San Luis Obispo Property and Business Owners Association, et al. v. City of San Luis Obispo, et al.

San Luis Obispo Property and Business Owners Association, et al. v. City of San Luis Obispo, et al., 25CV-0212

Hearing: Petition for Writ of Mandate – Phase I

Date: July 2, 2026

San Luis Obispo Property and Business Owners Association and Leslie Halls (Petitioners) filed a Verified Petition for Peremptory Writ of Mandate and Complaint for Declaratory and Injunctive Relief on April 3, 2025. The petition names the City of San Luis Obispo and the San Luis Obispo City Council (collectively, the City) as respondents, and Smart Share Housing Solutions as the real party in interest.

The parties agreed to divide the writ hearing into phases. The City presents the two issues in phase one as follows: “(i) whether a purported restrictive covenant limiting a portion of real property to a specific use has expired; and (ii) whether a public trust exists.” (Open. Brief, p. 2, ll. 11-13, emphasis removed.) Petitioners present the issues similarly as follows: “(i) whether the restrictive covenant in the grant deed has expired under the Marketable Record Title Act (‘MRTA’); and (ii) whether the property is held in a public trust that precludes the proposed residential development.”

The dispute concerns a proposed project which includes the addition of twenty homes on real property which is subject to grant deed in which the grantor deeded the property “with the request that the adobe and two adjoining wings that make up the old house, and the trees on that property be maintained by the city for park and recreational purposes.” (City Ex. A.) For phase one of the writ proceeding, the parties agreed to deem the quoted language a restrictive covenant and that the issue of whether that language in fact created a use restriction would be addressed in phase two of the proceedings. (Open. Brief, p. 6, ll. 2-5, p. 9, fn. 7; Opp., p. 7, ll. 19-21 [parties agreed to resolve factual issue of whether restrictive covenant exists in phase two].)

Although agreeing that a restrictive covenant exists for phase one, the City nonetheless argues “The phrase ‘with the request’ does not create a restrictive covenant.” (Reply, p. 3, ll. 9-10, ll. 11- 12 [“no restrictive covenant was created”], p. 4, ll. 1-14 [discussing rules of contract interpretation]. Petitioners likewise argue the evidence shows the intent to create a restrictive easement. (Opp., p. 7, l. 22-26 [“The evidence confirms the very existence of the use restrictions which are at the heart of this matter”], p. 9 [discussing rules of contract interpretation].)

The Court intends to incorporate the phase two issue of whether a restrictive covenant exists into phase one of the proceeding. The parties should come prepared to address that factual dispute at the hearing.

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