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D.A. will not investigate Kelly Gearhart for criminal wrongdoing for not paying fees

The District Attorney’s office has decided it will not investigate whether developer Kelly Gearhart broke the law when he failed to pay development impact fees on 30 Atascadero homes.

The finding affirms Police Chief John Couch’s opinion that the actions did not appear criminal in nature. In a memo sent Tuesday to City Manager Wade McKinney, Couch said the decision by Chief Investigator Bill Hanley closed the review into Gearhart.

Couch said he received Hanley’s determination by mail Tuesday afternoon. In the letter to Couch, Hanley stated that Gearhart’s failure to pay the fees “does not rise to the level of criminal wrongdoing and whatever errors were made, if any, can be cured administratively within the City of Atascadero.”

Building officials determined that Gearhart violated city planning codes when he allowed residents to move into 30 homes in the DeAnza Senior Cottages before inspectors had visited the homes and the fees had been paid. Gearhart has repeatedly blamed the violation on an oversight by a property manager hired to oversee leases of the cottages.

Disagreement over the fees prompted confusion in Atascadero following a May 25 letter from City Attorney Patrick Enright stating that Gearhart owed a total $409,500 in fees by June 8.

McKinney later said that the balance was due in two installments: the $292,500 portion paid for 30 occupied homes June 8, and the remaining $117,000, due Aug. 14.

-- Stephen Curran

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