Developer Voids School Payments in Santa Clarita

A developer stopped payment on checks totaling nearly a half million dollars--required by state law to help fund school construction--to two Santa Clarita Valley school districts while still trying to obtain building permits, county and school officials said Friday.

The developer, G. H. Palmer & Associates, issued the checks to the Saugus and William S. Hart school districts Jan. 14. However, on Tuesday, Saugus Supt. Charles Helmers said his bank informed him that Palmer had stopped payment on a $199,000 check to his district. Jim Bown, assistant superintendent at Hart, said he found that payment also had been stopped on the developer’s $233,000 check to his district.

That same day, county and school officials said, a representative of the developer presented certificates from the school districts verifying payment of the fees to the Los Angeles County Building Department and requested building permits that would have allowed construction to begin on a 41-building, 320-unit apartment complex in Saugus.

Permits Not Issued

Only moments before the Palmer representative arrived at the county’s Valencia office, the school districts informed county officials of the developer’s action. As a result, the permits were not issued, said Edley Watson, county district engineer.

A meeting between attorneys for the developers and the school districts is scheduled for Tuesday.

Palmer said that the attempt by his representative to collect building permits on Tuesday was “a misunderstanding.”

He blamed the incident on a mistake by the county. Palmer said one county department informed him he could have all 41 building permits. But, after he issued the checks to the school districts, Palmer said, he learned from another county department that he had not met all county requirements and could not receive all the permits. He said he then stopped payment on the checks Tuesday.

He said county officials authorized building permits for five of the 41 buildings in the complex Friday and he delivered certified checks--for $23,000 and $28,000--to the school districts.

Palmer said he paid the fees Friday under protest because the apartment complex is a low-income housing project, which, under state law, is exempt from the school construction fees.

Terry Dixon, an attorney for the school districts, said it is unclear as to whether the Palmer project is exempt. He said he hopes Tuesday’s meeting will clarify the fee exemption matter.

“If someone wants to raise questions about the legality of the fee, he doesn’t stop payment without telling anyone,” said Dixon.

Attorneys Questions Fees

Palmer’s attorneys, former Los Angeles City Councilman Arthur Snyder, and David Cunningham III, son of another former Los Angeles councilman, said it is their opinion that their client is exempt from the fees. They said, however, that they did not advise him to stop payment on the checks.

Cunningham said that, under state law, the school districts are not entitled to collect the fees because state law exempts projects for which tract maps were approved before Sept. 1 of last year.

Richard Wirth of the Southern California Building Industry Assn., which represents developers, said language concerning exemptions in the Assembly bill that authorized school districts to levy the fees is unclear.

He said he is upset with Palmer for stopping payment on the checks without telling school officials.

“It just doesn’t make any sense,” Wirth said.

Meanwhile, Saugus school districts officials said they will accept only certified or cashiers’ checks from developers from now on.