Developer disputes Palo Alto's 'impact fees'


The developer building a hotel and 26 homes at the former Palo Alto Bowl site is demanding a refund from the city, which he claims overcharged him for "impact fees" relating to the project.

Monroe Place LP has filed a claim challenging the city's demand for impact fees that typically fund parks, libraries and other community services that would be impacted by new houses -- and their residents. The new development is being built at 4301 El Camino Real.

In calculating these fees, Monroe claims, the city had erred in considering the townhouses as "single-family structures" rather than multi-family ones. Thus, the city's demands, which had to be met before a building permit was issued, were "unlawful, unjustified, excessive, arbitrary and in error and in excess of the defendant's authority," the claim states.

"There is no factual, legal or evidentiary basis for the City's demand for payment of such disputed 'parkland dedication in-lieu fees,' 'community center fees' or 'library development fees' at the excessive 'single family residential' rates," the developer's attorney David Lanferman wrote in the claim.

For these reasons, the claim argues, the city's "demands and imposition of the disputed fees on the project are unlawful and invalid and should be enjoined and refunded with interest."

The dispute has been dragging on since at least January, when Lanferman submitted to the city a letter protesting the fees. The imposition of fees using "single-family" rates, he wrote, "is not only unjustified and inappropriate and inconsistent with the analysis underlying the calculations of the City's fees for these public facilities and amenities, it is also inconsistent with the City's own Municipal Code – pursuant to which this entire project is clearly a multi-family development."

According to the city, the term "single family" -- as the term relates to impact fees -- refers to a "single dwelling unit that does not share a common wall with another dwelling unit."

The development, which the City Council approved in December 2009, includes the 26 three-story and a 167-room Hilton Homewood Suites hotel. Some of the homes are free-standing and others share one wall (called a duplex), according to the website of the parent company, Classic Communities. Its lawsuit notwithstanding, Classic Communities describes the residential component of the new development as "Single-Family & Duplex Homes."


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Posted by Sylvia
a resident of Midtown
on Sep 4, 2013 at 11:05 am

The hubris of these "developers" is unbelievable. They cause increased traffic, more students in our schools, and generally a large impact on the rest of the community. But they don't think it's fair to offset this impact with some fees. Considering the current "boom" in Palo Alto real estate, they stand to get huge profits from those houses they're building.

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Posted by JerryL
a resident of Adobe-Meadow
on Sep 4, 2013 at 11:35 am

If he proceeds with his claim, put the brakes on his development.
Tell the building inspectors: "All Deliberate Speed."

That should take care of it.

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Posted by Floyd
a resident of Another Palo Alto neighborhood
on Sep 4, 2013 at 11:39 am

This from a another developer that was given permission to build out to the sidewalk. What arrogance.

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Posted by JerryL
a resident of Adobe-Meadow
on Sep 4, 2013 at 11:43 am

On second thought, this claim may point out an underlying problem.
Why should it matter whether two homes share a common wall or are stand alone? In each case the impact on our community would appear to be the same. If, in fact, the ordnance(s) treat a duplex any differently than a stand alone single family home, it seems wrong. Each houses a family, each sends kids to school, each probably has two or more cars to want to park and each probably visits our parks and public areas equally. In fact, I could argue that the duplex dwellers may even visit our parks and recreation areas more because of their smaller yards.
If this developer wins his outrageous claim, we better fix the laws and definitions in the law ASAP!

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Posted by Napolitano
a resident of Charleston Gardens
on Sep 4, 2013 at 12:01 pm

Greed is the name of the game

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Posted by Marc F.
a resident of Midtown
on Sep 4, 2013 at 12:06 pm

I think it is interesting how Palo Alto residents as so quick to claim "hubris", arrogance, etc. when any developer, landlord, or any one other than themselves does something in town. It's always "they are wrong, I am correct".

Get over it. Palo Alto is going to get denser, more people are going to live here and you should just learn to live with it. Stop complaining.

It's not 1950.

