When Is a Park Fee Unconstitutional?

A California developer is challenging a $127,000 "recreation in-lieu" fee imposed by the city of Menlo Park after he sought to subdivide a lot owned by his company. The case centers on whether such high permit fees violate the U.S. Constitution’s Takings Clause, which prohibits government from taking private property without just compensation. Developer Mircea Voskerician, represented by the Pacific Legal Foundation, argues that the fee is excessive and unjustified given the nature of his request. Voskerician purchased an 18,500-square-foot lot in 2024 and soon submitted an application to divide it into two parcels. Under California’s Senate Bill 9 (S.B. 9) law, cities are required to approve such lot splits “ministerially,” meaning without public hearings or discretionary review. Menlo Park followed this procedure and granted approval. However, the city also assessed a six-figure recreation in-lieu fee, which Voskerician claims is unreasonable. State law allows local governments broad discretion in setting impact fees for new developments. Cities have used this authority to impose burdensome charges on developers, effectively limiting the number of S.B. 9 projects. While Menlo Park’s fee may comply with state statutes, Voskerician’s legal team contends it breaches constitutional protections. The Supreme Court has long held that the Takings Clause restricts local governments from requiring property owners to pay for public impacts their projects do not cause. In Nollan v. Antelope and Dolan v. City of Tigard, the Court established that permits can only require payments proportional to the actual harm caused by a project. A 2024 ruling in Sheetz v. City of Phoenix reinforced these principles, extending them to legislative actions rather than just administrative decisions. In this case, Voskerician asserts that his lot split does not significantly burden Menlo Park’s recreational infrastructure. He argues the city cannot justify a six-figure fee for a routine subdivision. David Deerson, an attorney with the Pacific Legal Foundation, emphasized that the Supreme Court has clearly stated that cities cannot shift the cost of public services onto new development without justification. This lawsuit is part of a broader trend of challenges targeting impact fees and other exactions tied to S.B. 9 projects. The Pacific Legal Foundation has previously litigated three similar cases, with two resulting in settlements and refunds to the developers. One case, involving San Luis Obispo, remains unresolved. Voskerician’s case presents a critical test for local governments attempting to balance development with fiscal responsibility. If successful, it could set a precedent limiting the ability of cities to levy steep fees on developers, potentially reshaping how localities manage growth and public resources. The outcome will likely influence future disputes over permit fees and land-use regulations across California.