Monday, July 4, 2022

Two builders claim Leland charged illegal impact fees to connect water and sewer service

Two local building companies claim the Town of Leland charged them illegal impact fees for years. Impact fees refer to costs billed to connect new water or wastewater users to a municipal system.

Both Bill Clark Homes and Plantation Building Corp. claim the Town of Leland improperly charged — and therefore collected too much money from — impact fees for years. (Port City Daily/File photo)

LELAND — At least two building companies with projects in Leland claim the rapidly-growing town improperly charged impact fees before connecting water and sewer services.

A legal agreement between the Town of Leland and Bill Clark Homes Wilmington outlines allegations the builder put forth, claiming the company was improperly assessed and overpaid utility impact fees for several years. Such claims are preserved via a tolling agreement, which essentially extends the statute of limitations for filing suit should negotiations break down and Bill Clark Homes decide to seek damages in court.

Related: Leland responds to builder’s Brunswick Forest lawsuit, denies it charged illegal fees

The state’s laws around impact fees changed after a 2016 North Carolina Supreme Court case which ruled in favor of a builder. Towns did not have the authority to impose fees charging for future costs, according to the case, and the court ruled the fees were unlawful.

Since the case, the General Assembly legalized and clarified what towns could charge through impact fees — also referred to as capacity, capital recovery, or system development fees. Now, “system development fees” are legal, so long as the costs are calculated in a professional analysis to recoup capital improvement costs to service new development.

The catch? The law didn’t retroactively authorize municipalities to charge what the court found to be illegal impact fees. This left a liability for municipalities that charged the fees within a three-year window, established in the statute.

A tolling agreement

The tolling agreement, signed in August 2018, waives Leland’s ability to defend itself on the basis of the statute of limitation in response to potential litigation Bill Clark Homes may choose to pursue.

One month after the agreement was signed, another area building company filed a class action lawsuit against the town putting forth similar claims. Plantation Building Corp., a large-scale Wilmington company with construction projects in Brunswick Forest, filed its class action suit in September 2018, arguing Leland’s fees were charged “arbitrarily.” Leland responded to Plantation’s claims in December, denying its fees were charged illegally.

Bill Clark Homes’ tolling agreement with Leland references an ongoing dispute about the charges. Even if the impact fees are found to be legal, the filing states Bill Clark Homes “nevertheless overpaid a portion of such fees on some residences it had constructed where certain ‘bonus rooms’ were counted as bedrooms in calculating fees due to the town.”

An exact amount of damages allegedly owed to either Bill Clark Homes or Plantation has not been disclosed in public court documents.

It’s not clear why Bill Clark Homes chose to pursue a tolling agreement in lieu of joining Plantation’s class action suit. Attorneys representing Plantation were soliciting claims from area builders months before filing, according to Hunter Bryson, the company’s lead attorney in the case. Bryson said Plantation’s suit encompasses all of Bill Clark Homes’ properties as well, as it is a class action that applies to all impact fees paid to the town between September 2015 and June 2018.

Ryal Tayloe, the attorney who worked on the tolling agreement on behalf of Bill Clark Homes, said the company did not wish to comment.

Port City Daily first requested documentation of a pending lawsuit between the town and Bill Clark Homes on Jan. 3. Leland supplied a copy of the agreement nearly three months later, on March 27. The town’s clerk confirmed the town has not made payments to Bill Clark Homes in connection with the tolling agreement.

Brian Edes, Leland’s town attorney, responded Wednesday he intended to respond to a request to comment on the claims. Port City Daily will update this article if Edes provides comment.


Send tips and comments to Johanna Ferebee at johanna@localvoicemedia.com

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