000505 : The Tolerance is less than twice resolution <value>, setting the tolerance to twice resolution.
The minimum x,y tolerance is 2* the x,y resolution. For details on tolerance and resolution, see Feature class basics.
Leave the XY tolerance parameter blank—a working default will be determined (calculated to be 0.01 millimeters on the ground)—or set an x,y tolerance that is appropriate for the data. If the tolerance was not set in the dialog box and you get this error, it could be that the x,y tolerance environment is set.