Developers for Saggio Hills, the proposed luxury resort and housing project on Healdsburg's northern edge, have been ordered to pay more than $382,000 in attorney fees to the opponents who brought a lawsuit against it.
An state appeals court last week upheld a 2010 decision by Sonoma County Judge Robert S. Boyd, awarding the fees to Healdsburg Citizens for Sustainable Solutions, which challenged the environmental impact report for Saggio Hills.
Developers had contested the fees in part because one of the attorneys, Janis Grattan Watkins, was also a member of the citizens' group.
"There is no cause for concern that Grattan is self-dealing," the three-judge panel from the First Appellate District in San Francisco said. "Rather, she was seeking to vindicate an important public interest in ensuring compliance with CEQA (state environmental law) and at the same time taking the risk that she would not be compensated for her time."
"It's definitely a vindication of our victory with Judge Boyd," said Warren Watkins, a retired math teacher who heads up the citizens group and is Grattan's husband. "It levels the playing field against guys like (developer) Robert Green, who have a battery of attorneys."
Green, whose company is based in Encinitas, said Wednesday he hasn't decided whether to appeal to the state Supreme Court.
"To anybody with a brain it's absolutely preposterous," he said of the court ruling. "You cannot set a precedent where attorneys can start filing lawsuits with the expectation they can collect attorney's fees."
Saggio Hills was approved by the City Council in 2008, and includes a 130-room "world class" resort, 70 custom-built homes, a community park, trail system, fire substation and dedication of land for future affordable housing.
Green contends that opponents, including Watkins, were able to stall the $310 million project by raising numerous issues and objections in marathon public hearings that took place over several years.
Watkins argues that the slowdown in the economy is what put Saggio Hills on hold.
"The project still may go ahead. It hasn't. We didn't slow it up," Watkins said.
Green and his company, Sonoma Luxury Resort LLC, paid $16.8 million in 2005 for the 259 acres to develop Saggio Hills.
As soon as Saggio Hills was approved on a 3-0 City Council vote, Watkins' group filed a lawsuit challenging the environmental study.
Judge Boyd agreed it was flawed in several areas. He ruled that it failed to study the water demand associated with replanting more than 4,000 oak seedlings; failed to consider aesthetic impacts on nearby Fox Pond open space; and did not consider a sufficient range of alternatives, including a smaller project.
Healdsburg was technically a defendant in the lawsuit, although Saggio Hills developers agreed to indemnify the city and be responsible for paying any court fees and judgments.
The city held more public hearings on the environmental impact report and another judge last year found the deficiencies had been addressed, despite the group's arguments that the document was still flawed.
Boyd initially awarded $758,000 in fees to the group's attorneys, primarily to Rachel Mansfield-Howlett, a specialist in environmental law, and Watkins' wife. But after hearing arguments from the developers and the City of Healdsburg that it was excessive, he cut the amount virtually in half - to $382,000.
Although the appellate ourt approved that lesser amount, the developers are also responsible for paying interest on the award, increasing the amount owed the citizens' group approximately $450,000.
Green said Wednesday that there has been no benefit to the public from the lawsuit, and that it has stalled something that most citizens, businesses and the City Council want, including increased bed tax revenue and other public benefits.
Instead he said, "$450,000 is going into the pocket of Warren and his wife and their attorneys."
"This project like any other doesn't have an infinite amount," he said. "It only has so much money it can afford to spend on the development process."
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