City Studies Suspending Builder Who Will Not Pay

The Glendale City Council will seek legal counsel before voting on a request to suspend the building permit of a developer who has not paid mandated fees for school improvement.

After a two-hour hearing Tuesday, council members postponed a decision and asked Glendale City Atty. Frank R. Manzano about possible lawsuits against the city if they opt to suspend the permit.

“The City Council has never suspended a building permit,” Manzano said in an interview, “especially under these type of circumstances.”

Glendale Unified School District officials went to the city for help after a Beverly Hills construction company refused to pay the district more than $63,000 in developer fees.

Apartments Under Construction

The fees are assessed against a 41-unit apartment building under construction in the 2600 block of Canada Boulevard in Glendale.

California law allows school districts to impose such fees on new homes and commercial developments to pay for construction and renovation of buildings.

Max Halfon, attorney for the company, Ronald Levine Construction & Investment Corp., told council members that the apartment building is exempt from the developer fee law because it did not require a special review of the building plans by the city.

But Richard N. Fisher, attorney for the Glendale Unified School District, disagreed.

“We’re confident this is not the case,” Fisher said. “The developer fee act covers all new construction that requires building permits. If Mr. Levine is correct in his contentions, then most of the development fees across the state are invalid.”

Normally, a builder pays the fee before receiving a certificate of compliance from the school district, Manzano said. Once that document is issued and the project meets all codes, the city is required to issue a building permit, he said.

But in the matter before the City Council, the school district granted the certificate of compliance last June with only a promise of payment in 60 days, Fisher said. The developer, he said, was having financial problems and needed more time to make the payment.

However, when the 60 days passed, a bank holding the fee deposit refused to turn the money over to the district. District officials then realized that the deposit from the developer was written out to the developer instead of to the school district.

Discrepancy Goes Unnoticed

Fisher, who was not involved in the transaction, said the discrepancy went unnoticed when the certificate was granted.

Fisher told council members that, if they agree to suspend the building permit, the school district could immediately recover the developer fee, even if the builder decides to take the issue to court.

“What it really comes down to is the district is seeking to avoid the delay and cost of litigation,” Fisher said during the hearing. “Obviously, we could file a lawsuit (and) maybe in four or five years, after spending a lot of money and a lot of time, we could collect the money.”

Manzano is scheduled to advise the City Council on the matter next week.