PAYBACK: Florsheim Homes, one of the builders behind the Dutra Estates subdivision, above, claimed the city has retaliated because of its successful lawsuit.

MANTECA — The City of Manteca will head to court on June 5 for yet another lawsuit over development fees.
Florsheim Homes, a Stockton-based developer that successfully challenged Manteca’s 11-fold increase of a fee levied on each new home, has accused the city of illegally pressuring it to give up its attempt to overturn the fee hike.

That pressure, Florsheim claims, stemmed from the city’s offer to postpone the deadline for other fee payments for an extra two years for any developer that agrees to pay the disputed “government building facilities fee,” which the City Council voted to increase from $350 to $4,700 two years ago.

Florsheim and several other developers won a lawsuit in San Joaquin County Court last month that prevented the city from assessing the new fee on homes in their subdivisions, which had been approved prior to the vote on the fee increase.

Already several developers not involved in the lawsuit have taken up the offer to put off fee payments, and more recently, two other developers dropped their claims against the city in exchange for the extension.

But Florsheim, which has not taken up the offer, now argues that it should be given the same extension as other developers, even after continuing with the lawsuit.

San Joaquin County Superior Court Judge Carter Holly issued a temporary restraining order against Manteca on April 22 to prevent it from forcing Florsheim to pay $778,000 in “development agreement fees” that would become due that day without the extension.

The developer and the city will meet in court on June 5, when Holly will likely decide whether to continue the restraining order or allow the city to collect its fees after hearing both arguments.

Florshiem’s attorney, Dave Lanferman — who also fought the original lawsuit against the fee increase — argued that the city was punishing Florsheim for exercising its legal rights by refusing to give it the extension that other developers received.

Lanferman quoted a state law that says local agencies cannot “withhold approval” on requests related to a development just because the builder has filed a lawsuit protesting a fee.

Peter Pierce, a Los Angeles-based attorney who has represented the city on development issues, said Manteca’s offer to the developers, including Florsheim, was completely legal.

“The city is not retaliating against Florsheim Homes,” Pierce said. He explained that Florsheim and the city had been “bargaining” over an agreement to end the lawsuit; some developers decided to take the deal, he said, but Florsheim didn’t.

Shortly before Florsheim filed the second lawsuit, it offered to pay double what the court ordered for the “government building facilities fees” if the city gave them the extension on other fees.

The day after the City Council voted to reject that offer, Florsheim took the matter to court.

In his April 22 preliminary ruling, Judge Holly agreed to issue the temporary restraining order against Manteca to prevent “irreparable harm” to the developer, and because the lawsuit “has probability of prevailing at trial,” according to his judgment notes.

But Lanferman said the judge’s early decision does not necessarily foreshadow how the case will turn out.
“I’m encouraged by it, but its just a temporary judgement,” he said.

If the restraining order is continued after June 5, it may be followed by a more lengthy trial, Lanferman said, but if Holly allows Manteca to collect the fees, that will be the end of the lawsuit.