Marin County housing developer seeks California’s ‘builder’s remedy’ for Fairfax project

A local developer is attempting to file a "builder's remedy" application in Fairfax, but the town has yet to process the application over a fee dispute.

Marshal Rothman, a Mill Valley developer, has been trying to get Fairfax to approve a development proposal to build 10 homes on a 100-acre parcel for nearly a decade. His new proposal, which adds a stand-alone 15-unit condominium complex, meets the builder's remedy requirements.

The California Housing Accountability Act, signed into law by Gov. Jerry Brown in 2017, provides that if a California city or county lacks a "substantially compliant" housing element, the jurisdiction is precluded from using its zoning or general plan standards to disapprove any housing project that meets certain affordability requirements.

To be eligible for the builder's remedy, at least 20% of a developer's proposed homes must be affordable for low-income residents or 100% of the homes must be affordable for moderate-income residents.

The property, which is zoned to accommodate a maximum of one house per 10 acres, was owned by heart surgeon Dr. Alan Wall until his death. The property overlooks Fairfax with scenic views of Mount Tamalpais and is a popular hiking destination.

Rothman has recently hired the law firm Hanson Bridgett to represent him in the matter. His attorneys are challenging the legitimacy of the fee.

"The $50,000 fee is not something that passes legal muster," said Ellis Raskin, a Hanson Bridgett attorney.

Raskin, who has worked on builder's remedy cases in Southern California, said other Marin developers are contemplating filing applications.

"I can't speak on the record about specifics," Raskin said, "but there are other projects under consideration."

On May 19, Raskin sent a letter to Fairfax's town attorney, Janet Coleson, warning her that if the town does not proceed to process Rothman's application without further delay, "we intend to file an action in the Superior Court to recover damages."

In his letter, Raskin writes that Rothman's limited liability company, Timberstone, "has no objection to paying reasonable application fees that are proportional to the actual cost of the necessary services." But Raskin asserts that the $50,000 fee is "unlawful and unreasonable."

In the letter, Raskin requests a revised quote for the application processing fees.

Fairfax Town Manager Heather Abrams wrote in an email, "We understand that Marshal Rothman is considering submitting an application under builders' remedy for the property commonly known as Marinda Heights or the Wall property. To date, no application has been submitted."

In a March 13 letter to Rothman, town attorney Coleson wrote, "Since you have not yet paid any fees, the SB 330 preliminary application is not complete. The SB 330 preliminary application will be deemed submitted on the date the town receives the required fees and executed reimbursement and indemnity agreement."

Coleson wrote in the letter that a $50,000 deposit is required to "cover the cost of processing the application and preliminary work needed to prepare for a California Environmental Quality Act (CEQA) analysis."

Builder's remedy projects are still subject to CEQA. It is unclear, however, under the provisions of the Housing Accountability Act to what extent a jurisdiction may deny a builder's remedy project based on the information reported in a CEQA document.

In an April 4 letter responding to Coleson, Rothman noted that he previously gave the town a $100,000 deposit towards the creation of an environmental impact report for his original project. Rothman said the town originally estimated the report would cost $200,000.

Prior to the town putting the project out to bid, Rothman objected to its scope "being inappropriately broad."

Rothman said the bids came in ranging from $380,000 to $580,000, and the town accepted the highest bid. Rothman again protested, asserting that the bid was padded with extra fees and unnecessary costs. Rothman said when he delayed paying his 50% of the cost, the town increased the cost to $650,000.

Rothman said during this stalemate, the COVID-19 pandemic hit, and the town declared his application expired.

"Of the $100,000 I gave them for the EIR they reimbursed me $47,000," Rothman said." I asked for an accounting of the other $53,000, and they said it was used for legal fees. So basically I was paying their attorney to figure out how to stop me."

Timberstone, which Rothman formed to develop the Wall property, has filed for Chapter 11 bankruptcy. Timberstone purchased the property in 2013 and borrowed $1.5 million in 2018 to pay for construction of the project.

According to court documents, Rothman's inability to secure approvals from Fairfax caused Timberstone to default on the loan. The bankruptcy filing was needed to stay a foreclosure sale of the land.

Rothman's proposal previously called for dividing the Fairfax property into 10 lots and building 10 homes ranging in size from 4,243 to 4,958 square feet. He also was proposing to provide an easement to allow for public trails on the private land.

At that time, the town's general plan prevented him from clustering the houses.

"Typically, I like to cluster subdivide," Rothman said, "which means you have separate lots that are smaller, and you have a big open space parcel that is green belted."

"Now that the general plan is being bypassed by the builder's remedy," he said, "I'm going to come in with a clustered subdivision where the condo building and the houses are surrounded by a private 96-acre park."