the project would have had on noise and traffic in the neighborhood. He said by the developer’s own estimate, the project would have resulted in 300-some vehicles traveling down neighborhood streets every day past 20 homes.

The 150,000-square-foot project was to have been built at the base of a hill designated in the Marin Countywide Plan as “ridge and upland greenbelt” because of the “visually prominent ridgelines.” Restrictions on building in the “ridge and upland greenbelt” were eliminated in the county’s new housing element, which was approved by supervisors in January 2023.

The building would have been more than 63 feet tall with a 72-vehicle underground garage, and would have required extensive grading. It would have consisted of 71 independent living apartments with kitchens and 35 assisted living/memory care suites without kitchens. It would also have included a bistro, dining rooms, activity rooms, a theater, a salon, a library, a music room and staff rooms.

The project was approved ministerially because it was included on a list of about 140 preferred development sites in the county’s housing element. Supervisors chose to make all sites included on the list subject to ministerial approval.

Theoretically, such projects still have to conform with the county’s form-based code. This list of strictly objective building standards was created in hopes of getting developers to build smaller structures instead of fewer, larger buildings.

Under state housing density law, however, housing projects for seniors are eligible for waivers from county requirements. The law typically only applies to projects providing a certain amount of affordable housing, but even high-end senior housing projects, such as the one proposed at 70 N. Knoll Road, are also eligible.

Spirit Residential had received about 50 waivers, including for height, scale, parking, retaining walls, grading slope, street widths, civic space and removal of habitat for protected species.

Nevertheless, Richard Drury, the attorney who filed suit on behalf of Tiburon Ridge Neighbors, believes it was the legal action that caused Spirit Residential to drop the project.

“I think we’re correct,” Drury said. “They violated the county’s general plan. They violated the form-based code requirements. They violated state density bonus law. There are just a whole host of claims.”

Soon after the suit was filed, an attorney representing Spirit at the time said he would seek an order requiring the litigants to post a $500,000 bond to cover the developer’s costs and damages if the project was delayed by the lawsuit. Drury said that never happened.