Rio District Defends Settlement With Developer : Construction: School board spent $80,000 pursuing the claim. But fee hikes on other projects will recoup the cost of the lawsuit, officials say.

Rio School District leaders on Thursday defended their decision to settle a lawsuit against Oxnard developer Martin V. (Bud) Smith for $48,300 even though the board spent $80,000 pursuing the claim.

The agreement will actually bring the school district only about $3,300 more than it was guaranteed by state law before the lawsuit was filed.

But the school district will eventually recoup the huge legal costs of the suit by hiking developer fees on other building projects planned for Oxnard’s fast-growing northeast community, said Supt. Peter Rogalsky.

For instance, Rogalsky said, the accord approved unanimously by the Rio school board Wednesday also pertains to Smith’s sprawling Wagon Wheel project.

Smith plans to turn the Wagon Wheel area--centered around a bowling alley and motel near the Ventura Freeway and Pacific Coast Highway interchange--into a massive office, residential and entertainment complex.

Other developers planning to build in the northeast Oxnard areas could also be affected by the pact even though they were not named as defendants by the school district, Rogalsky said.

“When those developers begin their projects, there will be considerable advantage to the Rio School District,” Rogalsky said.

“We feel we have been able to open some doors of communication with developers that weren’t there before we filed a lawsuit.”

Under the settlement agreement, which must still be approved by the city of Oxnard and Smith, Rio will get 16.5 cents for every square foot of commercial development and $1.75 per square foot for any new residential units built by Smith within the school district’s boundaries.

That is a penny increase for commercial building and a 77-cent hike on residential development over previous agreements with the developer, Rogalsky said.

“The fees on residential units are the backbone of this agreement,” the superintendent said. “Residential building is what generates the most students, and we must have enough money to build new classrooms to house them.”

The Rio district sued the real estate developer two years ago, initially seeking $4 million to offset the impact it said a new 15-story office tower would have on local schools. A consultant hired by the district determined that the Tower III project would generate up to 200 additional pupils for the Rio district, Rogalsky said.

District officials also sued the city of Oxnard, which approved the 300,000-square-foot office tower. But a Ventura County Superior Court ruled in favor of Smith last year and the school district appealed.

Although the settlement will provide the district with $48,300, Stanley E. Cohen, Smith’s attorney, said the developer would have been required to pay $45,000 in developer fees even if the lawsuit had never been filed. As a result, the district will only receive $3,300 more than it was entitled to, he said.

The agreement will cancel an April 12 hearing scheduled in the 2nd District Court of Appeal, the parties said.

It is not the first time that the tiny Rio district has turned to hardball negotiating with developers. In 1993, district officials extracted a $100,000 deal with the developer of Wal-Mart and a $25,000 donation with Shopping at the Rose, a retail center that has since opened to strong sales in north Oxnard.

Rio officials said they have been forced to strong-arm extra money out of developers to pay for future schools’ costs because state funding for capital improvement projects has dried up.

“We don’t want to stop development,” said school board Trustee Art Hernandez. “We just want to be covered for the future.”