News - March 23, 2011

Atherton likely to fight developer lawsuit in court

by Renee Batti

The lawsuit filed by the development firm Pacific Peninsula Group against the town of Atherton is still active, after the City Council declined to finalize a mediated settlement agreement when it met March 16 in closed session.

Terms of the proposed settlement are confidential.

The open-session council agenda that followed the closed session listed approval of a settlement — which would have allowed the council to vote on the proposed agreement in public. But the item was pulled from the agenda at the beginning of the open session, an indication that the council didn't accept the mediated terms when it met behind closed doors.

Pacific Peninsula sued the town last August to recover $298,000 in road-impact fees it claims it was charged illegally. During the discovery phase of the ongoing legal process, that amount was lowered to about $215,000, according to attorney Leah Castella, who is defending the town in the lawsuit.

Ms. Castella said no other mediation is scheduled, and a court date on the lawsuit is set for Aug. 22. The town will file a motion for summary judgment to have the suit dismissed before that time, she said.

The lawsuit followed the council's decision to refund a portion of road-impact fees paid by builders before the town discontinued the fee in late 2009 due to controversy about its legality. The Pacific Peninsula Group (PPG) sued to force the town to refund the fees it paid in their entirety.

At the public comment period preceding the closed session, resident Melinda Tevis urged Councilwoman Elizabeth Lewis to recuse herself from the discussion and vote because PPG was involved in the building of her home, and therefore she had a conflict of interest.

Ms. Lewis angrily rejected the claim that she has a conflict of interest. She said that PPG didn't build her home, although Jude Kirik, the president and a principal of one of the group's companies, Pacific Peninsula Architects, designed it.

Mr. Kirik is also a principal of another PPG group, the Pacific Peninsula Custom Group. PPG has four groups, all sharing a building in Menlo Park, according to its website.

The town attorney announced after the closed session that no reportable action was taken during the session, so it is unknown who participated in the discussion of the proposed settlement.


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