By Joshua Molina, Noozhawk Staff Writer

Attorneys for SIMA Management have sent a letter to Santa Barbara Mayor Cathy Murillo alleging that the COVID-19-related rent moratorium for commercial tenants is a violation of the U.S. Constitution, and amounts to an illegal taking.

Friday’s letter, obtained by Noozhawk, was signed by Robert A. Curtis of the firm Foley, Bezek, Behle & Curtis.

“The Takings Clause of the Fifth Amendment provides that private property shall not ‘be taken for public use, without just compensation,'” the letter states. “Be aware that my firm intends to pursue all of these claims should this so-called Rent Moratorium continue beyond May 31, 2020.”

SIMA and the firm are trying to stop the Santa Barbara City Council from continuing the rent deferral policy past May 31.

The City Council has voted to align itself with Gov. Gavin Newsom’s order to allow tenants of residential and commercial properties to defer their rents for the months of April and May because of the COVID-19 pandemic. If the governor were to extend the deferral order, Santa Barbara would follow suit.

Many commercial property owners, however, object to the government getting involved with their ability to collect rents. The council has said that tenants have up to one year to pay back the deferred rents.

Jim Knell in 1984 founded the SIMA Corporation and Management, a real estate holdings firm that manages places such as the Cathedral Oaks Athletic Club, El Paseoand Victoria Court. He said the shutdown is severely damaging the economy and people’s ability to earn money. 

“They are playing politics with our lives,” Knell told Noozhawk. “Thousands of people’s lives have been destroyed. They are trying to take away our rights.”

Knell said the City Council should not extend the order into June. 

“If this isn’t resolved by the end of the month, there’s going to be civil unrest, and litigation,” Knell said. 

Murillo told Noozhawk that “the City has no comment on the letter as it involves possible litigation.”

“I understand it is frustrating for city residents and the business community to live under pandemic restrictions, and I thank people for social distancing, staying home as much as possible, wearing face coverings in grocery stores and other congregate settings, and for finding the patience to keep practicing all these measures that protect the public health,” Murillo said.

Mayor Pro Tempore Kristen Sneddon told Noozhawk that the situation is complicated.

“What we really need right now is for property owners to do all they can to help local businesses hang in there so that we all make it out together,” Sneddon said. “We also need businesses to do all they can to work with property owners for them to hold on to their structures.

“It is going to take everyone working together. The city needs to do what we can to allow these businesses to thrive once we reopen, mainly by easing cumbersome regulations that thwart the creativity needed to match these times.”

SIMA’s letter taps into a mounting wave of frustration with stay-at-home orders and a concern that government has stretched too deep into people’s lives and, in some cases, delivered severe economic hardship.

The letter claims that health conditions have improved, COVID-19 cases have dropped and hospital rates have declined, prompting the need to reopen. 

“Given that the restrictions imposed to combat the spread of COVID-19 issued by the city were both expansive and rapidly rolled out, commercial landowners now find themselves subject to categorical regulatory taking,” the letter states. “A categorical regulatory taking ‘applies to regulations that completely deprive an owner of all economically beneficial use of her property.'”

Citing case law of Goldblatt v. Town of Hempstead, SIMA states that even though the city may argue that its actions should be presumed reasonable as a lawful and valid exercise of police powers to stop the spread of the COVID-19 pandemic, those powers are not without limits.

The letter also states that the number of recovered COVID-19 cases has “far outstripped” the total number of active COVID-19 cases in the county. 

“This demonstrates that even as of two weeks ago, the total number of active cases is in steep decline and that the majority of the crisis in behind us,” the letter states.

In addition, the letter states that when the government issued a stay-at-home order, there was a predicted need of 50,000 hospital beds for COVID-19.

“The current data reflect that the state needed about 6,000 beds at the peak,” the letter states.

In Santa Barbara County, hospitals are treating fewer than 50 COVID-19 patients, Curtis states in the letter. 

“It is clear that the goal and objective of the stay-at-home order have been met by a large margin,” Curtis said. “Our city made significant sacrifices, in many cases irreparable, to comply with the governor’s orders. These sacrifices, many of which are causing great financial hardship and suffering, are nonetheless continuing daily even though the legal and policy bases supporting the stay-at-home order no longer exist.”

Sneddon said the county is working with all cities to be ready to reopen.

“Health-wise, we are making improvements because of social distancing, but we also need to be ready and nimble when the time comes,” she said. 

Knell said the governor is wrong and there’s no time to wait.

“We need more cities to take control of their destiny, rather than shut the town down,” Knell said.

— Noozhawk staff writer Joshua Molina can be reached at jmolina@noozhawk.com.