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Just before folks crowded into and overflowed out of the Council Chambers Tuesday night to voice pros and cons of a development across the street from Live Oak Park, another highly controversial development proposal was quietly and temporarily derailed. 

A threat of a lawsuit by neighbors who oppose Panoramic Interests proposed project at 2700 San Pablo Ave. and a reported counter threat of a suit by Panoramic Interests’ developer Patrick Kennedy was to be discussed by the City Council in closed session at about 5:30 p.m. Tuesday. (Litigation or the threat of litigation is one of the legitimate subjects a government body may discuss behind closed doors.) 

But a letter to the city attorney by Kennedy’s attorney Michael Durkee made the council discussion unnecessary and sent the project back to the Zoning Adjustments Board. 

“...after much thought and consideration, our client believes that a new approval process before the ZAB will allow (the developers) a better forum to address the points raised by the opposition and will clearly reveal both how their project complies with applicable law and why it will be a remarkably positive addition to the community,” according to the letter. 

Howie Muir, of Neighbors for Responsible Development, said his organization of neighbors living near the proposed project, were reacting to the fact that the ZAB had approved one project, but when the Neighbors appealed it, a new project went before the City Council and was approved. 

The council-approved project is a four-story 35-unit complex that has four live-work units and retail on the ground floor. A development with 48 units, no live-work, the entire ground floor as retail and more parking spaces had been approved by the ZAB. 

Muir said, in the lawsuit, the Neighbors would have argued that, since the project presented to the City Council was a new proposal, it needed a fresh environmental study under the California Environmental Quality Act. 

In an interview Tuesday, Kennedy said although the lawsuit “lacks merit,” he would rather take his project back to ZAB than face a protracted lawsuit. “I want the record to show that the impact on the environment is less significant,” Kennedy said. 

Councilmember Dona Spring said she was happy the project was going back to ZAB. “I think there is a chance for modification,” she said. 

Neighbors have consistently said four stories is too high for the area, while Kennedy has argued anything less would make it infeasible for him to build. 

“I’m feeling fairly elated,” Muir said.