N. Murrieta Cmty., LLC v. City of Murrieta

50 Cal.App.5th 31

263 Cal.Rptr.3d 589

NORTH MURRIETA COMMUNITY, LLC, Plaintiff and Appellant,

v.CITY OF MURRIETA et al., Defendants and Respondents.

E072663

Court of Appeal, Fourth District, Division 2, California.

Filed June 8, 2020

Cox, Castle & Nicholson and Kenneth B. Bley, Los Angeles, for Plaintiff and Appellant.

Best Best & Krieger, Jeffrey V. Dunn, Irvine, and Daniel L. Richards for Respondent, Western Riverside Council of Governments.

No appearance for Respondent, the City of Murrieta

OPINION

SLOUGH, Acting P. J. Appellant, North Murrieta Community, LLC (North Murrieta), is the master developer of a large development project in the City of Murrieta (the City) called the Golden City Project.

As part of the planning and approval process, North Murrieta sought to take advantage of certain statutory land use planning tools—vesting tentative maps and development agreements—that enable builders to lock in place regulations, conditions, and fees municipalities may enforce against them while a project proceeds. These tools encourage development by, among other things, helping to make costs predictable despite the fact this kind of project can take years or even decades to complete.

In July 1999, North Murrieta obtained approval for a vesting tentative map on part of the Golden City Project property. The map locked in place fees the City could charge the developer until the vesting tentative map expired two years later. In March 2001, four months before the map would expire, North Murrieta and the City entered a development agreement covering the entire Golden City Project property. The agreement extended the term of the vesting tentative map for 15 years and also locked in place regulations and fees the City could enforce against the developer on the entire project for the same period.

Critically, however, the development agreement explicitly allowed the City to impose new fees on North Murrieta to mitigate the effects of development, provided the new fees were generally applicable and designed to address effects not fully mitigated by fees or exactions in place when the parties entered the development agreement. The City subsequently passed the Western Riverside County Transportation Uniform Mitigation Fee Program Ordinance (the TUMF ordinance), which was designed for just that purpose. (Murrieta Ord. No. 277-03.)

In 2017, the City charged the new mitigation fees to a subsequent purchaser and developer of a subset of the affected properties. The builder made $541,497 in TUMF payments from July to October 2017, and the City transferred the bulk of those funds to respondent, Western Riverside Council of Governments (WRCOG). Both the developer and North Murrieta protested the fees. The purchaser assigned their rights to North Murrieta, who brought a petition for writ of mandate.

North Murrieta asked the trial court to order return of the TUMF payments and requested declarations that the City couldn't impose the new mitigation fees under the extended vesting tentative map until it expired in 2019 and can't impose those fees under the development agreement until it expires in 2021. The trial court held the development agreement established the parties' rights and permitted the City to impose the new fees under the TUMF ordinance. North Murrieta appealed.

We agree with the trial court. Though the vesting tentative map limited the fees the City could collect to those in place when the City approved the map, North Murrieta agreed to modify those rights—both extending their duration and allowing the City to impose new generally applicable mitigation fees—by entering the development agreement with the City. The development agreement is a contract, which the trial court correctly enforced. We therefore affirm the judgment.

I

FACTS

A. The Vesting Tentative Map and the Development Agreement

The parties largely agree on the relevant facts. In 1999, North Murrieta applied for approval of vesting tentative map 28532 (the vesting tentative map), which covers part of the Golden City Project area. Approval of a vesting tentative map generally precludes a city from imposing certain conditions not in effect at the time it approves the map. "When a local agency approves or conditionally approves a vesting tentative map, that approval shall confer a vested right to proceed with development in substantial compliance with ... the ordinances, policies, and standards in effect at the time the vesting tentative map is approved or conditionally approved." ( Gov. Code, § 66498.1 ; see also Gov. Code, § 66474.2 ; unlabeled statutory citations refer to this code.) The City approved North Murrieta's application for vesting tentative map 28532 on July 28, 1999.

