Developers sue Island schools over fee hike

District says it needs more money as more houses are being built in Alameda

By Susan McDonough, Alameda Times Star

ALAMEDA -- The school district is standing by the higher fees it charges developers to build here, despite an ongoing legal dispute with its largest contributor, Bayport developer Warmington Homes California, which says the higher-than-usual fees are bogus.

Warmington and Bayport master developer Catellus Residential Group -- the muscle and money behind 485 new homes going up along Atlantic Avenue -- have jointly filed two lawsuits against the local school district, each one challenging its assessments on local construction projects.

The district charges builders more than the statewide standard of about $2.24 per square foot, a tax that state law allows districts to levy against builders to help pay for new school construction and repairs.

A 1998 law allowed districts to increase these fees if they could legally justify the higher charges.

The district charged builders here -- not just major developers, but anyone doing construction -- about $4.86 per square foot in 2002-03 and about $4.19 per square foot in 2003-05, maintaining the higher fees were needed to help fund schools for the numerous students new construction is expected to generate.

An early study estimated the Bayport project alone could introduce as many as 506 new students into the school district within the next few years.

The local school board approved a plan Tuesday to continue charging developers higher fees -- this year about $3.76 per square foot of assembled space, projected to earn local schools a total of about $2.5 million for repairs and new projects.

Developer fees vary annually according to fluctuating enrollment counts and construction costs, among other things.

Warmington has paid the higher fees since 2002 under protest while the lawsuits are pending, school board member Mike McMahon said.

The company has said it doesn't believe the higher fees are warranted because, for one thing, its student generation rates are overstated.

The district must recalculate its developer fees annually and submit the assessment to the state.

Mike McClellan, president of Warmington's Northern California operations, said the company will continue to challenge the district's calculations.

"We still think there are problems with their data," he said, adding that progress has been made on resolving the dispute as tabletop negotiations continue with the district. He wouldn't elaborate on the nature of the progress.

McMahon said he can't understand why the builders would nickel and dime the school district out of close to $2 million when Bayport houses are selling for hundreds of thousands more than originally expected -- in the $800,000 to $900,000 range -- lining their bottom line heftily.

Many Bayport buyers anticipate a new school on the former Navy property where the expensive housing development is being built on 87 acres, he said. A proposed elementary school surrounded by an 11-acre park is mentioned in the company's Bayport marketing materials.

Measure C, which voters here passed in March, will raise about $86 million for Alameda schools, including a possible new school in the Bayport community.

Still, district officials contend, the amount is not enough to get everything done to schools that is needed.

Without the added developer fees -- a major source of funding for schools -- McMahon said something will have to give.

"They want the new school built, but for whatever reason they're not willing to make a contribution to that," he said.

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Last modified: September 24, 2004

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