The Fourth District Court of Appeal has upheld an order requiring refund of over $10 million in accumulated development impact fees because the City’s findings “were mere conclusions, not the specific findings required under the [Mitigation Fee] Act.” Walker v. City of San Clemente, No. G050552 (Fourth Dist., Aug. 28, 2015).

Statutory Requirements. Under the Mitigation Fee Act, Gov’t. Code §§ 66000 et seq., each development fee must be deposited in a separate capital facilities account and may be expended only for the purposes for which it was collected. For all unexpended fees, the agency must make findings every five years that (1) demonstrate a reasonable relationship between the unexpended balance and the purpose for which the fee was charged; (2) identify the sources and funding for any as-yet uncompleted public improvements; and (3) designate the approximate date the agency expects the funding for uncompleted improvements to be deposited in the account. § 66001(d)(1) The Act provides that “[i]f the findings are not made as required by [the Act], the local agency shall refund the moneys in the account” to the current owners of the properties for which the fees were paid. § 66001(d)(2).

The Beach Parking Impact Fee. In 1989, the City of San Clemente adopted a “Beach Parking Impact Fee” whose stated purpose was to “mitigate the impact of the increased demand on beach parking caused by new residential development.” For some 20 years, the City collected the fee, but expended very little of it (less than 3%) on beach parking improvements. In 2009, the City Council “receive[d] and file[d]” a “Five-Year Required Report” prepared by staff to justify its continued retention of the fees under the Mitigation Fee Act. Plaintiffs challenged the City’s retention of the fees, contending that the Five-Year Report failed to satisfy the requirements of the Act.
Continue Reading Failure to Make Findings Specified in Mitigation Fee Act Requires Refund of All Unexpended Development Fees

Giving a green light to construction of a new bridge in the historic Balboa Park, a court has reaffirmed a city’s discretion to interpret and apply its own general plan and zoning ordinances notwithstanding conflicts with specific general plan policies protecting historic resources. Save Our Heritage Organization v. City of San Diego et al., No. D063992 (4th Dist., May 28, 2015).

The Balboa Park bridge project includes a new bypass bridge and paid parking garage, allowing the main portion of Balboa Park to return to a vehicle-free zone, but adversely affecting a significant historic resource in the park. Opponents challenged the project, raising several issues regarding consistency with applicable land-use plans.

The San Diego Municipal Code requires that permits for site development “not adversely affect the applicable land use plan.” The opponents argued that because the project conflicted with several policies protecting historic resources in the City’s general plan, the project would necessarily have adverse effects on the plan. Rejecting this interpretation, the Court of Appeal held that projects need not conform to all policies of a land use plan but have to generally be “in agreement or harmony.” The City’s findings acknowledged inconsistencies with several general plan policies, but concluded that the project “would not adversely affect the General Plan and the project as a whole would be consistent with several of the goals and policies of San Diego General Plan.” Noting the great deference accorded a local agency’s determination of consistency with its own general plan, the court concluded that substantial evidence supported the City’s finding that the project would be consistent with a majority of the applicable goals and policies.
Continue Reading Court Defers to San Diego’s Approval of Bridge in Balboa Park

A developer relying on financial hardship to obtain approval of an elder care facility exceeding the square footage permitted in a residential zone must present evidence of such financial hardship to sustain the required finding. Simply averring that a smaller project would not achieve economies of scale needed to provide adequate support services is inadequate. Walnut Acres v. City of Los Angeles, No. B254636 (2nd Dist., April 15, 2015).

In 2006, the City of Los Angeles adopted Municipal Code section 14.3.1 in order to consolidate the land use approvals required for eldercare facilities, including housing for Alzheimer’s/dementia care, assisted living, and skilled nursing. Section 14.3.1 applies as a permitting overlay to a site’s underlying zoning. One required finding is that “strict application of the land use regulations on the subject property would result in practical difficulties or unnecessary hardships…,” the same finding required in many jurisdictions (including Los Angeles) to obtain a zoning variance.

The developer in Walnut Acres sought to construct a 50,289 square-foot, 60-guest room elder care facility in a residential district, with 25 percent of the beds allocated to persons with Alzheimer’s or dementia. Application of the relevant zoning provisions to the site would have limited the facility to 12,600 square feet and 16 guest rooms.

The zoning administrator approved the project over objections from neighbors. To substantiate Section 14.3.1’s “undue hardship” requirement, the zoning administrator found that strict application of the code’s requirements would, among other things “result in significant underutilization of the site and would not permit the operator to achieve the economy of scale required to provide the level of on-site support services and amenities required for the elder care facility’s unique population.” The zoning administrator’s decision was affirmed by the City Council’s Planning and Land Use Management Committee.
Continue Reading Second District Court of Appeal Invalidates Approval of Elder Care Facility, Citing Lack of Evidence to Support Zoning Determination

The California Building Industry Association scored a major victory recently when a San Jose judge threw out the city’s requirement that residential developers sell or rent a specified portion of newly-built homes to lower-income households. The court ruled the city had not shown a reasonable linkage between the impact of new development and the need