Court Opinion

ID: 8205801
Source: CourtListenerOpinion
Date Created: 2022-09-12 20:02:12.650099+00
Date Added: 2024-06-11T16:41:11.018082
License: Public Domain

Filed 9/12/22 Pismo Beach Self-Storage v. City of Pismo Beach CA2/6
     NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                         SECOND APPELLATE DISTRICT

                                         DIVISION SIX

PISMO BEACH SELF-                                               2d Civ. No. B310289
STORAGE, LP,                                                (Super. Ct. No. 18CV-0535)
                                                             (San Luis Obispo County)
     Plaintiff and Respondent,

v.

CITY OF PISMO BEACH et al.,

     Defendants and Appellants.

       The Mitigation Fee Act (Gov. Code,1 § 66000, et seq.)
requires a reasonable relationship between a development fee
assessed by a public agency and the burden that the type of
development places on the agency’s infrastructure. Here a city’s
resolution adopting a fee schedule for self-storage facilities failed
to establish that reasonable relationship. We affirm the trial

       All further references are to the Government Code unless
         1

otherwise indicated.
court’s grant of the developer’s petition for a writ of mandate
against the city.
                               FACTS
       Pismo Beach Self Storage, LP (PBSS) owns a 6.4 acre
parcel of land within the City of Pismo Beach (City). The parcel
originally had a 15,000-square-foot self-storage building. PBSS
demolished the original building and presented plans to the City
for a mixed use development in three phases. The first phase
includes a 109,509-square-foot self-storage facility. A dispute
arose between PBSS and the City over the amount of
development impact fees the City had estimated for the self-
storage facility.
                   Maximus, Inc. (Maximus) study
       In 2004 the City adopted a fee schedule based on a study by
Maximus. The study estimated impact fees for residential,
mobile homes, hotels, recreational vehicle (RV) parks, retail and
office uses. It did not consider self-storage or light industrial
uses.
           Revenue and Cost Specialists, LLC (RCS) study
       PBSS requested that the City conduct a study specifically
for self-storage uses. PBSS agreed to pay for the study and the
City could choose the contractor. The City agreed. The City
retained RCS for the purpose of conducting an impact fee study
for self-storage and light industrial uses. The study noted that
the City had been applying the office and retail use categories
from the 2004 Maximus study to all business-related
developments. But the demands placed on the City’s
infrastructure from light industrial and self-storage uses are
statistically less. The report stated that it is feasible to create a
reasonable nexus for impact fees for light industrial and self-

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storage uses “by replicating as close as possible, the 2004
[Maximus study] calculations as though light industrial and Self-
Storage Units categories had been included in the 2004 effort.”
        The study states that the light industrial category would
include uses generally found in business parks such as appliance
repair, woodworking, automobile repair, and “light warehousing
(self-storage units).” The study used an average of two
employees/users per thousand square feet of development to
calculate the infrastructure impact of both light industrial and
self-storage uses.
        The study stated in part: “Water demand estimates from
academic sources can be found that with greater and lesser
demands for Light Industrial Uses as is also the case for
Retail/Service and Office Uses. It is difficult to determine what
demand the City’s Water Master Plan consultants would have
assigned to Industrial Uses as such uses were not anticipated by
the City at that time. As a result, RCS recommends the
application of the same 0.196 acre-feet per year as the two other
business land-use development impact fee categories.”
        The study recommended impact fees for both light
industrial and self-storage uses of $1,061 for water system
facilities, $6,572 for state water contract charges, and $3,761 for
recycled water facilities per 1,000 square feet of development.
That totals $11,394 per 1,000 square feet or $1.135 million for
water impact fees for a 100,000-square-foot facility.
        The City’s chief financial administrator, Nadia Feeser,
reacted to the RCS study in an e-mail to the City manager.
Feeser recommended that the City keep the water fees the same
as the current fee for the office category. She said she studied the
historic water use of the former 15,500-square-foot self-storage

