Seal Beach Home Plan Is Voided : Land use: The city’s state-required housing plan was invalid when permits were issued for a 329-unit development, so the developer must start over, a court commissioner rules.

SEAL BEACH —  An Orange County Superior Court commissioner dealt a major setback Friday to Mola Development Corp.’s four-year campaign to build a $300-million residential project on this city’s last stretch of open land.

Expanding on a ruling made last week, Commissioner Ronald L. Bauer declared that because Seal Beach’s state-required housing plan was invalid when the city issued land-use permits to Mola in October, the 329-unit development’s entire approval is invalid.

Last week, Bauer ordered the city to stop issuing new residential building permits until the city’s housing plan is updated. But Friday’s ruling took that a step further by saying his order also applies to previously approved projects.

Surprised city officials said they will consider appealing. But for now, the decision means that Mola will have to go through the entire approval process--with new public hearings and City Council votes--before work can begin.

Ironically, the ruling comes right after the California Coastal Commission’s decision Thursday to give final approval to the project’s wetlands restoration plan, which was to have been the last step in the approval process. Mola officials said after Thursday’s approval that they intended to break ground by summer.

Mola officials could not be reached for comment Friday.

“I’m very upset about this decision,” said City Councilwoman Joyce Risner, who represents the district in which the single-family development is planned.

“I think a reasonable judge would have said: ‘Keep all these things on hold and adopt your housing element. Then you can determine whether these approvals are in compliance with your plan,’ ” Risner said.

The ruling, in a suit filed against the city last fall by the Wetlands Restoration Society, was applauded by state housing officials.

“This is a great step,” said Travis Pitts, deputy director of the state Department of Housing and Community Development. “This gives the housing element some clout. In my opinion, this ruling will have a major impact on cities in the area.”

California law requires that the housing element of each city’s general plan for residential and commercial development be updated every five years. Seal Beach’s plan has not been updated since 1982.

If Bauer’s decision is upheld by other courts, it could mean that cities that allow their housing plans to lapse will be open to court challenges, under which development agreements, building permits, variances or zoning changes could all be invalidated, Pitts said.

According to state officials, the ruling may at least encourage more cities to comply with the state mandate.

According to a December survey by state housing officials, 15 of Orange County’s 29 cities, and 30% of all California cities, have failed to meet state requirements on their general plan housing elements.

Restoration Society attorney Jonothan Lehrer-Graiwer said Mola will have to wait until the city has updated its housing plan before reapplying for land-use permits. City officials have said they will try to adopt a new housing plan by May.

Bauer said Friday that “no prior case explicitly resolves the issues here presented” but that appellate opinions in similar cases have supported the invalidation the city’s October approval of the development.

Wetlands Restoration Society Vice President Galen Ambrose hailed Friday’s decision as “a complete victory” that opens the way for his group to keep Mola from building on a 105-acre wetlands portion of the Hellman Ranch property.

“The plan now is to win enough council seats (in the upcoming March elections) so that when the Mola proposal comes back through town we can take a fresh look at it,” Ambrose said.