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Developer Fee Proposal Would Generate $60M

Santa Monica City Council to consider requiring commercial and housing developers to help pay for public street improvements.

A plan to have developers pitch in for street improvements is up for City Council review Tuesday night.

The "transportation impact fees" would be assessed by the city on commercial and housing developers to offset a substantial amount of project costs in the next two decades.

Fees for housing developers would be as high as $7,800 per room and  $30.10 per square foot for commercial developers—the region's second-highest—after those of the Los Angeles International Airport neighborhoods of Venice, Marina del Rey and Playa Vista.

City officials estimate collecting $60 million in the next 18 years, nearly half of the $119 million in improvements the city forecasts spending on such projects as such as modifying the Fourth Street bridge, adding bike lanes across the city and expanding its real-time mobile and Web parking maps.

According to a report from David Martin, the city's community and housing development director:

A viable future network for auto drivers, pedestrians, cyclists and transit users would rely on investment by the private sector and the public sector. As proposed, the Transportation Impact Fee would offset part of the costs associated with the identified transportation improvements, but not cover the full cost of these improvements. City funds and County transportation funds, such as those from Proposition A, Proposition C and Measure R would need to be applied for and awarded.

Not all transportation changes will need to occur in the public right-of-way through capital improvement projects; new buildings will need to provide the infrastructure to support walking, cycling and riding transit on their own property through changes in the zoning ordinance and as negotiated through development agreements. These continued investments in the future of Santa Monica will help ensure the community’s on-going economic health and vitality.

City planning commissioners have looked at the fees as a way to stall development, which has picked up steam in spite of the recession and. They've been requested for several years now by the commission and the City Council.

The fees would be imposed under the California Mitigation Fee Act. Enacted in 1987, it allows local governments to charge fees, separate from taxes and special assessments, to defray the costs of constructing public transportation improvement projects.

Such fees are already being negotiated in Santa Monica under special agreements with developers who ask to build oversized hotels and mixed office/shopping/residential projects that don't adhere to the city's zoning and land-use rules.

If the City Council adopts a Transportation Impact Fee ordinance, the fee schedule would set the bar for the minimum amounts when negotiating fees for development agreements.

"The purpose is pretty simple and straight forward, to make sure development pays its fair share in mitigating new traffic in Santa Monica," Jeffrey Tumlin of Nelson\Nygaard Consulting Associates told the Planning Commission in March. "These types of fees are common across California."

The Planning Commission unanimously recommended approval of the ordinance. It did ask that so-called affordable housing units for  low- and very low-income earners be exempt from the fee. 

Transportation impact fees are already imposed in cities with similar markets, such as Irvine, Pasadena, San Luis Obispo, Santa Barbara County, West Hollywood, Palo Alto, Emeryville, Redwood City and San Francisco.

Fees in those cities range between $1,021 and $7,175 per housing unit and $1.20 to $20.28 per square foot for retail.  Offices and industrial spaces draw less per square foot, anywhere from 90 cents to $20.28 in some cities.

Santa Monica could get away with fees higher than those of other cities, because "we know this is a community that’s quite comfortable putting real pressure on developers," Tumlin told the commission earlier this year.

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Glenn E Grab August 28, 2012 at 05:26 PM
great, another tax disguised as a "fee"....

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