Toll Road Directors Tired of Settlements

Concerned that its attorney had settled every lawsuit challenging developer fees for storage facilities by returning hundreds of thousands of dollars, the toll road board on Thursday set up a committee to oversee future settlements.

“We’ve had a history of settling these cases,” said Todd Spitzer, a member of the San Joaquin Hills Transportation Corridor Agency board of directors and a county supervisor. “This has sent the wrong message to the community. If we are correct in charging these fees, then we need to litigate it rather than settle.”

The TCA, which operates two toll roads in Orange County, charges developers of commercial property a one-time fee of $2.96 to $5.10 per square foot in exchange for permission to build in the toll road area. The fee, determined by location rather than the type of business, helps defray the costs of constructing the roads.

But the owners of storage facilities have challenged the fee structure as illegal. Because their businesses take up more space yet generate far less traffic than other businesses, they say, the fee structure violates state laws requiring development fees to bear a “reasonable relationship” to the impact of the developments.

Since 1994, the TCA has refunded or waived more than $548,000 to settle with the builders of self-storage facilities in Newport Beach, Orange, Irvine and Mission Viejo. The agency, with little publicity, has settled all four times builders have challenged it in court.

To minimize the possibility of that happening again, the board established the committee and, at the same time, reiterated its support for the existing fee structure. “We are dealing with issues involving sophisticated interpretations of law,” board member Dennis D. O’Neil, a Newport Beach city councilman, said in moving that the fees be retained. “It should be decided by a court of law.”

That’s likely to happen sooner rather than later. Kenneth High, an Oxnard attorney who is building a 9,510-square-foot self-storage facility in Orange, challenged the fees in a lawsuit filed last year. “I think we’ve got a really good case,” he said.

The suit seeks an injunction against collection of development fees as well as punitive damages for what High considers a violation of his civil rights. “They have a lot more to lose than we do,” he said following Thursday’s action.

The only board member opposing that action was Christina L. Shea, the mayor of Irvine, who said after the meeting that she considers the fees unfair. “They are a deterrent to development,” she said. “If only lawyers can figure this out, then what am I doing sitting up there?”