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facility that had been on the property. She said the water use for
the former self-storage facility was 25 to 176 percent compared to
other properties in the office classification.
                            PBSS objections
       When PBSS received the RCS study, it retained Cannon
Engineers (Cannon) to review the study. Cannon analyzed the
actual impacts of water use at a self-storage facility and
comparable impact fees imposed in neighboring cities. Cannon
concluded the RCS study overstated the water use and number of
employees for a self-storage facility. Cannon stated that the
expected water use is 0.9 acre feet per year. Cannon
recommended a fee of $8,210 for water system facilities, $17,479
for state water, and $36,800 for recycled water, for a total water
fee of $62,489.
       PBSS also disputed Feeser’s assertion that the prior use of
the property consumed between 25 and 176 percent more water
than other properties. PBSS pointed out that the 15,500-square-
foot self-storage facility occupied only a small part of the 6.4 acre
parcel and no recreational vehicle washing was allowed. Thus
the historic water use came from the operation of the
construction yard where there was a regular practice of washing
equipment on-site. PBSS offered data on water use at its other
self-storage facilities. PBSS asserted that its self-storage facility
will have only two employees, not two per 1,000 square feet as
estimated in the RCS study. PBSS stated that if it would help
move the matter along, it would agree not to allow RV washing
on the premises.
                         Staff recommendation
       The City’s staff recommended two different impact fee
schedules for self-storage facilities depending on whether RV’s

                                  4
were stored and washed on-site. If RV’s were stored and washed
on-site, the fee schedule for water would be as suggested in the
RCS study. If the water is used indoor only, the staff
recommended impact fees of $216 for the water system
improvements, $900 for the state water supply, and $3,761 for
recycled water development per 1,000 square feet. The
alternative indoor use only fees were calculated at 20 percent of
the fees charged in the office use category.
       Comparing other city’s impact fees, the staff report states:
“It is difficult to compare development impact fees across
different cities, as each city prioritizes different facilities and
infrastructure more than others. Furthermore, cities do not all
have the same types of infrastructure. For example, the impact
fee schedule from the City of Atascadero does not include water
wastewater treatment facilities and thus Atascadero does not
include those fees. Other cities may include additional fees
associated with development in particular locations, such as the
City of San Luis Obispo with different fees if the development is
near the airport. The City of Pismo Beach has a strong need to
ensure its water, wastewater, and recycled water systems are
supported, whereas other cities may not have this same focus.”
                            City’s resolution
       Based on the RCS study and the City’s staff report, the City
passed a resolution establishing impact fees for self-storage use
and self-storage only indoor water use. For self-storage the fees
were as recommended by the RCS study, that is, the same as
light industry. For self-storage only indoor water use, the fees
were as recommended by the staff report, that is, 20 percent of
the office use category fees.

                                5
       The resolution stated in part: “The light industrial, self-
storage, and self-storage indoor water use only development
impact fees will be used only to pay for the portion of the various
City infrastructure that supports new development within those
land-uses and infrastructure categories.”
                        PBSS’s appeal to City
       PBSS appealed the resolution to the City. It presented a
second Cannon study which concluded the RCS study was
inadequate. The RCS study improperly assumed the water use
for self-storage would be the same as the light industrial use;
ignored the uniqueness of self-storage use; improperly assumed
there would be two employees for every 1,000 square feet, when
there will be only two employees total; improperly assumed that
self-storage square footage had some relation to water use; and
improperly assumed traffic for self-storage would be the same as
retail and office uses.
       The City denied the appeal. PBSS paid the fees under
protest, electing the indoor water use only schedule. Under that
option, the City does not allow RV storage on the premises.
                     Petition for writ of mandate
       PBSS petitioned the trial court for a writ of mandate
directing the City to vacate its fee resolution and refund the
contested fees. PBSS alleged that there is no reasonable
relationship between the fee imposed and the type of
development on which it is imposed.
       PBSS claimed that the RCS study does not represent a true
effort to establish reasonable fees for a self-storage facility.
Instead, City Administrator Feeser used RCS to “reverse-
engineer” her desired result. The sole basis for the result was her
conclusion that the former self-storage facility on the property

