Settlement reached in Star Valley development dispute

Developers will have to pay $1.4 million, plus 3.5 percent annual interest, for a road and other improvements that Pima County built over the last year or so that officials say should have been built by the developers in the first place.

That’s according to a settlement of a 2014 Superior Court lawsuit recently reached between the developers behind Star Valley, a large residential subdivision west of Tucson off Valencia Road, and the county.

The settlement, which will soon be formalized in a development agreement between the parties, puts to rest a dispute that saw the county threaten to rescind the development plan for large swaths of Star Valley and one of the developers file a separate lawsuit in federal court alleging defamation on the part of county officials, among other charges.

Beyond paying back the road construction costs, the developers must:

• Pay back costs for a temporary traffic signal at the new intersection at Camino Verde and Valencia;
• Pay half the costs for a traffic light at the nearby Wade Road-Valencia intersection;
• And agree to extend some roadways and build sidewalks as future development occurs, among other terms laid out in the settlement agreement.

The plaintiffs also agreed to dismiss the defamation suit, which was filed in late 2014.

“He tried to get out of a $1.4 million obligation and was not successful,” County Administrator Chuck Huckelberry said of the settlement and Joseph Cesare, one of the principal developers behind Star Valley.

Huckelberry said the county went ahead on the Camino Verde construction on its own last year because having just one entrance to a large development was a public safety issue.

Excerpts from the 1987 ordinance approved for Star Valley, and included in a 2015 memo written by Huckelberry, seem to require the developers to build “off-site transportation improvements,” like the Camino Verde extension, at their own expense.

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However, Cesare and the other plaintiffs argued that if those improvements were required, they could have been covered by the more than $5 million in impact fees the developers have paid the county since the early 2000s, according to court documents.

“If (the developers) had signed an agreement to pay for construction of additional, off-site infrastructure, this would effectively have obligated (them) to pay twice for the same infrastructure because (they were) already paying for this off-site infrastructure through (their) development impact fees,” reads the complaint of the defamation case filed against the county in federal court by Cesare and his company, S.V.A. Corp.

Huckelberry said state legislation requires that those impact fees be spent exclusively on road improvements, not on new roadways, and that all the fees paid so far by Star Valley had gone to work on Valencia.

When reached for comment, Cesare deferred questions about the settlement to his attorney Evan Thompson, who represented Cesare in the Superior Court suit, but not the defamation case.

“Basically neither side admits liability and neither side is agreeing the other side is right. What both sides decided is it makes sense to resolve this this way,” Thompson said of the settlement.

Disputes over what is required and who should foot the bill are also less likely to recur now that the obligations laid out in the settlement will soon be written down and agreed to by the parties, Thompson said.

“From a business perspective, it’s a win-win for both sides, in that the developer has surety now and they don’t have to keep wondering what’s going to happen next. And the county doesn’t have to fight with the developer, because the county knows what their responsibilities are,” he said, adding that it was his clients’ position that there hadn’t been such a signed development agreement between Star Valley and the county before.

With their new agreement with the county, the developers will also now be able to price property in Star Valley appropriately, according to Thompson.

Developers will pay down the principal and interest in $1,500 payments with each new building permit application they submit, according to the terms of the settlement.