Nut Tree Holdings, LLC v. Baker, 031519 CAAPP1, A150087

Docket Nº:A150087
Opinion Judge:SIMONS, J.
Party Name:NUT TREE HOLDINGS, LLC, Plaintiff and Appellant, v. CHRISTINE BAKER, as Director, etc. Defendant and Respondent CITY OF VACAVILLE, et al., Real Parties in Interest and Respondents.
Judge Panel:We concur. JONES, P.J., NEEDHAM, J.
Case Date:March 15, 2019
Court:California Court of Appeals
 
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NUT TREE HOLDINGS, LLC, Plaintiff and Appellant,

v.

CHRISTINE BAKER, as Director, etc. Defendant and Respondent

CITY OF VACAVILLE, et al., Real Parties in Interest and Respondents.

A150087

California Court of Appeals, First District, Fifth Division

March 15, 2019

NOT TO BE PUBLISHED

Solano County Super. Ct. No. FSC045697

SIMONS, J.

Nut Tree Holdings, LLC (the Developer) filed a petition for writ of mandate (Code Civ. Proc., § 1085), challenging a Department of Industrial Relations (DIR) determination that the Developer's project was a “public work” within the meaning of the prevailing wage law (Lab. Code, § 1720 et seq.; the PWL).1 The trial court denied the petition, and we affirm.

BACKGROUND

In November 2010, the Developer entered into an agreement titled “Amended and Restated Disposition and Development Agreement (Nut Tree Property)” (the Agreement) with the City of Vacaville (the City) and the Vacaville Redevelopment Agency (the Redevelopment Agency).2 The Agreement amended, restated, and superseded a previous agreement to construct a mixed-use development project, which we will refer to as the Nut Tree Project.3 The Agreement provided for the Redevelopment Agency and the Developer to “exchange certain real property [in the Nut Tree Project area], and establish the terms and conditions for the development thereof....”

The Agreement's property exchange terms provided for the Redevelopment Agency to convey multiple parcels to the Developer for one dollar, and for the Developer to convey multiple parcels to the Redevelopment Agency for one dollar. Before the Agreement was executed, two documents estimated the fair market value of the various properties to be exchanged.4 The first was a report prepared by the Redevelopment Agency pursuant to Health and Safety Code section 33433 (the 33433 Report), which required a redevelopment agency, prior to selling property, to secure and make publicly available a report containing certain information, including the highest and best use value of the interest to be conveyed. The 33433 Report estimated the total value of the property to be conveyed from the Redevelopment Agency to the Developer was approximately $12 million, and the total value of the property to be conveyed from the Developer to the Redevelopment Agency was approximately $2.5 million. The second document was an appraisal prepared by Webster & Company LLC for Wells Fargo Bank (the Webster Report). The Webster Report estimated the total value of the property to be conveyed from the Redevelopment Agency to the Developer was approximately $8.9 million, and the total value of the property to be conveyed from the Developer to the Redevelopment Agency was approximately $2.5 million. Using the values set forth in the 33433 Report, the property conveyed to the Developer was worth $9.5 million more than the property the Developer conveyed to the Redevelopment Agency; using those in the Webster Report, the property conveyed to the Developer was worth $6.4 million more.

In addition to the property exchange, the Agreement provided for the Redevelopment Agency to pay approximately $2.5 million to the Developer, or on the Developer's behalf, in payments to the City which the Developer “shall have the right to allocate... towards payment of [certain development fees] applicable to some or all of the” property conveyed to the Developer, and in reimbursements to the Developer for actual costs and expenses incurred in the construction of certain required public improvements. The Agreement imposed certain obligations on the Developer, including specific construction obligations. Finally, the Agreement provided that prevailing wages shall be paid for development construction work, except where DIR or a court determines the payment of prevailing wages is not required.

In July 2011, the Developer requested DIR issue a public works coverage determination for the Nut Tree Project. In December 2012, while this coverage determination was pending, the Developer obtained a valuation report from CBRE, Inc. (the CBRE Report). The CBRE Report provided a “retrospective value as of July 1, 2009” for one of the parcels that was conveyed from the Developer to the Redevelopment Agency pursuant to the Agreement, valuing it at $6.1 million.5 The same property was valued at $1.2 million and $1.5 million by the 33433 Report and the Webster Report, respectively.

In August 2014, DIR issued a determination that the Nut Tree Project was a public work subject to prevailing wage requirements. The determination rested on two alternative grounds: First, the Redevelopment Agency's payments to the Developer constitutes “ ‘[t]he payment of money... by the state or political subdivision directly to or on behalf of the... developer' within the meaning of section 1720, subdivision (b)(1)”; and second, the Redevelopment Agency's conveyance of property to the Developer “constitutes a transfer of an asset for less than fair market price under section 1720, subdivision (b)(3).”

In September 2014, the Developer administratively appealed the determination pursuant to DIR regulations. In April 2015, while the administrative appeal was pending, the Developer obtained a “consultation report” from Integra Realty Resources (the Integra Report), providing a retrospective value as of November 2010-the date the Agreement was executed-of the properties exchanged pursuant to the Agreement. The Integra Report used the CBRE Report's valuation, with certain adjustments, and concluded the properties conveyed from the Redevelopment Agency to the Developer were worth approximately $1.9 million more than the properties conveyed from the Developer to the Redevelopment Agency. In June 2015, DIR issued a decision denying the administrative appeal and affirming the initial determination on both grounds. DIR also rejected the Developer's arguments that certain statutory exceptions applied.

The Developer filed a petition for writ of mandate (Code Civ. Proc., § 1085) challenging DIR's decision on appeal, which the trial court denied without analysis. This appeal followed.6

DISCUSSION

I...

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