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used 25 to 176 percent more water than other properties
classified as office uses. There is no evidence to support that
conclusion. At a City council meeting Feeser stated that the fees
would be used to reimburse the City for infrastructure already
completed or to support future capital projects. PBSS’s self-
storage facility would have only two employees total, not two per
1,000 square feet as stated in the RCS study.
                                Ruling
       The trial court granted the writ of mandate. The court
found that the RCS study on which the City relied did not
demonstrate a reasonable connection between the amount of the
fee and the burden the project would place on the City’s
infrastructure. The court stated: “Here the inadequate connection
between the Resolution’s new [fees] and the burden created is
best exemplified in the RCS Study, which states that ‘[i]t is
difficult to determine what demand the City’s Water Master Plan
consultants would have assigned to Industrial Uses as such uses
were not anticipated by the City at that time. As a result, RCS
recommends the application of the same 0.196 acre-feet per
year…’ RCS’s uncertainty does not support a connection between
the recommended fees and the burden ultimately created by the
Project.”
       The trial court also stated that the RCS’s reliance on the
Maximus study defies logic. The RCS study was undertaken
because the Maximus study did not include a land use category
that best reflects a self-storage facility’s burden on
infrastructure.
       The trial court found the assumptions in the RCS study
that self-storage falls in the same category as warehousing and
that self-storage will have two employees per 1,000 square feet

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are not supported by the evidence. The court also found Feeser’s
belief that the property used 25 to 176 percent more water than
other properties classified as office use was not supported by the
evidence.
       The trial court also found Feeser’s statement that the fees
would be used to reimburse the City for infrastructure already
completed was not an inadvertent misstatement. The court
concluded that any such use of the fees would violate section
66001, subdivision (g).
                            DISCUSSION
                                   I.
                          Mitigation Fee Act
       The Mitigation Fee Act was enacted by the Legislature in
response to concerns among developers that local agencies were
imposing development fees for purposes unrelated to the
development projects. (Ehrlich v. City of Culver City (1996) 12
Cal.4th 854, 864.)
       Section 66001, subdivision (a) provides in part: “In any
action establishing, increasing, or imposing a fee as a condition of
approval of a development project by a local agency, the local
agency shall do all of the following: [¶] (1) Identify the purpose of
the fee. [¶] (2) Identify the use to which the fee is to be put. . . .
[¶] (3) Determine how there is a reasonable relationship between
the fee’s use and the type of development project on which the fee
is imposed. [¶] (4) Determine how there is a reasonable
relationship between the need for the public facility and the type
of development project on which the fee is imposed.”
       Such fees are justified only to the extent that they are
limited to the cost of increased services made necessary by the
development. (Shapell Industries, Inc. v. Governing Board (1991)

                                  8
1 Cal.App.4th 218, 235.) A local agency must show that a valid
method was used to arrive at the fee, one that establishes a
reasonable relationship between the fee and the burden created
by the development. (Ibid.)
       The agency’s action in establishing the fees is quasi-
legislative. (Tanimura & Antle Fresh Foods, Inc. v. Salinas
Unified School Dist. (2019) 34 Cal.App.5th 775, 792.) The local
agency need only show a reasonable relationship between the
type of development and the fee imposed. (Ibid.) It need not
show a reasonable relationship between the fee imposed and any
particular development project. (Ibid.)
       The local agency has the initial burden of producing
evidence sufficient to demonstrate that it used a valid method to
establish the fee (Tanimura & Antle Fresh Foods, Inc. v. Salinas
Unified School Dist., supra, 34 Cal.App.5th at pp. 786-787.) If
the agency meets its burden, the developer must show that the
record before the agency clearly did not support the
determination of a reasonable relationship between the fee and
the type of development. (Id. at p. 787.)
                                 II.
                         Standard of review
       Because the City’s determination of the appropriate fee is
quasi-legislative, we review the City’s action under the narrow
standards of ordinary mandate. (Tanimura & Antle Fresh Foods,
Inc. v. Salinas Unified School Dist., supra, 34 Cal.App.5th at p.
786.) We determine only whether the City’s action was arbitrary,
capricious or entirely lacking in evidentiary support. (Ibid.) We
make the determination de novo, as a matter of law. (Ibid.)

