What's at stake:
Planning in Fresno has fallen into chaos over $50 million in industrial land.
The Fresno City Council on Thursday delayed a long-awaited land-use plan for southeast Fresno by 90 days — overriding the objections of the councilmember who represents the area — in a move that keeps alive a controversial effort to rezone 55 acres in one of California’s most polluted neighborhoods back to industrial use.
The delay vote happened after the council unanimously tabled the Elm Avenue rezone after learning that the state Attorney General’s office intervened in the matter a day earlier, according to Arias, meeting with City Attorney Andrew Janz and warning the city it would face litigation if the 55-acre rezone were approved.
Councilmember Miguel Arias, who represents the southwest Fresno district where the Elm properties are located, said the AG’s posture shifted from monitoring to direct opposition. In an interview Thursday after the meeting, Arias said the AG’s message was blunt: approve the 55-acre rezone, and the state will sue.
“The AG goes from ‘I am monitoring’ to ‘we’re going to intervene,'” Arias said. “You have to press pause and re-evaluate.”
In 2022, Bonta called a nearby 32-acre rezone “likely unlawful” yet filed no legal challenge.
The AG’s legal argument has been years in the making. The California Air Resources Board has spent roughly three years building the evidentiary case against the rezone, sending multiple letters to the city outlining its concerns about returning industrial capacity to a neighborhood already burdened by some of the worst air quality in the state.
“Shady shit…we don’t believe you guys”
But while the rezone was shelved 7-0, the more consequential vote on Thursday was the 4-3 decision to postpone the Central Southeast Area Specific Plan — a 2,000-acre community blueprint for one of Fresno’s most underinvested areas around Belmont Avenue — until June 18.
The two items have become informally joined at the hip over the past several weeks, connected by a provision of state law that the landowners of the 55-acres – including Phillip Oates, a minority owner of the Sacramento Kings — need to make their rezone work.
Under SB 330, the Housing Crisis Act, the city cannot approve a rezone that removes housing capacity without simultaneously approving another action that adds enough units to offset the loss.
The industrial landowners contend the specific plan for southeast neighborhoods generates surplus housing units sufficient to cover their rezone, but only if the city adopts their consultant’s methodology for counting existing capacity. The city calculates the plan adds about 2,939 units; the landowners’ consultant says 3,543. Neither figure has been independently verified.
The landowners, whose properties are valued at roughly $47 million, have spent more than three years and significant legal resources pressing their case. Earlier this week, they filed a $100 million claim against the city.
They previously paid the city more than $64,000 to conduct an environmental review on a property within the Central Southeast plan area — work intended to generate the housing units needed to satisfy SB 330 — but the city has not completed that review in nearly two years, a delay the landowners cite as evidence of bad faith.
And on Thursday, a new wrinkle emerged.
Arias said city staff informed the council that they had recalculated the number of housing units the Elm rezone would displace — and arrived at a dramatically lower figure. Under the previous calculation, the rezone would have eliminated roughly 3,500 units of housing capacity, requiring the CSASP to generate at least that many to offset the loss. The new staff calculation, Arias said, puts the threshold at just over 800 units.
The reason: staff had originally calculated the displacement before the city adopted a mixed-use development overlay that increased density allowances in the area. Under the updated formula, the units attributable to the Elm properties are far fewer.
Arias said in an interview the new numbers are too good to be true.
“I think there’s shady shit behind the scenes happening,” he said.
“We basically said to staff, we don’t believe you guys,” he added. “So we’re gonna bring in an outside party to come and basically double, triple check this.”
New plan for Belmont area delayed
The 4-3 vote to delay the CSASP came at the explicit request of the industrial landowners pursuing the Elm rezone. Their Sacramento-based attorney at Downey Brand demanded in a March 13 letter that the city postpone both items for 90 to 120 days. Council Vice President Tyler Maxwell made the motion to continue the CSASP to June 18. Maxwell was joined by Mike Karbassi, Nick Richardson and Council President Nelson Esparza.
Councilmember Brandon Vang, who represents much of the CSASP area, opposed the delay.
“My position is, I am ready to move forward with this item,” Vang said. “I believe the people in southeast Fresno are ready.”
Arias and Annalisa Perea also voted no.
By delaying the CSASP, the council majority preserved the possibility that the two items could eventually be heard together — the landowners’ preferred scenario, but not Vang’s, who represents the area.
Karbassi, who resigned as council president last week to focus on his campaign for Fresno County supervisor, said the closed session left him unwilling to take chances.
“Based on the discussion and the analysis in closed session, I think anything short of that 90-day mark could potentially put us at legal risk,” Karbassi said, adding that he was being “very, very conservative” in light of a recent $15 million ruling against the city in a racial discrimination lawsuit.
Arias was more pointed about the delay in his post-vote interview with Fresnoland, suggesting the timeline had less to do with legal caution than with election politics. Karbassi is running in a June primary for county supervisor, and Arias said Karbassi wanted to push the hearing past that date.
“I would have supported hearing it May 21,” Arias said, “but Mike wanted to hear it after the election.”
Karbassi did not immediately respond to a request for comment.
Rezone still alive
The rezone has drawn opposition from nearly every corner of Fresno’s political establishment. Mayor Jerry Dyer’s administration has recommended denial. City planning staff and the planning commission both recommended denial. CARB has spent years building a legal case against it. And now the Attorney General has signaled he will litigate.
Adding to the legal thicket, Arias said the city received a separate challenge on Thursday from a group Green Alliance of Southeast Fresno which argues that an environmental review needs to be conducted for the Central Southeast area.
“Big picture,” Arias said, “we had the applicant challenging us for his own reasons. We had the residents opposing it. Then we had the AG basically saying, ‘We’re monitoring.’ As of today, we have the AG saying, ‘We’re opposed to it, and we’re gonna litigate you guys.’ And we have an additional group saying the EIR you did for the southeast part is not sufficient.”
The CSASP is scheduled for June 18 at 3:55 p.m. No date has been set for the Elm Avenue rezone.
