Alameda’s refusal to settle lawsuits with a housing developer could cost the city nearly $30 million.
By: Robert Gammon
The decision was a no-brainer. Alameda could settle two legal cases with a housing developer, thereby allowing the developer to build a project that the city effectively approved in 2010 while enabling Alameda to keep nearly $30 million in developer fees over the next few decades. Or the city could press on with its legal fight and risk losing all that money, knowing that a judge had already said he intended to rule against Alameda.
The first option was the obvious choice, but the city council and City Attorney Janet Kern picked option two. And sure enough, on Jan. 31, Alameda County Judge Frank Roesch ruled against the city, invalidating most of the developer impact fee program, a decision that threatens to cost Alameda nearly $30 million.
Alameda’s stubbornness bewildered the attorneys for Boatworks, an Emeryville-based developer that wants to build 182 units of housing along the estuary. Thomas Roth, one of the attorneys for Boatworks, said the city never expressed an interest in settling the cases—not even after Judge Roesch said on Dec. 1 that he was going to rule against Alameda.
Roesch’s ruling centered on Alameda’s decision in 2014 to raise the fees that developers pay the city by 300 percent. City officials said they needed the higher fees to buy 20 acres of parkland at a cost of $28.5 million, plus pay an additional $10.5 million in upgrades on that land. Boatworks then sued to overturn the fees, arguing that the city was engaging in a bait-and-switch, because it never intended to purchase the 20 acres of parkland, since it was receiving the land for free from the Navy at Alameda Point. Roesch agreed with Boatworks and threw out the portion of the developer fee that was to be used to buy parkland—$28.5 million. (The other legal case with Boatworks involves a suit over the housing project itself. Another judge ruled against the city in that case, and the city has appealed.)
In an earlier interview, Kern said the city would either appeal Roesch’s ruling or redo the analysis—known as a Nexus Study—that it used to justify the $28.5 million in developer fees. But Roth said a new Nexus Study won’t be able to re-establish $28.5 million in developer fees, because Alameda still has no plans to buy 20 acres of parkland. “There’s no accounting magic that they can do,” he said.
No, unfortunately, there isn’t.
Our Backyard is an occasional column by senior editor Robert Gammon.
This column appears in the March edition of Alameda Magazine.