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Posted by One more
a resident of Midtown
on Sep 4, 2013 at 12:38 pm

Just another arrogant jerk! With a sense of entitlement to boot!

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Posted by "Hubris" or Rights under the Law?
a resident of Addison School
on Sep 4, 2013 at 2:44 pm

I'm pretty sure the issue here is fairness, not "hubris" or "arrogance." My guess is that if the City were to charge any of the commenters more for a permit than the City is entitled to under the City code, each of them would complain. To me, that's not hubris, it's the law.
Now, granted, if the commenters think that the City should amend its code to increase the fees, then I'm not going argue. The downside of higher fees, however, is that the cost of new housing goes up and most young families are priced out of the market. If you already live in Palo Alot and are willing to slam the proverbial door closed behind you to keep out the have-nots, then the higher fees and housing prices won't bother you, but if not...

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Posted by bick
a resident of University South
on Sep 4, 2013 at 4:48 pm

There's nothing wrong with asking for a refund of excess fees paid.

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Posted by Alan
a resident of Charleston Meadows
on Sep 4, 2013 at 7:27 pm

> There's nothing wrong with asking for a refund of excess fees paid.

But if the developer describes the homes as "single family & duplex homes" in his marketing material, how can he claim they are not "single family" for impact fee purposes. These are rather large units with 4 bedrooms and 3.5 bathrooms, so they will be bring in a lot of families with kids, and thus WILL be impacting "parks, libraries etc ..."

I think the SHOULD be paying the fee. If they don't want to, then perhaps the planning commission should look into "clawing back" some the exceptions this developer was granted (as we know they all are. ...)

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Posted by Alan
a resident of Charleston Meadows
on Sep 4, 2013 at 7:33 pm

Here is the developers marketing material. These are 4 bedroom 3.5 bath units with 2100 sq. feet. About the same size as you would expect in a "single family" home.

Web Link

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Posted by Greed is good
a resident of another community
on Sep 4, 2013 at 9:06 pm

Why not pay the workers more money, I heard that on that job the framers did not get paid on time.It seems that no one is making money, except the developer.Shame on you!

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Posted by where's the $$?
a resident of Another Palo Alto neighborhood
on Sep 4, 2013 at 11:15 pm

Where is this money? My understanding is the pot isn't that big. How much could he be contributing anyway?

Since the traffic on this stretch of El Camino affects Arastradero, why can't some of that money go to buying the Maybell site for parkland/community orchard, and help subsidize the purchase of property for senior affordable housing in a more accessible and appropriate location for seniors? Oh, that's right, because what they pay is miniscule compared to what's necessary to mitigate the impacts.

If the City Council wasn't just wholesale undercutting all of our zoning rules...

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Posted by Adrian
a resident of College Terrace
on Sep 5, 2013 at 6:48 am

What about the positive impacts of development? Short-term and long-term jobs, more housing and retail, payments to the city in the form of property taxes, utility bills, etc.

To developers, impact fees are just another term for "extortion". If the project is being built as-of-right, why should the developer pay to build it? Total nonsense, in my opinion.

Furthermore, state and federal have clearly stated that impact fees have to have a clear nexus between the fees and the impact to the community. So, if the fees are excessive, then by all mean, PA should refund the developer.

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Posted by just wonder
a resident of Midtown
on Sep 5, 2013 at 9:52 am

before criticizing whether the developer is greed, do we know how the city of palo alto wrote up the fee charge? is it really for single family or 'apply' to any housing structure? secondly, although the developer marketing the site as 'single family house', there should be law to define such at the city or county level. bottomline, we should know the facts beforehand. thanks.

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Posted by city of fools
a resident of Midtown
on Sep 5, 2013 at 3:09 pm

Who really cares! Leave it to the lawyers to occupy their time with such nonsense. If any money is gained from the developer, it rightly should be returned to the buyers of these incredibly ugly structures. The fact that the Building Official and Planning Official don't know what the definition of a single family residence is, as defined by their city ordinance, and issued permits to the contrary is the real sign of government incompetence. What a pity!

Sorry, but further commenting on this topic has been closed.

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