LATHROP – There’s hundreds of homes built by Richland Communities west of Interstate 5 before the housing bust that Lathrop never collected $3.2 million in mandated city fees on to cover the cost of providing services to accommodate growth.

Five months ago, a related lawsuit filed by unpaid contractors against Richland Communities for public infrastructure improvements they made was settled.

On Monday night the council met in closed session to discuss the situation further. No reportable action was taken in the meeting which also included three other legal matters.

The settlement that was agreed to by all parties was recorded back in April.

After wading through dozens of court filings that were a byproduct of seven individual lawsuits, the city was found to be on the hook for $500,000 that would be paid into a trust and distributed to three companies – Smith Dennison Construction, Teichert Construction and Auburn Contractors. But rather than having to pull the money from the general fund, the two bond companies that hold the notes on the massive project agreed to cover the full cost.

They also paid Lathrop’s legal fees to bring the matter to a close.

The $3.2 million that Lathrop is due would come when either Richland moves forward with developing the rural property around Lathrop High School or if it is sold to another developer who plans on doing the same. The development agreement for the project is currently in default. That designation would be lifted as soon as the full payment was made to the city.

If Richland were to move forward with the development, the $3.2 million they would have to pay the City of Lathrop would be on top the $3 million that they agreed to pay to the three companies that were listed in the suit according to the settlement agreement.

While some new home construction continues in Lathrop, the larger master-planned projects like River Islands are still making improvements to the area while they wait for the depressed housing market to rebound. Just last week they held a groundbreaking for the twin-deck bridge that will permit travel from one portion of Lathrop to the new development across the San Joaquin River.

Lathrop City Attorney Salvador Navarrete has said in the past that he has discussed the possibility of having Richland turn over their project to other interested parties in order to allow the construction to move forward.

The matter will likely be listed again on the closed session portion of the agenda when the City Council meets on again on Aug. 15. Typically the closed session meetings begin at 5:30 p.m. while the public portion of the meeting – where any reportable action is announced – begins at 7 p.m.