Del Mar faces an immediate legal obligation to rezone privately owned North Bluff and South Stratford properties for housing after the state Fairgrounds board killed the city's affordable housing deal, according to documents submitted to the City Council's Tuesday, Aug. 25 special closed session.
Attorney Brooke Miller of Sheppard, Mullin, Richter & Hampton, representing North Bluff property owner Carol Lazier, warned in a Monday, Aug. 24 demand letter that the city risks civil penalties under Senate Bill 1037 for noncompliance with state housing law, and fines of at least $10,000 per unit if it denies a Builder's Remedy housing project.
The legal chain reaction began Tuesday, Aug. 18, when the 22nd District Agricultural Association voted 5-3 to terminate its housing feasibility agreement with Del Mar. Board member Ted Miyahara made the motion, questioning whether the City of San Diego would annex the RV Park site and allow Del Mar to receive state housing credit. Board members Phil Blair, Frederick Schenk and Lisa Barkett voted against termination.
Mark Arabo recused himself.
That agreement was the backbone of Program 3A in Del Mar's certified 6th Cycle Housing Element, which covers 2021–2028 and requires the city to plan for 175 dwelling units, including at least 113 for low-income households, according to city records.
State warned city twice
The California Department of Housing and Community Development told Del Mar in letters dated Dec. 11, 2024, and Jan. 15, 2026, that termination of the Fairgrounds agreement would trigger Program 1E, the contingency plan requiring rezoning of nine candidate parcels totaling 17.33 acres on the North Bluff and South Stratford to the city's Housing Element Implementation Overlay Zone. That zone allows housing "by right" at 20–25 dwelling units per net acre with staff-level approval and no public hearing.
Miller's letter argues the city must pause a separate "RM-North Zone" effort the council directed on May 19 for the 7th Cycle Housing Element. The city's own staff report called that approach "a different approach and circumstance than identified in the 6th Cycle Housing Element Program 1E," according to the demand letter.
Lazier pushes Seaside Ridge
Lazier, who owns 929 Border Ave., first submitted a preliminary application for her Seaside Ridge project in 2022. The nine-building, 259-unit mixed-income development would include 42 units for low- to extremely low-income households. Miller's letter calculates the site could accommodate up to 271 units under the overlay zone's maximum density.
"The City has already received clear direction from HCD and state officials on what must happen after termination of the Fairgrounds agreement," Lazier wrote in a personal letter to Mayor Tracy Martinez and the council, also dated Monday, Aug. 24.
The demand letter was copied to HCD staff, California Attorney General Rob Bonta's office, City Manager Ashley Jones and Del Mar's outside counsel Ralph Hicks.
Mayor Martinez on Friday, Aug. 21 sent a letter to the 22nd DAA board requesting a new hearing on the Fairgrounds housing deal, saying board officials circulated misinformation. She asked the board to reconsider at its Sept. 15 meeting.
No public action was expected from the Tuesday, Aug. 25 closed session. The city has not publicly responded to the Sheppard Mullin demand letter. No date has been set for the council to formally consider Program 1E rezoning in open session.
