South Pasadena takes a pass on development.

Wayne Ratkovich took the hint.

The LA. developer had already spent two years working with the city of South Pasadena on a proposed mixed-use, town square-type project when conversations with three incoming City Council members stopped him dead in his tracks.

Within two months, Ratkovich, whose previous projects included the renovation of the Wiltern Theater and downtown's Oviatt Building, had pulled his $15 million project off the table.

"It was pretty clear that they wanted to impose some constraints that had not previously been discussed," said Ratkovich, president of Ratkovich Co. "No one can do business when you have conditions changing as rapidly as that"

Ratkovich's change of direction was illustrative of a city, tucked between Pasadena, Alhambra and L.A.'s Highland Park area, that has put away the welcome mat for at least some developers. Having elected three new councilmembers in March, South Pasadena is becoming even more protective of its small town feel.

The results of such vigilance have been mixed.

In July, South Pasadena lost a lawsuit from a local developer who charged that an April moratorium on multi-tenant retail developments and the city's attempt to change parking requirements on a previously approved project were illegal.

The city was ordered to pay $111,000 in attorney's fees for the developer, HFP LLC, which is attempting to build a 7,000-square-foot retail project at the northwest corner of Huntington Drive and Fremont Avenue.

Anti-business message

Last month, the council appealed the July 25 Superior Court decision, in which Judge Dzintra Janavs charged that the moratorium violated the Ralph M. Brown Act because it was previously discussed in a private session. The judge also ordered-that the parking requirements for the Huntington Drive project, which was approved by the Council in November, were valid and that the city must process HFP's building permits.

"The council members are sending a strong message of anti-business and anti-development," said Paul Anderson, of counsel with Greenberg Glusker Fields Claman Machtinger & Kinsella LLP, who represents HFP.

The council's attempt to challenge the Huntington Drive project, which includes a Starbucks and KFC, was based mostly on fixing a parking-related loophole in the city zoning code, according to Councilman David Margrave. Because a retail center with a coffee shop and restaurant is classified as mixed-use, the parking requirement is less than a purely retail development.

"It was a mistake (to approve the project) and the previous City Council knew it," said Margrave, who was elected in March. "All we're asking for is the planning commission to study the project and report whether a change needs to be made."

The council is also challenging the Brown Act charge on the grounds that the moratorium was officially adopted in a public meeting. "(City Council) could deliberate the question of the moratorium in a closed session, so long as the moratorium was adopted in public," said attorney Michael B. Montgomery, who with Charles R. Martin, is representing the city.

Earlier, Ratkovich Co. had pulled its project as a result of conversations the developer had with new council members Margrave, Odom Stamps and Mike Ten. That development, planned for the parking lots bordered by Mission and Oxley streets and Fremont and Mound avenues, was to have included 120,000 square feet of retail, office and residential space.

There's no secret as to what's drawing developers. In July, a Gold Line station opened at Mission Street and Meridian Avenue, part of a downtown district that has remained largely unchanged for decades. Meanwhile, South Pasadena's median home price last year reached $518,000, 23 percent more than 2001 and nearly double the county median, according to DataQuick Information Services.

"It's almost better than Pasadena," said Steve Notaro, president of Torrance-based

DECOMA Industries, which just completed an 18-unit loft condominium project on Fremont Avenue at the site of an abandoned warehouse. Notaro alluded to the city's school system and Gold Line proximity among its draws. "You still have a small town feel, but you're close to the big city," he said.

'World-class NIMBYs'

The preservationist stance is nothing new for a city that trumpets its commitment to historic structures and its long-held opposition to the extension of the Long Beach (710) Freeway into its borders.

"Historically, the City Council has given great credence to the homeowners and renters immediately adjacent to properties in transition zones," said Councilman David Saeta, who has lived in South Pasadena his entire life and who cast the only vote against the April moratorium. "We have world-class NIMBYs."

That includes several council members who are long-time residents. Margrave owns Morrow & Holman Plumbing, which has operated in South Pasadena for more than 30 years. Stamps is an architect who is active with the cultural heritage commission; Ten has lived in the city for almost 40 years.

Margrave denies the council was against any new retail development, but, when discussing the Ratkovich proposal, he acknowledged the attempt to preserve much of the existing business environment.

"(Ratkovich) wanted to build a grandiose project that would be a moneymaker for him" he said. "We don't want to build a huge facility and have it not being used, and we don't want to drive out businesses that have been here 30, 40, 50 years."

But Notaro says the city was no more difficult than any other in granting approvals, noting that the government's small size made it "a pleasure to work with." His company has sold all but one of its lofts.