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A Palo Alto developer is suing Menlo Park after the city required a $127,400 in-lieu fee for a single-family home to be subdivided into two parcels. The lawsuit argues that the fee violates state law and the developer’s Constitutional rights.
Developer Mircea Voskerician bought a property at 12 Maywood Lane in Menlo Park in December 2024. Voskerician applied to split the single-family lot into two parcels under Senate Bill 9, a 2022 law intended to boost housing by allowing homeowners to split single-family lots and build up to four units without discretionary review.
According to the lawsuit, filed July 17 in San Mateo County Superior Court, the city imposed a $127,400 “recreation in-lieu” fee. Without it, the parcel map would not be finalized and the project could not move forward.
That fee is based on the Quimby Act, a 1965 California law that empowers cities to require developers to set aside parks or recreational areas, or pay a fee in lieu of providing parkland. The goal of the law is to preserve open space in areas where development is taking place.
In 2024, the California Department of Housing and Community Development (HCD) informed Menlo Park via letter that cities cannot condition approval of an SB 9 lot split on the construction of off-site improvements, such as certain public infrastructure. As a result, the city could not charge recreation fees as part of the approval process.
Menlo Park’s spokesperson Kendra Calvert said the city had not received an official notice of the lawsuit as of July 21. She added that the city cannot comment on an active lawsuit.
The Almanac previously reported that city officials disagree with HCD’s interpretation of SB 9. City Attorney Nira Doherty’s response to the HCD letter stated that SB 9 allows the city to charge fees under any other law and that Quimby Act fees don’t count as off-site improvements.
In January, Voskerician paid the city the entire fee under protest, a process that preserved his ability to legally challenge the fee’s validity.
David Deerson, an attorney representing Voskerician for free from the nonprofit law firm Pacific Legal Foundation, said the context of California’s housing crisis is relevant to the lawsuit.
“California desperately needs more housing,” said Deerson. “These kinds of impact fees just make it harder and more expensive to build new housing.”
Voskerician is no stranger to SB9 lot splits: In 2022, Voskerician was the first developer to use the new law for a lot split in Atherton. Atherton does not charge Quimby Act fees.
Arguments and implications
Voskerician’s lawsuit makes two primary arguments. The first is that the city’s actions violated SB 9 by requiring the payment of the in-lieu fees.
The second is that the city violated his Constitutional rights by requiring the fee as a condition of granting approval for the subdivision. The suit argues that such a practice is akin to extortion.
“When the government wants to charge you money or take other property from you as a condition for granting you a land-use approval, they actually have to demonstrate that what they’re asking for from you is related — both in kind and in magnitude — to some negative public impact that your property is going to have,” Deerson said.
Deerson added that the city must demonstrate that subdividing the land into two parcels would create $127,400 worth of negative public impacts on the city’s parks and recreational facilities.
“They haven’t done nearly enough to demonstrate that,” he said.
The suit states that Voskerician is entitled to a full refund of the $127,400 fee, plus interest of 8 percent annually.
If the plaintiffs win their argument that SB 9 prohibits the fee, Menlo Park — and potentially other California cities — could be barred from charging similar recreation fees on SB 9 lot splits. A ruling under the Constitutional claim could apply more broadly to subdivisions, but could leave cities a path to charging fees they can show are reasonably related to the project’s impact on parks and recreation facilities, Deerson said.
Editor’s note: This article has been updated to add Menlo Park’s response.
