Home Builders Association of Central Arizona v. City of Maricopa – 5/18/2007

June 1, 2007

Arizona Court of Appeals Division Two Holds That The City of Maricopa Is Bound By Development Agreements Which Preclude It from Imposing Development Fees on Builders.

Pinal County entered into development agreements with homebuilders that required improvement of particular public infrastructure but did not impose any development fees. The agreements provided that the rights it established would run with the property and the agreement itself would bind the County, the developers, and their respective successors and assigns. When the city of Maricopa was incorporated, its boundary included property subject to these pre-existing development agreements. Pursuant to an ordinance, Maricopa adopted roughly two years after incorporation, the city attempted to assess development fees on the lots subject to the Pinal County development agreements. The developers brought a declaratory judgment action against the city, and, after a bench trial, the superior court ruled that the agreements were binding on Maricopa. This appeal followed.

Judge Howard, writing for a unanimous panel, held that Pinal County had the statutory authority to enter the development agreements under A.R.S. § 11-1101(B), that the agreements were binding on Maricopa because Maricopa was Pinal County’s successor in interest under A.R.S. § 11-1101(E), and therefore Maricopa could not assess development fees on the property subject to the agreements.

Judge Howard authored the opinion; Judges Pelander and Vasquez concurred.