Litigation surrounding a plan to redevelop the storied El Rancho Inn in Millbrae continues, with hundreds of potential housing units stuck in limbo as the would-be developer claims the city is unfairly demanding millions in added fees.

The developer, Anton Development Company, introduced plans to build a 384-unit apartment building on the site in 2017. But after a zoning change reported to cost the developer upwards of $15 million, Anton Development in March sued the city, leaning on state housing laws in hopes of pushing the plan forward.

“There’s been a lot of new fees passed that makes the project not financeable, which makes it not buildable,” Andy Davidson, managing partner with Anton Development, said. “We’re trying to work with the city to break through that log jam.”

The developer contends it has jumped through every hoop presented by city officials and finished all the requisite tasks needed to complete the application, yet the city has still deemed the proposal “incomplete.”

But the city maintains it has clearly communicated its expectations, and other developers in similar situations have complied with the requirements set forth.

“Our dealings with Anton, and with every other developer has been consistent,” Mayor Ann Schneider said, who emphasized the city supports building more housing and pointed to more than 1,000 units recently approved.

Anton Development is now hoping state housing laws addressing the housing crisis will allow the project to proceed, and is seeking assorted amounts of cost recovery and financial relief. 

The California Housing Accountability Act limits a city’s ability to reject proposals for housing developments that satisfy general plan and zoning requirements. A recent decision in San Mateo found the city wrongly denied a housing development proposal by failing to meet the law’s requirements. 

The case “underscores the state’s dedication to these housing laws and the seriousness of them,” Davidson said, who added that though he feels their case is strong, their goal is “not to win the litigation, it’s to build the housing.”

Millbrae, a town of just more than 22,000 people surrounded by ever-expanding lucrative job opportunities, has grown little over the past 50 years, increasing its population by just 8% since 1970. Median home prices in the city recently jumped past $2.1 million. 

The El Rancho Inn, which remains open, has long been a landmark within the area, dating back to the ’50s with Mission Revival-style architecture and pool and bar. The window in the bar allows patrons to peer into the pool, which was featured in the 1983 movie “The Right Stuff.” But an environmental analysis of the project determined the site is not deemed historic, and according to the developer, “the site is underused, the buildings are ailing.”

Plans for the development called for 384 apartments ranging from studios to two-bedrooms spread across five floors. Nineteen of the units were to be set aside as affordable and 560 parking spots were included. The 7-acre lot was also to be split, with a new hotel featuring 200 rooms to be built at some point in the future.

The city has previously sought a guarantee that a new hotel would be built. The builder meanwhile claimed it cannot find an operator for the site until development entitlements are granted.

Positioned adjacent to San Francisco International Airport, Millbrae generates considerable revenue from its transient occupancy tax, which applies to hotels and short-term rentals.

City attorney Joan Cassman declined to comment on the ongoing litigation, saying only “it’s hard to talk about hopes and dreams.”

The city did hire special council for the case, attorney Barbara Kautz of Goldfarb & Lipman, Cassman said. The city held a closed session meeting on the matter earlier this week, and per court documents, a status conference is set for Nov. 16.

(650) 344-5200, ext. 105

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