The City Council has voted last week to give a developer extra time to sue Tracy or negotiate for lower development fees.

Mike Souza of Souza Realty and Development and partner with Westgate LLC hopes a lawsuit can be avoided, but he acknowledged that he could take the city to court if the council does not reconsider the increased development fees that passed last November.

The city wants to collect $2.9 million from developers to pay to widen Corral Hollow Road from four lanes to six lanes between 11th Street and Parkside Drive.

Souza said his 80-unit condominium project at Lammers Road and Feteira Way bears a disproportionate share of that cost.

“We opposed that at the time and said we want to work with the city on these fees, and it fell on deaf ears,” Souza said.

He expected to pay about $1.7 million in fees when the Westgate project was approved in 2003. The new fees, which cover the road, plus storm drains, parks and utilities, put that bill at about $2.7 million.

But when the matter appeared on last week’s closed session agenda as a threat of litigation, the council agreed to give the fees a second look.

City Attorney Debra Corbett said the “tolling agreement” passed by the council last week extends the statue of limitations for Westgate LLC to file a lawsuit to protest the new fees. Ordinarily, the developer would have had until May 15 to file suit. The agreement extends that deadline to Aug. 15.

Corbett said it gives the city and developer an extra three months to negotiate new fees. Any revised fees must go back to the council for a vote.

“If we’re convinced by any of their arguments, the fees would have to go back to a public hearing,” Corbett said.

Souza said he hopes to convince city engineers that it will cost less than city estimates to widen Corral Hollow Road.

The fees passed in November represent a big increase in the cost developers pay to get building permits. They apply to “Plan C” projects, which include nearly all Tracy homes built between 1998 and 2005. Westgate is one of the few projects left to be built, so when the city’s engineering staff recalculated the cost of roads, storm drains, utilities and parks, it only had a few developments left to pay the bill.

The average fee for apartments is nearly $30,000 per unit. It’s an increase of about $6,800 per unit, most of it to pay for widening Corral Hollow Road.

City Engineer Kul Sharma said fees differ for areas of town. Westgate pays more for roads and less for storm drains, for example, compared with projects on the south end of town. Overall, the Westgate apartments will require a per-unit fee of about $33,700, Sharma said.

He said the higher cost of the road widening comes from increased costs of construction and materials. He added that he would have to look at the scope of the project and crunch the numbers again to see if Westgate’s fees could be reduced.

“If the market conditions have changed, it could be less,” Sharma said. “We could look at recent projects and see if the cost is less. Other than that, it’s very doubtful.”

To reach reporter Bob Brownne, call 830-4227 or e-mail brownne@tracypress.com.