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                                   III.
             City’s determination is arbitrary, capricious,
                    and without evidentiary support
       The City contends the trial court erred in failing to properly
apply the highly deferential standard of review to the City’s
quasi-legislative action.
       Self-storage is not a new type of business. Such facilities
have been operating in this state for decades. Instead of a study
of self-storage facilities, the City relied on the RCS study. That
study assumes, without evidence or even an explanation, that
self-storage is similar to light industry. The study simply lists
“light warehousing (self-storage units)” as a light industrial use,
as if that were explanation enough. The RCS study is purported
to be based on the Maximus study. But the Maximus study does
not consider light industry or self-storage. The RCS study states
that it can create a reasonable nexus for self-storage impact fees
“by replicating as close as possible the 2004 [Maximus study]
calculations as though . . . Self-storage Units categories had been
included in the 2004 effort.” How one can replicate calculations
that never existed remains a mystery. It also remains a mystery
how the City’s staff concluded that if only indoor water use were
allowed, the fees would be 20 percent of the fee in the office use
category. It seems a number pulled out of nowhere.
       PBSS insisted that self-storage is separate and distinct
from other uses for the purpose of assessing impact fees. The
City conceded the point by creating separate categories for self-
storage. But the RCS study on which the fee is based makes no
attempt to study actual self-storage facilities, nor does the City’s
staff report. There is simply no evidence to support the City’s
conclusion that the fees it established are reasonably related to

                                 10
the burden self-storage facilities place on the City’s
infrastructure. The City’s action in establishing the amount of
the fees was arbitrary and capricious.
       The City argues that there is nothing irrational about
comparing a massive self-storage facility to a light warehouse of
the same size. Whether the comparison is rational would depend
on the evidence. A self-storage facility and a light warehouse are
different types of uses. That is why the City placed self-storage
in a separate category. The RCS study simply gives both light
warehousing and self-storage as examples of what it considers
light industry. Neither RCS nor the City point to any evidence
that light warehousing and self-storage have similar impacts on
the City’s infrastructure. A bare conclusion that they do is not
evidence.
       Moreover the RCS study does not even attempt to analyze
the specific burdens of light warehousing. The study simply gives
light warehousing as one example of what it considers light
industry.
       The City complains the trial court rejected evidence that
the former 15,500-square-foot self-storage unit on the property
used between 25 and 176 percent more water than typical office
use. We review the trial court’s factual findings under the
substantial evidence standard. (Walker v. City of San Clemente
(2015) 239 Cal.App.4th 1350, 1363.) Substantial evidence means
evidence that is credible and of solid value, not just any evidence.
(Estate of Teed (1952) 112 Cal.App.2d. 638, 644.) The City points
to nothing in the record that would compel the trial court to find
the evidence credible.
       Even had the evidence been admitted, it would not have
made a difference. At best the evidence would only show the

                                11
historic use of water at one former self-storage facility. But the
fees are not based on one facility. Instead the fees are based on
the type of use. (Tanimura & Antle Fresh Foods, Inc. v. Salinas
Unified School Dist., supra, 34 Cal.App.5th at p. 792.)
       The City argues the trial court improperly focused on the
character of PBSS’s particular project, instead of the general
class of use. Even assuming that to be true, it is irrelevant. Our
review is de novo. (Tanimura & Antle Fresh Foods, Inc. v.
Salinas Unified School Dist., supra, 34 Cal.App.5th at p. 786.)
We conclude the evidence does not show a reasonable
relationship between the fee imposed and the burden on the
City’s infrastructure arising from a self-storage type of facility.
       Because our review is de novo, it is also irrelevant that the
trial court may have relied on Feeser’s statement that the fee be
used to reimburse the City for the cost of existing facilities. The
use of the fee is governed by section 66001, subdivision (g): “A fee
shall not include the costs attributable to existing deficiencies in
public facilities, but may include the costs attributable to the
increased demand for public facilities reasonably related to the
development project in order to (1) refurbish existing facilities to
maintain the existing level of service or (2) achieve an adopted
level of service that is consistent with the general plan.”

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                         DISPOSITION
      The judgment is affirmed. Costs are awarded to
respondent.
      NOT TO BE PUBLISHED.

                                    GILBERT, P. J.

We concur:

      YEGAN, J.

      PERREN, J.*

*Retired Associate Justice of the Court of Appeal, Second
Appellate District, assigned by the Chief Justice pursuant to
article VI, section 6 of the California Constitution.

                               13
                     Tana L. Coates, Judge

           Superior Court County of San Luis Obispo

                ______________________________

     David Fleishman, City Attorney; Richards, Watson &
Gershon and T. Peter Pierce; Greines, Martin, Stein & Richland
and Timothy T. Coates for Defendants and Appellants.
     Adamski Moroski Madden Cumberland & Green and
Michelle L. Gearhart for Plaintiff and Respondent.

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