In a new case published on June 8, 2020, North Murrieta Community, LLC v. City of Murrieta, __ Cal.App.5th __ (2020) (Case No. E072663), the Fourth District Court of Appeal addressed novel vested rights issues arising under both the Subdivision Map Act (Gov. Code § 66410 et seq.) and the density bonus law (Gov. Code § 65864 et seq.). Both statutes essentially establish that when a local agency approves a vesting tentative map or enters a development agreement the developer is entitled to proceed on the project under the local laws in effect the time of the approval.
The Court ultimately rejected the developer’s argument that a vesting tentative map established its rights, despite a subsequently approved development agreement, and held instead that the parties can negotiate over and contractually agree to alter vested rights obtained under a previously approved vesting tentative map.
In 1999, the developer obtained a vesting tentative map on part of the property containing the Golden City Project in Murrieta near Loma Linda University Medical Center. The developer and City entered into a development agreement almost two years later covering the entire Golden City Project property. The agreement extended the term of the vesting tentative map. Importantly, however, the development agreement also explicitly allowed the City to impose new fees to mitigate the effects of development, provided the new fees were generally applicable Citywide and designed to address effects not fully mitigated by fees or exactions in place when the parties entered the development agreement.
The City subsequently passed the Western Riverside County Transportation Uniform Mitigation Fee Program Ordinance, which provides for new fees to mitigate the effects of development projects on transportation and applies generally to all new development projects in the City.
The City thereafter charged the new transportation mitigation fees to a residential homebuilder that purchased part of the project, and the homebuilder paid nearly $550,000 in such fees. The developer and homebuilder protested the fees under the Mitigation Fee Act, and the homebuilder assigned its rights to the developer, which filed a petition for writ of mandate asking the trial court to return the payments and declare that the City could not impose the new mitigation fees under the extended vesting tentative map or development agreement until they each expire. The trial court disagreed and held the development agreement established the parties’ rights and permitted the City to impose the fees under the new ordinance, and the developer appealed.
The Court of Appeal agreed with the trial court, holding that it correctly enforced the development agreement, which contractually set out the terms and conditions for the development of the entire Golden City Project, including the portion of the project site covered by the vesting tentative map. The Court also explained that a vesting tentative map does not freeze regulations and fees indefinitely and noted that each party negotiated for provisions that benefitted that party. The court rejected the notions that “vesting tentative maps impart a species of super rights that cannot be negotiated away” and that development agreements should be treated differently than other types of contracts.
North Murrieta is an important new decision addressing a novel issue dealing with statutory vested rights. But the case is ultimately narrowly decided on its particular facts and is unlikely to be repeated.
