CA Appeals Court Holds City Failed to Show Reasonable Relationship Between Park and Recreation Impact Fee’s Use and the Burden Posed by New Development

This post was authored by Matthew Loeser, Esq.

In 2014, the City sought to update its development fee ordinance, and commissioned from Willdan Financial Service the “Development Impact Fee Update and Nexus Study” to analyze the development impact fees needed to support development in the City through 2040. Following the study, the City adopted Ordinance No. 3098, the Development Impact Fee Ordinance, which set impact fees, of $ 11,528 for single family homes or $ 9,149 for multifamily units was attributable to parks and recreation fees. Boatworks brought a petition for writ of mandate and complaint for declaratory and injunctive relief, alleging the nexus study inflated the amount of parkland fees necessary to maintain the current level of service. The court issued a writ of mandate directing the City to excise and vacate the portions of the ordinance that authorized development impact fees for parks and recreation.

On appeal, the City argued the trial court erred in concluding the park and recreation fee was based on the need to purchase 19.82 acres of new parkland. The City justified its position by citing the statement in the nexus study, which concluded that to accommodate new development at the current standard, “new development must fund the purchase and improvement of 19.82 parkland acres, at a total cost of approximately $ 40 million.” Here, while the City acknowledged that it already owned most of the land it intended to develop into new park and recreation facilities, it claimed that it would use the park facilities fee revenue “to purchase parkland or construct improvements to add to the system of park and recreation facilities that serves new development.” The court rejected this contention, finding a fee based in significant part on costs the City would not incur, because it already acquired ample land at no cost, did not have a “reasonable relationship to the cost of the public facility attributable to the development.” Accordingly, the trial court’s finding regarding this claim was affirmed.

Next, the City contended the trial court erred in finding it improperly included in its inventory of current parks two that were not currently open to the public. Specifically, the nexus report included facilities that were part of the total acreage of parkland and open space that formed the basis for the existing parkland standard, which was used to justify the parkland development impact fees. Without these parks, the court found the City’s calculated investment in park facilities would have been lower, and in turn the impact fees would have been lower as well. As neither of these parks was open to the public when the City adopted the ordinance, the court held it was not reasonable to include them in the City’s inventory of existing parkland.

Lastly, in its inventory of existing parks, the nexus study included Shoreline Park, Bill Osborne Model Airplane Field, and two boat ramps. The record indicated that in the Parks and Recreation element of its General Plan, which had been previously submitted, these areas were included within “Community Open Space,” rather than “Neighborhood Parks” or “Community Parks.” Additionally, the City’s 1999 application to the National Park Service for a public benefit conveyance of surplus federal real property classified these properties as community open space. The trial court ruled that the City violated the Mitigation Fee Act in treating those areas as parks rather than open space, since there was no evidence the City had a factual basis to classify these areas differently than it had when adopting the General Plan. The record further reflected that Shoreline Park had some of improvements, such as benches, picnic areas, rest rooms, play areas, lighting, and an exercise path, and the model airplane field had two dedicated flying circles, picnic areas, work benches, and fencing. As such, the 1999 application for surplus land indicated the model airplane park and Shoreline Park were developed, rather than undeveloped, open space. Accordingly, the court found the value of these facilities exceeded the cost of the land. Accordingly, the City’s decision to include them in its inventory of existing parks was not “arbitrary, capricious or entirely lacking in evidentiary support.

As to the proper remedy, the court held that it would not direct the City to carry out the legislative act of rescinding an ordinance, when the less invasive remedy of invaliding or voiding the ordinance was available. On remand, the trial court was directed to enter a judgment declaring the parks and recreation fee as imposed was invalid and unenforceable.

Boatworks, LLC v. City of Alameda, 247 Cal.Rptr.3d 159 (CA App. 5/15/2019)