Mitigation Fee As a Condition of Development of a Property
in Ehrlich v. City of Culver City (1996), 12 Cal. 4th at pp. 862, 867-869, our high court held that a "mitigation fee" of $ 280,000 imposed by a local government and paid under protest by the property owner, as a condition of development of a property, and as a "replacement" for the recreational facilities formerly operated on the property, should be subjected to heightened scrutiny as a possible taking, because the government may have used its discretionary power over the granting or denying of permits as a means of "leverage" in order to extract a monetary fee from the property owner.
As Ehrlich reasoned, "such a discretionary context presents an inherent and heightened risk that local government will manipulate the police power to impose conditions unrelated to legitimate land use regulatory ends, thereby avoiding what would otherwise be an obligation to pay just compensation. . . . It is the imposition of land-use conditions in individual cases, authorized by a permit scheme which by its nature allows for both the discretionary deployment of the police power and an enhanced potential for its abuse, that constitutes the sine qua non for application of the intermediate standard of scrutiny formulated by the court in Nollan and Dolan." (Ehrlich, supra, at p. 869, italics in original.)