Bernard’s San Ramon Valley Blog

JOINT PRESS RELEASE
Received on 2/29/08

Parties Jointly Announce Settlement of SROG’s Lawsuit Against the City of San Ramon, Challenging the City’s Approval of the San Ramon City Center Project

The City of San Ramon, Sunset Development Company, and San Ramon for Open Government (“SROG”) jointly announced the settlement of SROG’s lawsuit against the City, challenging its approval of the San Ramon City Center Project and the accompanying Environmental Impact Report.  The City Center Project, which was unanimously approved by the City Council in December, will feature a new City Hall, library, transit center and police headquarters, along with residential living, office space, retail, and entertainment components.  The settlement agreement will also result in SROG dropping two referendum petitions it has been circulating to challenge development agreement amendments for the Project. 

SROG had sued the City alleging that the approval violated the California Environmental Quality Act and the City’s 2020 General Plan.  The settlement calls for Sunset and the City to make a number of changes to the project, including: reducing the heights of the project’s tallest buildings to no more than ninety feet (resulting in reducing the office buildings from seven to six stories), reducing the condominium buildings adjoining the Iron Horse Trail to a maximum of seven stories, and taking several steps to reduce the project’s traffic and air quality impacts. 

The project changes also include reducing the project’s total office space and associated parking by almost fifteen percent, expanding the three-year trial free shuttle program to cover both the City Center and the rest of Bishop Ranch, scheduling express shuttle buses to and from BART for both AM and PM commute hours.  In addition, the City and Sunset will support a pedestrian/bicycle-accessible flyover crossing busy Bollinger Canyon Road at the Iron Horse Trail.

The settlement also requires all City Center buildings to be “LEED – Silver” certified – a high level “green building” standard that promotes sustainability and will reduce the project’s environmental footprint.

Along with the project changes, the settlement commits the City to moving forward with enacting a local ordinance requiring that any future buildings outside of City Center in excess of five stories go on the ballot for voter approval.

SROG spokesperson Jim Gibbon stated, “We were concerned that this project, while desirable in some respects, was going to overload city streets, block out regional views, and set a bad precedent for the future.  While the changes that Sunset and the City have agreed to do not fully address all the issues that prompted the lawsuit and the referendum petitions, we think that the changes do make it a much better project.”

Sunset’s President, Alex Mehran, is pleased that the project will move forward on schedule.  “We have always felt we have proposed a project that the citizens of San Ramon want to see happen.  We’re pleased that this settlement will allow the project to move forward on schedule and San Ramon will realize its longstanding goal of having a downtown.”

San Ramon Mayor H. Abram Wilson echoed the City’s satisfaction with the settlement.  “We think this settlement is a win for everyone concerned, especially the people of San Ramon, who will get the City Center they have wanted for so long.”

This is a subject I have covered in the past but one that a number of people have recently raised again which is why I am revisiting it this month.

This is a summary of the Taxpayer Relief Act of 1997 (Section 121) which repealed and replaced the tax deferral provisions contained within Section 1034 of the Internal Revenue Code.

Generally, a Taxpayer can sell real property held and used as his or her primary residence and exclude from gross income up to $250,000 in capital gain taxes if the Taxpayer is single and up to $500,000 in capital gain taxes if the Taxpayer is married and filing a joint income tax return.  The Taxpayer is required to have lived in the real property as his or her primary residence for at least 24 months out of the last 60 months (two out of the last five years). 

Note that the 24 months do not need to be consecutive and there are certain exceptions to the 24 month requirement when a change of employment, health, or some other unforeseen circumstances has occurred.

Section 121 is effective for dispositions of real property held as a primary residence after May 7, 1997.  Taxpayers can complete a 121 exclusion no more than once every two years.

Taxpayers should carefully monitor the amount of “built-up” capital gain in their primary residence and may want to seriously consider selling their primary residence before the capital gain tax liability exceeds the $250,000 or $500,000 limitation.  The Taxpayer’s capital gain tax liability in excess of these exclusion limitations will be taxable.  A sale of the primary residence would preserve the tax free exclusion of the capital gain and would allow the Taxpayer to acquire another primary residence and start all over again.

Special legal, tax and financial planning is needed in circumstances where a Taxpayer already has a significant capital gain tax liability in excess of the $250,000 or $500,000 exclusion limitation.  For example, the primary residence could be converted to rental or investment property and then sold as part of a 1031 exchange after it has been rented for a sufficient amount of time in order to demonstrate the Taxpayer’s intent to hold the property as rental or investment property.  This would allow the Taxpayer to dispose of his or her primary residence, defer all of the capital gain tax liability, and diversify and allocate the capital gain tax liability pro-ratably over a number of rental properties clearing the way for further financial, tax and estate planning opportunities.

The tax liability calculation is not so simple when  divorce or the death of a spouse occurs during the period of home ownership. If you have any doubts about how any capital gains you make will affect your tax liability, you are strongly recommended to discuss the implications with your tax advisor.

This is my first post although I am far from new to Blogging. From this point on, this will be my main Blog and it is effectively replaceing my previous blog hosted by RealTown / Internet Crusade.

My RealTown Blog can be accessed at http://www.realtown.com/bernardg/blog