Pismo Beach overcharged a developer more than $1 million in fees

December 3, 2020

A San Luis Obispo judge ordered the city of Pismo Beach to repay the developer of a storage facility more than $1 million for overcharging development impact fees. [New Times]

Developer William Kendall sued Pismo Beach, claiming the city charged him development impact fees that did not apply to his project, Pismo Beach Self-Storage. In a Sept. 16 ruling, Judge Tana Coates ordered the city to refund Kendall a payment of $889,254 plus at least $160,021 in interest.

Judge Coates’ ruling also invalidated a city ordinance establishing self-storage development impact fees, which she argued violates state law.

In 2004, Pismo Beach adopted a development impact fee schedule based on a study conducted by government consulting firm Maximus Inc. The city set fees for residential dwelling units, mobile homes, hotels and motels, recreational vehicle parking spaces and commercial uses. Pismo Beach’s development impact fee schedule did not specifically include self-storage units.

The same year, Kendall purchased land on Five Cities Drive that was being used for self-storage and RV storage. Kendall planned to expand and update the facility.

In 2008, the Pismo Beach Planning Commission approved Kendall’s project. But shortly afterwards, Kendall put the project on hold for a few years because of the economic downturn.

Upon resumption of the project, in 2016, city staff estimated the fees for the development would total about $539,000, even though there was not a specific development impact fee for self-storage units in Pismo Beach at the time.

The following year, city staff reclassified the project as retail and increased the fee total to about $2.45 million. Later in 2017, staffers reclassified the project again as office space with estimated fee total of $1.87 million.

Finally, in May 2018, the Pismo Beach City Council voted to create a light industrial and self-storage fee schedule. The fee schedule contained an incorrect assumption that any facility allowing RV storage would have wash racks and be equipped for RV washing, which was not the case with Kendall’s project.

Based on the resolution adopted by the council, the city charged Kendall approximately $1.54 million in fees for his project.

Kendall paid the amount, but sued the city for being overcharged. Pismo Beach was basically charging him for water use in a project that does not use water, Kendall argued.

The developer said he repeatedly tried to work out a better option with the city, but staff and Pismo Beach City Council members would not budge.

City officials claim the categorization of self-storage facilities along with light industrial developments in the fee schedule was based on the 2004 Maximus study. However, Judge Coates’ ruling found it unclear why the city would prepare one set of estimated fees in 2016 and then increase the amount in 2018, claiming the new total was based on a 2004 study.

“In short, there appears to be no basis for the arbitrary increase,” Coates stated in the ruling.

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obispan

You gotta love the name of the company the city hired to do the fee study, “Maximus”. Also made me think of the Monty Python roman sketch where everyone giggles at the name of the emperor, “Maximus Dickus” and the emperor played by Eric Idle does not know why and nobody dares tell him. Given what they’re paid to do to the taxpayer maybe they could license the Monty Python name.


obispan

I remember when a re-roof permit was $48 in Arroyo Grande, basically documenting that a licensed contractor or owner/builder was doing the work not 4 dudes with an extension ladder tied to the roof of an old Honda Civic not knowing what they were doing and working for cash, and $800 in Pismo Beach.


Last Individual

I cannot express how refreshing it is to see a subatomic particle of justice submerged in our swamp of an injustice system. I have had indirect contact with a number of lawyers over the last few years due to criminal and civil injustices committed against extended family members. I usually try not to speak in absolutes, but my conclusion is that ALL lawyers are corrupt. As a corollary, ALL judges (being lawyers) are corrupt, and justice is not possible.


This article describes what may be an exception to my absolute conclusion. However, I don’t know for certain. It may be that this judge’s order is just a mitigation of the injustice committed by the city rather than a complete healing of said injustice. The article indicates that even after correction of this injustice, the city still extorted almost a million dollars from this developer. Still sounds excessive to me, and that is an understatement.


This reminds me of the purported quote from LBJ after the civil rights act was passed. “Well, we had to give them something, and this is probably the least we could get away with.” or words to that effect. It may be that this judge just gave the plaintiff something, and thought that was the least they could get away with.


We will probably never know, but I suspect my conclusion of absolute corruption is still safe.


derasmus

Another example of greedy little towns trying to make up for budget woes caused mostly by huge PERS pension obligations. Most if not all local communities, SLO included, need massive pay cuts, especially at the the supervisorial and managerial level. This needs to happen for at least 24 months and there needs to be a reckoning of how much employees are contributing to their pensions.


I believe in defined benefit pensions but salaries and individual employee contributions to those pensions must be reevaluated to reflect reality .


LameCommenter

Judge: ” there appears to be no basis for the arbitrary increase,”.


Yes there is. It’s a California government agency with typical power-drunk planning staff..


JThomas

Are the City employees responsible going to lose their jobs?


info

I love happy endings. Good job Bill.


mullyman

Another example of Democratic rule that charges outragious fees for nothing. No wonder no one can afford to live in CA anymore.


slo-to-load

Sadly it’s not just Democrats. The latest Republican tax bill raised my taxes big time, not to mention the federal deficit. I guess true fiscal conservatives are a dying breed.