By Travis Brooks
The Fourth District Court of Appeal has provided some clarity on previously undecided issue regarding the interplay between vesting tentative and development agreements that purport to extend the vested rights established by the vesting tentative map. Ultimately, the Fourth District agreed with the trial court that despite the vested rights established by an applicant with an approved a vesting tentative map, that applicant can contractually agree to alter the scope of his or her vested rights in a subsequently agreed upon development agreement with a local agency. [North Murrieta Community, LLC v. City of Murrieta et. al., 50 Cal.App.5th 31 (4th Dist. 2020).
Factual and Procedural Background
In 1999, petitioner North Murrieta, LLC (Developer), applied for a vesting tentative map in association with the Golden City Project in the City of Murrieta (City) which the city approved. Consistent with the Subdivision Map Act, approval of the vesting tentative map precluded the city from imposing regulations, conditions, and imposing fees not in effect at the time it approved the map for two years, with the possibility of a one-year extension.
On March 6, 2001, the City and the Developer entered into a development agreement which extended the term of the vesting tentative map for a period of 15 years. The development agreement froze many of the terms and conditions that could be placed by the City on development of the Golden City Project. However, the agreement expressly allowed the City to impose new fees, not in effect at the time the vesting tentative map was approved, to mitigate the effects of the development, provided that the new fees were generally applicable throughout the City and were designed to address project impacts that were not fully mitigated by existing fees or exactions at the time of the City’s approval of the development agreement.
On February 4, 2003, the Murrieta city council adopted the Western Riverside County Transportation Uniform Mitigation Fee Program Ordinance (TUMF). The TUMF levied fees on developments throughout the city to mitigate the effects of such development on transportation.
In 2015, a home builder that purchased portions of the project paid nearly $550,000 in TUMF fees. Both the homebuilder and the Developer objected to the fees and the homebuilder assigned its rights to the Developer.
At the Superior Court
In January of 2018, the Developer filed a petition for writ of mandate seeking to recover the TUMF payments from the City. The Developer also sought a declaratory judgment that the City could not require payment of TUMF payments until after, the city’s extension of vested rights for the project expired pursuant to the development agreement in 2019.
The trial court rejected Developer’s petition. Essentially the trial court concluded that, while the city agreed to extend most of the vested rights established by the tentative map in the development agreement, the also Developer agreed, that the city could impose additional generally applicable mitigation fees if mitigation fees in place were inadequate.
The Court of Appeal’s Decision
On appeal, the Developer argued that the City was required to heed the limits on additional fees that were part of approval of the vesting tentative map in 1999 until the map formally expired pursuant to the development agreement in 2019.
The Fourth District rejected the Developer’s claims and agreed with the trial court, holding that while the development agreement froze most of the regulations, conditions, and fees the city could impose on the Developer, the agreement did make two key changes to the initial vested rights. First, the agreement, by its terms changed the date upon which the Developer’s rights vested, moving the vesting date from 1999 to March 5, 2001. Second, the development agreement reserved to the city the “power to impose additional fees or increase fees” so long as those fees were effective citywide for project impacts that were not fully mitigated by existing fees or exactions at the time of the City’s approval of the development agreement. Here, because the TUMF met these criteria, the TUMF duly applied to the Golden City Project.
In discussing the interplay between vesting tentative maps and later development agreements that may extend some of the rights established by such vesting tentative maps, the court noted:
. . .[the Developer] offers no authority—and really no reason for thinking vesting tentative maps impart a species of super rights that cannot be negotiated away. Nor do they offer any reason that development agreements should be treated differently than other contractual agreements. The law says development agreements are contracts, enforceable like normal contracts. . . .
The court referenced the development agreement statutes in the Government Code (Cal. Gov. Code § 65864 et seq.) as allowing:
A city or county to freeze zoning and other land use regulation applicable to a specified property to guarantee that a Developer will not be affected by changes in standards for government approval during the period of development…It also permits municipalities to extract promises from the Developers concerning financing and construction of necessary infrastructure.
Conclusion and Implications
The North Murrieta decision is important because it provides clarity on a novel issue regarding vesting tentative maps and development agreements where a subsequent development agreement purports to alter the scope of vested rights established by an initial vesting tentative map. Based on this decision, the parties to a development agreement may negotiate and contractually alter vested rights obtained under a previously approved vesting tentative map when extending some of the vested rights established by that vesting tentative map. The court’s opinion is available online at:https://www.courts.ca.gov/opinions/documents/E072663.PDF
