CITY HALL — City officials do not expect that Santa Monica will be hard hit by a recent U.S. Supreme Court decision that redefined what government entities can ask from developers in the course of approving their projects, the City Attorney’s Office announced Thursday.
The 5-4 decision, split along political lines, means that municipalities will have to provide proof that fees exacted from developers in the course of permit negotiations actually are used to mitigate problems connected to the development.
Previously, that standard had mainly applied to easements and the “taking” of land by a government entity from a private person.
It further held that the denial of a permit because a developer refused to meet the monetary conditions imposed for approval was grounds for the developer to sue.
The decision represents the extension of two previous cases — Nollan v. California Coastal Commission and Dolan v. City of Tigard — that required there be a direct link between a fee and the impact it was meant to solve and that the exaction have a “rough proportionality” to the magnitude of the impact.
Although some municipalities could struggle with the ruling, Santa Monica should be in the clear both because of existing state law and its own past practices, said Deputy City Attorney Alan Seltzer.
Santa Monica officials have required nexus studies for monetary fees based on their understanding of the California Mitigation Fee Act and two California Supreme Court cases, he said.
Development agreements — legislative contracts between City Hall and developers that allow people to build taller, denser buildings than allowed under the zoning code — are negotiated, and don’t fall under the Nollan/Dolan umbrella, he said.
Dale Goldsmith, an attorney who deals with Santa Monica land use issues, was relaxed about the ruling.
“I don’t think the sky is falling,” Goldsmith said.
While that may not be music to the ears of local developers, it certainly was to City Councilmember Ted Winterer who had discovered the issue through an “alarmist” opinion column posted to a social media website.
Under current law, most developments over 7,500 square feet become development agreements, and are excused from the Nollan/Dolan test. That will change next year when the new zoning code is adopted, which will establish a list of exactions to go along with developments of a certain height.
Winterer was concerned that the decision would hurt that effort, but City Attorney Marsha Moutrie assured him otherwise.
With millions of redevelopment funds gone or in dispute with the state Department of Finance and budgets generally tight, it’s important and fair for developers to pay to fix problems that they cause in terms of traffic, Winterer said.
“I’m less concerned than I was,” he said.
The case in question centered on a Florida man named Coy Koontz Sr., a Florida resident who purchased 14.9 acres of undeveloped property in a section of wetlands east of Orlando, Fla.
A 1984 law made it illegal to perform certain development tasks without a Wetlands Resource Management permit, and in 1994 Koontz applied for such a permit so that he could develop a 3.7-acre piece of the land.
The rest he promised to deed to the St. Johns Water Management District.
District officials asked for $150,000 in improvements to a piece of land several miles from the proposed development.
Koontz refused and the district denied his permit, setting up what would become almost two decades of litigation that came to a conclusion on Tuesday.
Molly Stuart, a staff attorney with the American Planning Association, a nonprofit educational organization focused on planning issues, called the decision “frightening,” and predicted that government entities will deny permit applications outright rather than risk developers’ lawsuits.
“They were just throwing around ideas and the developer walked away,” she said, describing the case.
Not so, said Paul Beard, the attorney that represented Coy Koontz Jr., the son of the original plaintiff who took up the cause after his father died in 2000.
“All this case says if you’ve been denied a permit based on an unconstitutional condition, you can challenge that,” Beard said. “You can’t be coerced into giving up your constitutional rights.”
He hopes to use the ruling against nexus studies, which he believes are inappropriate because they’re not tailored to specific projects.
“Properties and projects differ,” he said.