Potala Village Developer Sues City Over Moratorium

The developer of the controversial proposed Potala Village apartment complex on Lake Street filed a lawsuit against the City of Kirkland Thursday for its twice-extended moratorium on development in areas with the site’s zoning category.

Lobsang Dargey and his wife, Tamara Agassi Dargey, along with the company Potala Village Kirkland LLC, filed the suit in King County Superior Court (see attached PDF file). It alleges that “The City’s police powers do not extend to a prohibition on development within the BN zone nor has the City provided timely findings of fact that would justify the perpetuation ofthe moratorium.”

The site is one of only two in Kirkland with the “BN” or Neighborhood Business zoning.

The proposal by Dargey Enterprises of Everett would create a 143-unit apartment complex -- originally planned for 181 units -- across two lots on scenic Lake Street at 10th Avenue South. In November, the council unexpectedly adopted an emergency 60-day moratorium to delay the project after angry neighbors stridently expressed concerns about the number of units planned and the project’s impact on traffic, property value and the scenic lakefront neighborhood, which is marked by some of Kirkland’s signature shoreline parks,, and.

In December the council extended the moratorium for six months, to allow the Planning Commission to review the site’s zoning in the city code and its use category in the Comprehensive Plan, and against the protest of an attorney for Dargey Enterprises.

At the May 1 meeting, the attorney, Duana Kolouskova, noted that the moratorium was enacted specifically to stop the Potala Village project and said extending it would violate state law.

“The vast majority of public comments are not in regard to the BN designation” but “to Potala Village,” she noted. “The BN zone has been in place for years. There is no crush of permit (applications) that would warrant a moratorium. The council can continue to require the Planning Commission to review this code without a moratorium .... This moratorium is an improper use of the city’s powers.”

City Attorney Robin Jenkinson said Friday morning that the city would be able to talk more about the lawsuit once it has prepared a legal answer. "I'm not in a position to comment on litigation. We're reviewing it and evaluating it," she said. "We will be filing an answer."

Chuck Pilcher, a Lakeview Neighborhood resident and member of the group opposing Potala Village at its current planned density, said he was disappointed the developer is not willing to work through the process. But he said the opponents were aware that a lawsuit was a possibility, and at least it is now out in the open.

"It strikes me as a little premature," Pilcher said. "They claim the city has not done the work, but the moratorium is to allow the Planning Commission to finish its work.

"He's (Dargey) continually saying 'I'm a nice guy, I want to work with folks.' We've told him density is the issue. We want the property developed, but the size of it needs to fit the area."

For previous Kirkland Patch stories on the project, click here.