Napa school district to drop suit against American Canyon over new development fees

The district filed the suit against the developer of a 1,200-home American Canyon project.|

The Napa Unified School District will withdraw a lawsuit it had filed against the city of American Canyon and a housing developer regarding school impact fees.

The district filed the suit in April against the developer of Watson Ranch — a development of over 1,200 homes being constructed in northeast American Canyon — and named American Canyon as a respondent.

It was in response to Watson Ranch’s suit filed against the district in 2022, which was partially settled in June.

The initial dispute stems from a 2016 agreement between the school district and the Watson Ranch developer, American Canyon 1 LLC. The district was to build an elementary and middle school in American Canyon and would receive funds — called school impact fees — from the developer.

But, owing to declining enrollment and subsequent loss of funding, the district’s board voted to cancel the construction of the middle school in 2019. And, in 2021, decided it would no longer build the elementary school.

The developer then filed suit over the district not fulfilling its part of the agreement.

But the district countersued the developer, American Canyon 1 LLC, and its successor, Pacific West Communities, Inc., stating the developer was still legally required to pay statutory development fees to the district, even without the funding agreement.

The city of American Canyon was pulled into the countersuit because it had issued building permits within Watson Ranch without “requiring certification that school impact or ‘developer’ fees had been first paid to the district,” according to the district.

The initial suit and the developer’s portion of the countersuit was settled after the developer paid the district $736,000.

A statement from the district said the remaining concerns about payment of developer fees were then alleviated when the American Canyon City Council approved the 216-unit Promontory subdivision Aug. 15.

“The City has also made specific representations, through its City Manager, that it will require proof of payment of developer fees in advance of issuing building permits for developments outside of Watson Ranch,” the statement said. “Based on these events and representations, the District is pleased to be able to conclude the litigation.”

You can reach Staff Writer Edward Booth at 707-521-5281 or

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