Pismo Beach accused of attempting to swindle developer

July 3, 2023

By KAREN VELIE

Pismo Beach officials are accused of attempting to swindle a developer by overcharging for fees on one property, and then running off a buyer of another parcel the city wants to buy from the same developer at a reduced cost.

In this David versus Golaith style battle, the court has repeatedly sided with William Kendall, the proposed developer of a storage facility. After losing a court case and an appeal for charging excessive development impact fees, the city was ordered to reimburse Kendall for the excess fees with interest.

On March 17, the city sent Kendall a reimbursement check for $1,224,304. Less than a week later, the city issued a new demand for impact fees for the same project, this time wanting $1,383,760.

“It is hard to not view this latest fee demand as a form of retaliation for winning our previous lawsuit,” Kendall said. “Our company has built many self-storage facilities throughout California and has never had to pay this much or deal with such a problematic city. Now that we won our lawsuit and received our reimbursement, they seem to have doubled down just to punish us.”

In the city’s defense, interim City Manager Jorge Garcia said Kendall should “bear all the costs to mitigate the community impacts.”

“And he must also pay the costs of building permits, plan check fees and other fees associated with development, which he still has refused to do for the majority of his project,” Garcia said. “The city has an ordinance that prevents consideration of additional development projects when a developer is delinquent in paying required fees, and the city has informed Mr. Kendall of this fact.”

Garcia does not believe the court’s decision to invalidate the prior fee study means that the city’s taxpayers are required to “subsidize” Kendall’s business.

“The city takes very seriously the protection of the taxpayers against the costs and impacts of new development, which should be borne by developers like Mr. Kendall who profit from development. The city only asks that Mr. Kendall pay his fair share.  To date, he has refused to do so.”

Kendall sued Pismo Beach in 2019, claiming the city charged him development impact fees that did not apply to his project, Pismo Beach Self-Storage. State law limits the fees municipalities can charge to the cost of increased services made necessary by the development, which in this case were substantially lower than the city charged.

Judge Tana Coates agreed, and in 2020, she ordered the city to refund Kendall a payment of $889,254 plus at least $160,021 in interest. The city appealed Coates’ ruling, which they lost in Sept. 2022.

Kendall believes the city may also have an ulterior motive beyond retaliation for their actions. Kendall owns the parcel neighboring the self-storage property which he was in the process of permitting for RV storage. The property was in escrow, but the buyer backed out because of concerns with getting entitlements and permits from the city in a timely manner, Kendall said.

“Once the buyer dropped out, the city actually reached out to me and said they wanted to buy it,” Kendall said. “Apparently they want to use it for overflow event parking.”

Kendall said he would consider selling the city the property, if they would meet the price the previous buyer was willing to pay.

Kendall is asking others who have faced similar problems with the city of Pismo Beach to call him at (805) 642-4773.

“It really makes it seem that Pismo Beach has become hostile and vindictive if you dare to take on city hall,”  Kendall said.