Pismo Beach looks to settle years-long developer fees battle 

The Pismo Beach City Council voted to approve a consent agenda item during its Oct. 17 meeting, which would result in the city forming a settlement agreement with Pismo Beach Self Storage LP and bring an end to nearly five years of legal battles.

During a Sept. 5 mediation, the two parties reached a settlement in which the self-storage company agreed to pay the city a total of $400,000 in exchange for the city's agreement to process and adopt a development agreement, according to a staff report.

• File Photo By Kasey Bubnash
• SETTLEMENT AGREEMENT Pismo Beach City Council and Pismo Beach Self Storage came to a settlement agreement on Sept. 5 after two back-to-back lawsuits over development fees.

The Oct. 17 report noted that the settlement agreement says that Pismo Beach Self Storage will pay the city an additional $441,000 in impact fees and other fees for a proposed modification to phase two of the project.

The $400,000 will be added as extra revenue for the 2024 general fund, according to the staff report, while the $441,000 will be distributed into various impact fee accounts for phase two of the project.

Jorge Garica, Pismo Beach city manager, said he was unable to add information on what the $400,000 and $441,000 fees would be used for because the city can't comment on ongoing litigation affairs.

Phase two of the Pismo Beach Self Storage project intends to revert the land purchased back to the historical use of RV storage, according to the staff report.

The conflict between the city and the self-storage company began in 2004 when developer William Kendall bought land on Five Cities Drive that was being used for self-storage and RV storage with hopes of expanding and updating the facility to a multi-use project, which would include an office, manager's residence, and four buildings of self-storage space.

In 2005, Kendall presented his plans to the Pismo Beach Planning Commission, which approved the project in 2008. According to previous New Times reporting, due to economic hardship, Kendall put the project on hold and returned to working on it in 2013, but three years later, in 2016, Pismo Beach city staff estimated that fees for the project would be $539,000, which Kendall said was double what he normally pays for such projects.

In 2017, after discussing where the project should fall on the city's fee schedule, city staff reclassified the project as retail because Kendall planed to make it a multi-use project, which would increase the fees to $2.45 million, according to previous New Times reporting.

In 2019, Kendall brought a successful lawsuit against the city of Pismo Beach to challenge the city's fees, and the city was ordered in 2020 to refund $889,254 to Pismo Beach Self Storage for its development impact fees, plus at least $160,021 in interest, according to the Oct. 17 staff report.

Then, in 2020, a new lawsuit between Pismo Beach Self Storage and the city over additional development impact fees was filed, according to the staff report, which resulted in the recent Sept. 5 mediation.

"The proposed settlement would end several years of litigation over the project," according to the report, while providing certainty about the nature of the remaining development on the property. Δ