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Santa Rosa station plan triggers tax suit

Key issue is higher tax rate for residents of new developments

Published: Sunday, November 18, 2012 at 5:32 p.m.
Last Modified: Monday, November 19, 2012 at 8:58 a.m.

Santa Rosa is being sued over the taxing structure underlying plans to intensify development around the future rail station near Coddingtown mall.

Resident James Duncan filed suit against the city last month seeking to block the North Station Area Plan passed by the City Council in September.

Duncan, a 71-year-old retired paralegal, hopes to one day subdivide his northwest Santa Rosa property into four lots.

In his lawsuit, he claims the city continues to pursue a taxing scheme on new development that has been found unconstitutional. He said the city still effectively requires people who want to develop their properties to join a special taxing district to pay for the increased costs of providing police and fire service to the new homes.

He claims the city is doing so despite a 2010 court ruling that found unconstitutional the part of the law that required people to vote in favor of annexation to the special tax district in exchange for development rights.

The law was passed in late 2008 when the city was desperate to raise cash as tax revenues plunged from the accelerating recession. Some developers likened the law to extortion.

The Homebuilders Association of Northern California sued to overturn the special tax, and Sonoma County Superior Court Judge Mark Tansil sided with the group, finding that it "unfairly tampers with the elective process."

In response, instead of requiring annexation to the special citywide tax district, the city now gives property owners several ways they can offset the increased cost of city services to their subdivisions.

They can voluntarily join the district, creating an annual tax on future homebuyers of about $430 for new homes and $310 for units in multi-family buildings.

Other options include paying a lump sum to offset future costs of police and fire service, or paying to provide private police, fire and ambulance service to future subdivisions.

Duncan said however the payments are structured, it's unfair to require new residents to pay higher taxes than existing ones for the same services.

Duncan argues that is illegal for the city to "to create and exploit a disenfranchised class of citizens who pay more for the same citywide services than everyone else receives."

City Attorney Caroline Fowler said the city is reviewing the suit and hasn't had the chance to meet with Duncan.

Fowler notes that the environmental impact report for the project makes it clear that joining the special tax district is not a requirement. It is one of several options available to deal with the impacts of higher density development around the future Sonoma Marin Area Rail Transit Station.

The plan envisions sweeping changes to the 987-acre area that by 2035 would make it almost unrecognizable from its current automobile-centric suburban landscape.

By rezoning more than 1,300 parcels, the city hopes to support train ridership by encouraging higher density housing and spurring office and retail development around the Guerneville Road station.

It estimates 2,458 new housing units and 2,589 jobs could be created in the area around the mall, extending south to West College Avenue and east of Highway 101 to include Santa Rosa Junior College.

"I have faith the courts will rule correctly on the issues, just as Judge Tansil did in the building industry case," Duncan said.

The city chose not to appeal the earlier ruling but is appealing Tansil's award of $244,000 in legal fees to the Pacific Legal Foundation, a public interest law firm that represented the homebuilders.

Duncan is representing himself in the case and is not eligible for attorney's fees, though he noted that attorneys have expressed interest in joining his effort.

You can reach Staff Writer Kevin McCallum at 521-5207 or kevin.mccallum@pressdemocrat.com. OnTwitter @citybeater

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