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San Clemente Mitigation

In 1989, the City established the “Beach Parking Impact Fee” to mitigate

the anticipated increase in beach parking that would result from large scale residential developments proposed for its inland areas. The City declared it would use the fee to finance the acquisition and construction of parking facilities at or near the City’s beaches. The City thereafter imposed the Beach Parking Impact Fee as a condition of approval for new residential developments outside the City’s coastal zone.

Originally, the City set the Beach Parking Impact Fee at $1,500 per dwelling unit, but it later reduced the fee to $750 per dwelling unit, subject to annual adjustments based on the Consumer Price Index. Between 1989 and 2009, the City collected nearly $6 million in impact fees and more than $3 million in interest. In 1994, the City used approximately $337,000 of the fees to purchase a vacant lot next to a parking lot the City already owned and operated in its North Beach area, but that lot remains vacant. It has been 25 years since the City established and began collecting the Beach Parking Impact Fee, but the City has not used the fee to construct any new parking facilities or make any significant beach parking improvements.

In 2012, Plaintiffs filed this mandamus and declaratory relief action to compel the City to refund all Beach Parking Impact Fees to the current owners of the affected properties. Plaintiffs alleged the Mitigation Fee Act (Gov. Code, § 66000
et seq.; Act) required the City to refund the impact fees because the City had not used the Beach Parking Impact Fee for the designated purpose of constructing new beach parking facilities, and the City failed to make the findings the Act required for the City to retain the funds for 20 years. The trial court agreed and ordered the City to refund approximately $10.5 million in unexpended Beach Parking Impact Fees the City still held. In Walker v. City of San Clemente (Aug. 28, 2015, G050552) ___ Cal.App.4th ___,

we affirmed the trial court’s judgment because the City failed to make the findings the Act required for the City to retain the Beach Parking Impact Fees for more than five years and the statutorily-mandated remedy for that failure is a refund to the current property owners.

Plaintiffs brought a motion seeking approximately $600,000 in attorney fees from the City under the private attorney general doctrine codified in section 1021.5. The fees included a lodestar amount of approximately $371,000 and a 1.6 multiplier. The City opposed the motion on a variety of grounds. Alternatively, the City argued the common fund doctrine would apply to any potential award and therefore the court should use the unexpended parking fees to pay the award, not the City’s general fund. The trial court denied the motion without prejudice because Plaintiffs prematurely filed the motion before the court entered judgment, but the court asked Plaintiffs in any future motion to address whether the common fund doctrine applied.3

After the court entered judgment, Plaintiffs filed a new motion seeking attorney fees and costs under both the common fund doctrine and the private attorney general doctrine. Under the common fund doctrine, Plaintiffs sought an award equal to 33 percent of the fund this litigation created, or roughly $3.5 million. Alternatively, Plaintiffs sought approximately $2.5 million under the private attorney general doctrine, based upon a lodestar of approximately $625,000 and a 4.0 multiplier. The City again opposed the motion on a variety of grounds, and also argued that any potential award

should be drawn from the unexpended Beach Parking Impact Fees under the common fund doctrine.

The trial court granted the motion and awarded Plaintiffs $1.5 million in attorney fees and costs under the common fund doctrine. The City timely appealed…

Steve Ferry

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