Friday, May 27, 2022

Company suing Leland over impact fees files separate suits against Southport, Brunswick County

The same company and firm are suing Leland, Brunswick County, and Southport over allegedly illegal impact fees charged to builders as a prerequisite to development. Local governments are denying the claims.

Residential construction in Brunswick Forest and the greater Leland area rapidly continues as a $1 billion bridge is planned in its path. (Port City Daily photo/Johanna Ferebee)
Builders are suing municipalities in the Cape Fear region over charging allegedly illegal impact fees to connect water and wastewater service. (Port City Daily photo/Johanna Ferebee)

BRUNSWICK COUNTY — Plantation Building Corp. has filed at least three pending class action lawsuits against Brunswick County governments essentially alleging the same thing: the company asserts it was illegally charged water and sewer impact fees imposed by local governments overextending their state-granted authority.

The company first filed a class action suit against Leland in September 2018. This year, it filed similar class action suits against the City of Southport and Brunswick County, both on the date in April.

Related: D.R. Horton files federal class action against Brunswick County seeking over $5 million in damages

Whitfield Bryson & Mason LLP is representing Plantation Building Corp. in each suit. The firm is also representing Mecklenburg-based J.A.C.K. Development LLC and Wilmington-based Coastal Cypress Building Company in a similar suit against Cape Fear Public Utility Authority.

Hunter Bryson, Plantation Building Corp.’s lead attorney in the case against Leland, said in October the firm is filing related cases across the state. Leland denies it charged fees illegally, and in its December 2018 response to the suit, asserts it has never used the fees to fund future expansion.

In March, D.R. Horton filed a federal class action suit against Brunswick County on the same topic, asking for over $5 million. The “nation’s largest homebuilder” is represented by the same Concord-based firm, Scarbrough & Scarbrough, that successfully litigated the 2016 Quality Built Homes v. Town of Carthage case before the N.C. Supreme Court.

Bill Clark Homes entered into a tolling agreement with Leland in August 2018 over the same fees. The agreement waives the town’s ability to use the statute of limitations as a defense if the company chooses to further formalize its claims into a lawsuit.

What it’s about

The Quality Built Homes case ruled the Town of Carthage overextended its legal authority by charging utility impact fees used to fund future services.

The case triggered a new state law in 2017, which essentially legalized the imposition “system development fees” to fund future services. These fees can only be charged after a professional analysis is conducted to show exactly where and how they will be spent.

Lawmakers left open a three-year window that did not retroactively authorize the illegal use of the fees.

Boiled down, the suits claims municipalities overextended their authority granted by the General Assembly by charging too much in impact fees (or charging arbitrarily without a professional analysis).

Municipalities are denying they charged fees illegally, and claim they were within their right.

Leland, Southport, Brunswick

Plantation Building Corp. alleges it was charged illegal impact fees connected to at least 19 properties in Brunswick Forest, constructed between 2014 and 2017. The company lists just one property in The Landing in its suit against Southport and two Calabash properties in its suit against Brunswick County.

The suit against Brunswick County alleges the county collected $3.358 million in illegal fees between 2015 and 2018. It claims the fees were imposed as a condition of development approval — a claim the county denies.
The county filed its response to the suit on June 1, denying it charged the fees illegally. Among its defenses, the county asserts Plantation Building Corp. did not suffer injury because the cost incurred was passed on at the point of sale — the same defense entered in its suit against D.R. Horton.

“I believe the county acted in accordance with the law and the county plans to defend the suit,” Ann Hardy, Brunswick County manager said Wednesday. “I do not believe there is any merit to their argument.”

Southport manager Bruce Oakley provided the city’s response to the suit, signed June 27, and said he did not have any further comment. The city denies it charged impact fees illegally or arbitrarily.


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

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