City May Impose New Impact Fees on Project Despite 2005 ‘No New Fees’ Promise—C.A.
By a MetNews Staff Writer
The concept that “a deal’s a deal” does not apply if one party to an agreement is a local governmental entity and its promise constituted a bar on the future exercise of police powers, Div. Three of the First District Court of Appeal held yesterday.
The opinion reverses a judgment by Alameda Superior Court Judge Frank Roesch granting a writ of mandate directing the City of Oakland to revoke its imposition of impact fees on a development project. As the developer viewed it, the city had agreed with it in 2005 that payment of specified fees would cover all costs of the city’s project oversight, then, reneging, sought to impose new impact fees pursuant to 2016 ordinances.
Roesch found that the agreement under which the developer “would pay certain building permit fees, plus annual increases, but not any new fees, does not impede the City’s ability to impose new exactions on developers more generally” and was not an “illegal contract.’’
Disagreeing, Justice Ioana Petrou said in yesterday’s opinion:
“We conclude that any provision in, or construction of, the parties’ agreement that prevents the City from imposing the impact fees on the instant development project constitutes an impermissible infringement of the City’s police power and is therefore invalid.”
Petrou cited Art. XI, §7 of the California Constitution which, she noted, “provides that a county or city may make and enforce within its limits ‘all local, police, sanitary, and other ordinances and regulations not in conflict with general laws.’ ” She said that “[f]rom this police power, a California city derives its power to control land use and enact comprehensive land use and zoning laws.”
It is well established, she declared, “that any agreement that functions to divest a municipality of its ability to exercise its police power with respect to land use laws is invalid.”
“[A]ny provision in the 2005 Agreement that infringes upon the exercise of the City’s police power to enact or enforce land use ordinances to protect public health and safety within its jurisdiction cannot be enforced. Likewise, any provision in or construction of the Agreement that prevents the City from imposing those impact fees on Respondents’ development infringes on the City’s police power and simply cannot be enforced.”
The case is Discovery Builders, Inc. v. City of Oakland, 2023 S.O.S. 2085.
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