The County Fights Back: Workbench and Sweet Developments LLC v. County of Santa Cruz, et al.
An early court ruling favored Workbench in its dispute over a 105-unit development on Paul Sweet Road. Now Santa Cruz County is challenging the developer's legal claims in a battle over the limits of California's housing laws.
SANTA CRUZ, Calif. — On March 23, 2026, Santa Cruz developer Workbench and Sweet Developments LLC filed a verified petition for writ of mandate in Santa Cruz County Superior Court against the County of Santa Cruz and its Planning Commission.
The lawsuit, Case No. 26CV01095, challenges the county’s handling of a proposed 105-unit, six-story residential development at 3500 Paul Sweet Road, near Dominican Hospital.
Represented by San Francisco law firm Patterson & O’Neill, the developers allege that the county violated California’s Housing Accountability Act and Permit Streamlining Act by failing to approve or deny the project within statutory deadlines.
At issue is whether county planning staff’s CEQA exemption determination started the statutory deadline to approve or deny the project, or whether a separate decision by the Planning Commission was required.
Workbench argues that the staff determination started the clock and that the county failed to decide the application before the deadline expired. The developer contends that the project was therefore automatically approved under state law, leaving the commission without authority to reject it.
But Santa Cruz County is fighting back.
The Dispute Escalates
The project originated in the spring of 2024, when Workbench pursued preliminary applications under California's Builder's Remedy provisions. A formal development application followed on October 2, 2024.
The proposal subsequently expanded to 105 residential units, including six units reserved for extremely low-income households.
On December 16, 2025, county planning staff issued a preliminary CEQA determination stating that the project “appears to meet qualifications” for a statutory exemption.
At a January 14, 2026, public hearing, the Planning Commission declined to approve or deny the project, instead continuing consideration to an unspecified date while requesting additional information concerning traffic, public safety, and other neighborhood impacts.
On February 18, attorneys for Workbench notified the county that the project had been approved by operation of law under California’s Permit Streamlining Act.
The county disagreed.
The County Draws a Line
On May 22, Santa Cruz County filed its formal answer, denying the developers’ central allegations.
The county's legal affairs are overseen by County Counsel Jason M. Heath, the county's chief civil attorney. The county is represented in this litigation by Barbara E. Kautz, Dolores Bastian Dalton, and Nazanin Salehi of Oakland-based law firm Goldfarb & Lipman LLP.
Dalton, a partner at the firm and a California State Bar-certified appellate law specialist, has extensive experience in land-use litigation and writ proceedings.
The county argues that the Planning Commission still had to make the final exemption determination before the approval deadlines could run. Workbench contends that staff had already made a legally effective determination and that the county subsequently missed its deadlines to approve or deny the project.
The distinction is critical.
A Tentative Ruling Favors Workbench
In her tentative ruling, Cogliati wrote that “staff makes CEQA exemption determinations, and no state law or local code requires Planning Commission approval.”
Whether the statutory clock began on December 16 or January 14, the deadline to approve or deny the project had expired. “Because all possible deadlines passed, the court has no choice but to find that the project has been approved by operation of law,” Cogliati wrote in her tentative ruling..
She also found that the county’s failure to act violated the Housing Accountability Act.
But the tentative ruling did not accept all of Workbench's allegations.
The ruling also identified an unresolved question: whether Workbench, by agreeing to the January 14 hearing and participating without objection, had waived its right to challenge the Planning Commission's authority.
Cogliati also rejected the developers' contention that county officials had acted in bad faith, finding insufficient evidence to support that accusation.
The court described the commissioners' concerns as "thoughtful, unbiased", and recognized the difficulty county staff faced in applying substantial changes to state housing law while the project was moving through the approval process.
Following the August 31 hearing, the court requested briefing on whether the county’s proposed permit conditions (requirements intended to protect public safety and neighboring properties) could apply even if the project had been approved automatically under state law.
That request gave the county another opportunity to defend its position.
The County Alleges “Gamesmanship”
In its September 14 supplemental brief, the county accused Workbench of waiting until after its claimed approval deadline had passed to raise the objection, depriving officials of a chance to address it.
Workbench disputed that characterization in its own September 14 brief. The developers argued that agreeing to the January hearing did not authorize further delays or surrender their deadline protections. Staff had already made the exemption determination, they maintained, and participation in the hearing did not give the commission authority to restart the clock.
On September 16, Workbench also asked the court to disregard the county’s argument that the developers had failed to exhaust their administrative remedies, saying it exceeded the scope of the authorized supplemental briefing. The county responded the following day that exhaustion, waiver, and forfeiture were closely connected and should all be considered.
The county is asking the court to hold Workbench to the process it accepted. Workbench maintains that the county remained bound by the statutory deadlines.
The dispute has shifted from whether the county missed a deadline to whether Workbench's own conduct prevents it from invoking the consequences of that deadline.
A Political Battle Over the Builder's Remedy
The litigation also follows a separate political effort by the Santa Cruz County Board of Supervisors.
On March 10, 2026, the Board voted to request that the California Department of Housing and Community Development recognize March 15, 2024, as the county's Housing Element compliance date.
The distinction is potentially significant.
The Builder's Remedy can allow qualifying housing developments to proceed despite conflicts with local zoning when a jurisdiction lacks a substantially compliant Housing Element.
Workbench alleged that the county's request was intended to undermine the development's eligibility for the Builder's Remedy. The county denied those allegations.
In the August 31 tentative ruling, however, the court excluded evidence concerning the Board's March 10 actions from its consideration, concluding that those events fell outside the administrative record relevant to the challenged Planning Commission proceedings.
The political dispute therefore remains distinct from the narrower legal questions before the court.
Who Holds the Authority?
The competing positions raise questions about the relationship between state housing mandates, local government authority, procedural safeguards, and the public's opportunity to participate in land-use decisions.
The court's August 31 tentative ruling favored Workbench on the statutory deadline question while expressly declining to find that county officials had acted in bad faith.
Whether the developers waived their objections, and what conditions could attach to any deemed-approved permit, remain central issues in the continuing proceedings.
The next hearing is scheduled for October 15, 2026, at 8:30 a.m., before Judge Syda Kosofsky Cogliati in Department 5 of Santa Cruz County Superior Court.
For now, Santa Cruz County continues to defend its position.
Reporting based on court filings in Workbench and Sweet Developments LLC v. County of Santa Cruz, Case No. 26CV01095, including the March 23 verified petition, the county's May 22 answer, the August 31 tentative ruling, and supplemental briefing filed in September 2026. A tentative ruling does not necessarily reflect the court's final decision.
Updated October 8, 2026.
==============================================================
Please consider contributing to the GoFundMe. Your donation will help support the time and effort required to keep researching, documenting, and bringing these issues into public view. Behind every article are hours of work. Your support will help me continue that work and make it available to the community.
.jpg)
Comments