Developers may also obtain a measure of certainty about the costs associated with multi-year projects by entering development agreements with municipalities. "Unless otherwise provided by the development agreement, rules, regulations, and official policies governing permitted uses of the land, governing density, and governing design, improvement, and construction standards and specifications, applicable to development of the property subject to a development agreement, shall be those rules, regulations, and official policies in force at the time of execution of the agreement." ( § 65866.)

On March 6, 2001, the City and North Murrieta entered a development agreement for the Golden City Project Specific Plan, which set out the terms and conditions for development of the entire Golden City Project, including the property subject to vesting tentative map 28532. The Murrieta City Council (City Council) passed Ordinance No. 230-01 adopting the development agreement on the same day.

In passing the ordinance, the City Council found the development agreement "is in the best interest of the City because it provides for the construction of infrastructure needed to serve development in the area; allows the City to collect fees for operational costs for police and fire services which cannot otherwise be collected under existing City ordinances; allows the City to impose future mitigation fees on the project if said fees are applied throughout the City; provides funds for fire and police services and facilities earlier than required under the previous Public Facilities Financing Plan for the project; and is consistent with the General Plan Land Use Designation of ‘Specific Plan’, the Golden City Specific Plan and Section 16.54 of the Murrieta Municipal Code."

Among many other things, the agreement extended the term of the vesting tentative map at issue in this case. Generally, such maps expire within 24 months of approval. ( § 66452.6, subd. (a).) However, municipalities may extend them by entering development agreements. (Ibid. ) Here, the City and the developer entered a development agreement extending the vesting tentative map—and certain of the developer's rights under the map—for 15 years, until March 5, 2016—the agreement's termination date. The City later (on December 9, 2015) extended the term of the development agreement to March 5, 2021.

The same section of the development agreement makes clear it froze most of the terms, conditions, and fees the City could impose on the developer. "In extending the duration of tentative tract maps, City shall not impose any additional conditions or fees, or changes in design, density or other policies, rules or regulations which differ from the original approval of the Project except as otherwise provided for herein."

However, the agreement does purport to make two changes to the developer's rights. First, under the heading "Permit Conditions and Exactions (Fees and Charges)," the agreement changes the date on which the developer's rights vested. "The development impact fees, user fees, linkage fees, assessments, charges, general or special taxes, municipal financing, land dedication requirements, fees and charges ... which may be imposed by the City ... are limited to those Exactions ... currently adopted by the City as of the Effective Date," which we've noted was March 5, 2001. That's approximately two years later than the freeze date North Murrieta had previously obtained for the portion of the property covered by the vesting tentative map.

Second, the same section also reserved to the City the power to impose additional fees or to increase fees, so long as they are "effective Citywide (not specifically enacted to apply or be discriminately adverse to SPM-5) for project impacts which are not fully mitigated by existing fees or exactions at the time of the City's approval of this Development Agreement." Though the parties haven't submitted a copy of the vesting tentative map, they appear to agree it didn't allow the City discretion to impose new mitigation fees like the development agreement envisions.

B. The Transportation Uniform Mitigation Fee Ordinance

About two years later, on February 4, 2003, the City Council adopted the TUMF ordinance. The ordinance originated as a program designed by WRCOG for adoption by the authorities in its member jurisdictions, which includes the City. WRCOG's purpose was to have all member cities adopt the program ordinance and raise funds to improve the regional transportation system to meet the needs of regional development.

In adopting the TUMF ordinance, the City Council found new fees were needed to avoid traffic congestion and ensure the availability of safety services for the public. The council found "[a]bsent a Transportation Uniform Mitigation Fee (TUMF), existing and known future funding sources will be inadequate to provide the necessary improvements to the Regional System, resulting in an unacceptably high level of traffic congestion within and around Western Riverside County." They also found "the failure to mitigate growing traffic impacts on the Regional System within Western Riverside County will substantially impair the ability of public safety services (police and fire) to respond. The failure to mitigate impacts on...