La Palma buys property for $1.5 million, nixing proposal to build 11 apartments on lot – Orange County Register

Community opposition to an 11-unit apartment complex on less than half an acre in La Palma has prompted the city to instead purchase the property for $1.5 million, nixing the project.

Along with selling 5062 La Palma Ave., SMG Property Management agreed not to sue the city over a denial of the Villa De Le Palma development and to hand over design drawings, engineering plans and related documents.

The property, which was bought for $800,000 in 2015, records show, and on which a single-story house sits, was appraised in an agreement with SMG for the purchase at its highest possible density – 11 units.

The $1.5 million will come from the city’s unassigned fund balance, money set aside for expenses.

City staffers expect to close escrow in September.

In addition to the purchase, the City Council extended for 10 months and 15 days a moratorium prohibiting the approval of development entitlements and permits that could birth similar projects.

Councilman Gerard Goedhart said “it’s a shame” the 0.4-acre site was rezoned in 2012 to accommodate up to 30 units per acre, making way for the complex proposal.

“We are taking steps to prevent it from happening now and in the future,” he said.

The proposal, which included two affordable housing units and 30 parking spaces, was submitted to the city by the property owner in April

At a height of 36 feet, 6 inches, the building would have been the city’s tallest residential structure – and fourth-tallest building overall.

On June 12, the Development and Circulation Committee recommended denial of the project after hearing residents’ concern over the density, lack of open space and on-site parking.

City Manager Laurie Murray and the city attorney began negotiating a settlement with SMG Property Management later that month.

While acknowledging the need for more housing, Councilman Steve Hwangbo said La Palma, a 1.7-square-mile city, “is not like other cities in south county, where they can build those units and…

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