The year-long dispute over the cost-sharing development pact regarding property located west of Lower Sacramento and south of Kettleman Lane was resolved in a 4 to 1 decision by the Lodi City Council on Wednesday in favor of Browman Development Company (BDC).
Mayor Mark Chandler was the only dissenting vote over the reimbursement agreement between BDC and FCB Homes.
In 2014, the three development firms mutually agreed to pursue a cost-sharing development pact over property located west of Lower Sacramento and south of Kettleman Lane.
The 303-acre property was split into 25 parcels to be used for housing development by FCB, the Sunwest Village shopping Center by BDC and the Villa Fiore subdivision by Elliot Homes.
Through the cost-sharing agreement, FCB obtained 181.78 acres of the property that was split into two developments, BDC acquired 32.36 acres and Elliot 68.73 acres.
With the three parties agreeing to move forward with the cost-sharing agreement for reimbursement fees, the City of Lodi stepped away and allowed the developers to negotiate a contract that would assess the cost of each project.
Browman fronted the money to get the project going with the understanding that Elliot and FCB would pay back their share of the fees.
Browman paid $6,171,648, to move forward with the project. Browman’s financial responsibility for the project was $1,917,150 in fees, Elliot was responsible for $1,060,624 and FCB was responsible for $2,659,908.
Tom Doucette, president of FCB Homes, contested the reimbursement agreement because he believed he was being charged for indirect fees that were not associated with his development project.
Doucette argued that he should only be responsible for the improvements associated with his project, and not the construction costs. He offered to pay $744,834 of the $2,659,908 requested because he believed that was the cost of improvement fees for his housing subdivision.
There were 11 requests sent to the council to set, continue, or cancel a public hearing regarding this matter. The disagreement between all parties had resulted in threats of potential litigation from both FCB Homes and the other applicants against the city requiring the council to make a decision over the payment of the reimbursement fees.
At a public hearing held on Feb. 6, Steven Herum, an attorney representing Tom Doucette and FCB homes, questioned the legal definition of the term ‘improvements’ in Lodi’s Municipal Code.
Herum also wanted to verify that the reimbursement agreement submitted by Browman was done in accordance with the city’s municipal code timeline.
The questions posed at that meeting forced the Council to table the public hearing and allow Lodi City Attorney Janice Magdich to review the claims made by Herum.
“Browman development submitted its application for reimbursement on June 19, 2017, 243 days after the city accepted the improvements on March 19, 2016. Therefore the time limitations according to Lodi municipal code was satisfied,” Magdich said.
Magdich stated the time frame argument made by Herum was not applicable to Lodi Municipal Code, because the time frame is a directory timeline, not a statute of limitations thereby refuting the timeline arguments made on behalf of FCB.
“The code is silent as to any penalties of noncompliance by the stated time periods, the time frame is a directory timeline not mandatory,” Magdich said.
The final subject matter over the definition of improvement became a matter of competing for interpretation between what FCB believed was an improvement and what the city’s code defined as an improvement.
“California courts have used a broad definition of both design and improvements to uphold the validity of conditions through the subdivision process, consequently if Browman improvements were necessary to ensure consistency with the city’s general plan, the cost of improvements should be subject to the reimbursement agreement,” Magdich said.
The matter was resolved with the City Council authorizing City Manager Steve Schwabauer to execute a Reimbursement Agreement for public improvements constructed with Lodi Shopping Center and the developers.