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Developer, Amherst in legal fight over building permit fees

The Town of Amherst and Zaepfel Development are in talks to try to settle the developer's lawsuit accusing the town of charging excessive building permit fees for an office complex on Wehrle Drive, according to Town Attorney Stan Sliwa and the town's outside counsel, George W. Collins Jr.

Zaepfel filed a lawsuit two years ago in State Supreme Court arguing the town overvalued the office building at 1760 Wehrle Drive and, therefore, overcharged the developer for the building permits.

The town set a value of close to $18 million for the building, while Zaepfel argues in its lawsuit that the building has a value of $11 million, according to Collins. Because building permit fees are based on the cost of construction and the value of the building, Zaepfel claims the town overcharged it by $63,300, said Collins, an attorney with Bouvier Law LLP.

The town charged $193,800 in building permit fees, Collins said. Zaepfel argues $130,500 is fair.

The town stands by its valuation, which officials said was based on data from an outside agency used by municipalities across the country.

"We believe Zaepfel's being unrealistic, they probably believe we're being unrealistic," said Sliwa, the town attorney.

Ron George, Zaepfel's chief financial officer, referred questions to Jeffery D. Palumbo, the developer's attorney.

"The lawsuit for Zaepfel is simple. We claim the town overvalued the proposed building of Zaepfel's in College Park," Palumbo said in an email, referring to the name of the office park. "We provided proof the building cost ($)11 million to build and the town ignored our proof and valued it at approximately ($)17 million, resulting in building permit fees over $60,000 higher than they should have been."

Zaepfel built the complex at 1760 Wehrle, at Youngs Road, for PHH Mortgage back when the mortgage-servicing company had plans to expand in the region. The company had as many as 400 employees in the area, but by next month its local work force will shrink to just 100.

Zaepfel, in seeking tax breaks for the building in 2012 from the Amherst Industrial Development Agency, described it as a $34 million project, including $17 million for construction and $17 million for furniture and equipment. Tops Markets announced last month that it planned to move into the building, starting later this year, to take PHH Mortgage's place.

In its lawsuit filed in February 2015, Zaepfel said it paid the permit fees "under protest"; that the fees are open ended and in excess of Amherst's actual costs for inspecting and issuing the permits; and that the fees are not based on reliable studies or statistics.

Amherst, in turn, said its fees are based on building valuation data from the International Code Council, a standard followed by most cities, towns and villages. Doing this means the town doesn't have to rely on the developer's own value for its building, Collins said, which protects taxpayers.

Once the value is set, the building owner pays a building permit fee that increases in cost based on the size of the building, said Brian P. Andrzejewski, the town's commissioner of buildings, who spoke generally and not about the lawsuit.

"Fees are based on the cost of construction," he said. They doesn't include the cost of fixtures or furnishings, he said.

In the lawsuit, Zaepfel also is challenging two "open space" fees the developer had to pay, totaling about $20,000, and the company argues a 20-acre parcel it donated to the town should count as an offset for fees it paid to the town. The town argues the fees were appropriately levied and the offset law wasn't in effect at the time the donation was made.

Town Board members discussed the litigation in private during a work session Monday night. Sliwa and Collins said a settlement could come soon, in part because both sides are paying ongoing attorneys' fees.

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