North Carolina Supreme Court to Rule on Apex Recreation Fee Class Action

The North Carolina Supreme Court is set to determine whether developers contesting a recreation fee imposed by the town of Apex can proceed with a class-action lawsuit.

This decision follows a trial judge's earlier ruling that permitted the case to include other developers who have paid similar fees.

In March 2023, Empire Contractors initiated legal action against Apex, disputing the town's mandate for a $64,000 payment in lieu of dedicating land for recreation within their 20-lot, 3.5-acre development.

During oral arguments, Empire's attorney, Jim DeMay, emphasized the collective interest of developers, stating, "The town's expenditure of these fees does not benefit our specific development, aligning all developers in this concern."

DeMay highlighted that, according to town officials, there is no clear record of how these fees have been allocated, raising questions about their usage.

Representing Apex, attorney Dan Hartzog countered that state law does not specify a timeframe for spending the collected fees.

He argued that planning and developing parks inherently requires time, suggesting that the funds could still be utilized for projects near the affected subdivisions.

Hartzog also contended that the trial judge made multiple legal errors in granting class-action status, urging the Supreme Court to overturn this decision.

This case is part of a broader trend in North Carolina, where developers are increasingly challenging municipal fees.

Notably, in February 2024, the North Carolina Court of Appeals ruled that fees charged to developers like True Homes LLC and D.R. Horton Inc. were unlawfully collected, resulting in over $5.2 million in refunds.

Similarly, in September 2024, a judgment required the City of Raleigh to refund more than $16 million in water and sewer capacity fees deemed to have been charged without proper authority.

The outcome of the Apex case could have significant implications for municipalities and developers across the state, potentially influencing how recreation and capacity fees are assessed and utilized in the future.

As the Supreme Court deliberates, stakeholders await a decision that could reshape the landscape of development fees in North Carolina.

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