City of San Marcos v. Loma San Marcos CA4/1

Loma San Marcos, LLC, Questhaven Pacific View, LLC, and La Paz Sunset, Inc. (collectively, Loma San Marcos), purchased a 15-acre property subject to a security and lien agreement with the City of San Marcos (City). The agreement was entered into by the property’s former owner to securitize fees due pursuant to a conditional use permit that allowed the owners to convert the property from a recycling facility to a movie studio. Under the agreement the property owner was obligated to pay the City impact mitigation fees by dates certain. After purchasing the property and negotiating an amendment to the agreement extending the payment deadlines, Loma San Marcos failed to pay the fees. As a result and based on other terms of the agreement, the City brought this judicial foreclosure action. After trial, the court entered judgment in favor of the City.

Loma San Marcos appeals, contending the fees are not due because (1) the City has yet to issue permits; (2) the renegotiated agreement is unenforceable because it is not supported by valid consideration; and (3) even if otherwise enforceable, the fees set in the agreement are illegal under the Mitigation Fee Act (Gov. Code, §…