Almanac

News - August 31, 2011

Atherton council agrees to settle suit with developer

by Renee Batti

The Atherton City Council has agreed to settle a lawsuit brought by developer Pacific Peninsula Group, which sued the town to recover some $298,000 in road-impact fees it claimed were charged illegally.

With an Aug. 22 court date looming, the council agreed to a tentative deal in an Aug. 17 closed meeting. The town won't provide details until the deal is signed by the Menlo Park-based Pacific Peninsula Group, Deputy City Clerk Theresa DellaSanta said.

Although the lawsuit sought nearly $300,000 from the town, that figure had been lowered to about $215,000 during the discovery phase of the litigation process, the town's attorney for the case, Leah Castella, told the Almanac in March.

Pacific Peninsula Group, which has built numerous homes in Atherton over the years, sued the town after the council agreed to refund a portion of road-impact fees paid by builders before the town discontinued the fee in late 2009. That decision, which divided the council at the time, was based on controversy over the fee's legality.

The question of whether road-impact fees, which are charged by many California cities, are legal is yet to be resolved, but just weeks after the council's July 2010 decision to partially refund them, Pacific Peninsula Group sued to force the town to refund the fees it paid in their entirety.

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