BERKELEY (KPIX 5) — The University of California, Berkeley is asking its Board of Regents for approval to demolish a parking garage to build new classrooms and housing for students and faculty. But the development plans have set off a legal battle with the city.

The parking structure, just off campus at Hearst and La Loma Avenues, has become a tipping point in a long-running argument over how much the university should be paying the city for the services the city provides.

In the project documents, the university says the new housing is needed because student enrollment has unexpectedly ballooned since the school created its last “Long-Range Development Plan” back in 2005. But those were numbers the city has been relying on.

“The student population of the University has, since 2005, grown by about 30 percent,” said UC Berkeley spokesperson Dan Mogulof. But when reminded that the 2005 plan projected growth of only five percent, he said, “Okay.”

It’s not okay with the city. UC Berkeley is exempt from any property taxes, so the entire cost of services like police and fire are borne by the city. In 2005, the city sued and the University agreed in a settlement to pay an average of $1.2 million per year, a tiny fraction of what the taxes on such property would be.

And yet, “…they have not proposed a single dollar more to the city despite a 33 percent increase in population,” said Berkeley Mayor Jesse Arreguín.

The mayor says UC Berkeley is using the garage re-development to try to sneak the new population numbers into its long-range plan, without paying anything more to the city. So, now the City Council has voted to sue the university to get a new payment deal.

“The university has not voluntarily offered increased compensation or agreed to negotiate a fair resolution to this issue,” Arreguín said, “So we have to play hardball.”

It’s a discussion the university seems willing to have, now that it’s facing a lawsuit over it.

“When the population grows like that, that’s a time for conversation,” said Mogulof. “That’s a time for dialogue and discussion with the city.”

Preliminary discussions have already begun between the two parties, but the city says if the regents approve the development plan as expected, they will file their lawsuit.

Arreguín says a study shows overall costs related to the university were more than $21 million dollars in 2018. So he says a fair payment rate for the university may be in the range of $10 million per year.