Front Page  »  

Multi-plaintiff lawsuit planned against San Luis Obispo developer

October 14, 2024

By KAREN VELIE

Owners in a community of new homes with alleged structural defects, including leaking windows, black mold, doors that don’t shut properly, huge holes in walls and flooding issues signed up to participate in a multi-plaintiff lawsuit against the builder of a large development in San Luis Obispo.

Several weeks ago, attorneys with the Los Angeles-based law firm of Engstrom, Lipscomb, & Lack met with homeowners in San Luis Ranch, a large mixed-use development. Several of the attorneys helped victims from Hinkley and Kettleman cities in a case made famous by the Erin Brockovich story.

More than a dozen homeowners have already retained the firm, which is working on a contingency basis.

Located across from Laguna lake, San Luis Ranch is advertised as a neighborhood that “embraces the natural relationship between farming and sustainable, healthy living.” The picturesque homes sit a few feet from neighbors with walking trails winding behind.

Despite the appearance, many of the homes have serious structural defects. Several new homeowners say issues with mold and rodents have created health hazards, issues they claim Coastal Community Builders and the City of San Luis Obispo appear to be ignoring.

The question is not how did the homes pass inspections, but were the homes inspected?

One of the plaintiffs, Gina Biegel, closed on and moved into her home in Dec. 2021. The home did not have a certificate of occupancy until Jan. 18, 2022. The certificate certifies that a newly constructed residential building has been inspected for compliance with the California Building Standards Code and local ordinances.

Even more concerning is the inspection dates city staff provided. For example, staff reports someone completed a sprinkler and a hydro test at Biegel’s home on Jan. 18, 2022, a day that no one from the city was at her home, Biegel said.

For decades, San Luis Obispo Councilwoman JanMarx appears to have had a love-hate relationship with the former Dalidio Ranch, now known as San Luis Ranch. In 2000, Marx helped launch a political campaign to stop Dalido’s proposed project, which included 60 residential units, arguing it should remain farmland.

And while Marx claimed she was part of a grassroots effort to protect farmland, state regulators later determined the campaign was funded by a pair of downtown developers working to stop competing development.

In Oct. 2010, the California Fair Political Practices Commission levied $80,000 in fines against developers Tom and Jim Copeland, and banker David Booker for committing 16 campaign violations in their secretive battle against Dalidio’s project.

The three-year FPPC investigation into the funneling of cash and gifts to the campaigns to stop Dalidio’s proposed development revealed Marx was part of the illicit effort.

In 2013, Dalidio abandoned his plans to develop his farm, which he sold to Gary Grossman of Coastal Community Builders.

Unlike Dalidio’s project, Grossman’s planned development consistently overcame regulatory hurdles. Previously, the San Luis Obispo County Airport Land Use Commission set limits restricting the plans of developers, like Grossman, who sought to build high-density housing on the city’s southern edge.

The SLO City Council voted unanimously in 2014 to instruct staff to begin working on development agreements with Grossman, with Mayor Marx saying she did not want to rehash the controversy.

On Jan. 13, 2022, Marx and her husband Steve purchased a home in the San Luis Ranch development for $707,000. Marx, who has not joined the proposed multi-plaintiff suit, said her “house is just wonderful.”

Because we believe the public needs the facts, the truth, CalCoastNews has not put up a paywall because it limits readership. However, we are seeking qualification as a paper of record, which will allow us to publish public notices, but it requires 5,000 paid subscribers.

Your subscription will help us to continue investigating and reporting the news.

Support CalCoastNews, subscribe today, click here.

 


Loading...
Subjects:         
Related:


24 Comments
Inline Feedbacks
View all comments

I purchased a home this year and also went through the process with my daughter. Granted neither house was brand new like this. However, what I observed was both lenders never stepped foot into the houses, both realtors did a disclosure called an agent visual inspection and noted obvious defects such as fogged windows, rusty pipes under sink etc. They were clear that they were not home inspectors and that we should hire a professional home inspector, which we both did. Seems to me these issues should have been caught by a home inspector and/or the city building inspector. Maybe they did not obtain home inspections because they assumed everything would be fine because it was new construction being inspected periodically throughout the build process by the city inspectors?


3

PFdidit, it sounds like you had good folks on your side. My understanding is that purchasers were told by CCB that they could not be represented by a buyer’s agent and could not conduct home or termite inspections. For experienced buyers, that might have been a red flag, but as you say, they may also have trusted that, being new construction, it wasn’t necessary.


2

Wondering when we were going to see all that mayhem come to light? Thank you Karen! I can’t imagine, moving into a brand new home, just to find it has several problems. Do you think Jan Marx got the perfect house? Or is not being honest?


16

I’m looking forward to the next story to come out in the saga of this development about Cal Poly purchasing the so-called “workforce housing” portion, which will supposedly kick out the “workers” to replace them with Cal Poly people.


18

Still trying to understand how shittily built homes tie in with a former SLO mayor. The developers cut costs by hiring inexperienced builders. This is the go-to method for most developers. These guys don’t give a rat’s arse about quality. They’re off to the next town.

The lack of oversight falls on the current city building inspectors and managers. Oh, might as well throw the money-grubbing realtors and loan officers under the bus, too.


13

One plaintiff at least says that they were told they could not be represented by a realtor and had to use Grossman’s lender. Sounds like if there was realtor money grubbed it was in-house with Grossman’s people.


10
1 2