The "shocking" fees the City Council is considering imposing on businesses and developers to help pay for transportation improvement projects in the next two decades could drive them right out of Santa Monica, opponents said Tuesday.
"There’s a lot of talk and a lot of concern," said President Laurel Rosen. "We are worried."
Called "transportation impact fees," they would be levied on new commercial projects and on new subdivisions and homes built on vacant lots. The commercial fees would be as high as $30.10 per square foot—the region's second-highest, after those of the Los Angeles International Airport neighborhoods of Venice, Marina del Rey and Playa Vista.
For OTO Development—a company that has proposed —the TIF would be $560,000, said Regional Director Mike Gallen. He told the City Council on Tuesday night the proposed fee would significantly worsen OTO's ability to develop the projects.
LAcarGuy President Mike Sullivan echoed Gallen, noting he expects to pay a $1.4 million TIF to build a new Toyota store at Santa Monica Boulevard and 16th Street.
"I support the idea of some fee, but certainly not $1.4 million," he said. "I think a number one-third of that is one I wouldn't balk at."
City officials estimate collecting $60 million total, nearly half of the $119 million in improvements the city forecasts spending on projects such as modifying the Fourth Street bridge and adding bike lanes across the city.
In a report, city planner staffers said California cities increasingly rely on such impact fees to ensure the costs of infrastructure and services to support new development "are not born disproportionately by existing residents, businesses and/or property owners."
Santa Monica already imposes fees that help pay for parks, child care and cultural arts, they wrote.
The proposal to levy a TIF in Santa Monica has been around since 1991, but to fund the $134 million in planned capital transportation and street improvements, city officials are scrambling to find a new money source, said councilman Bobby Shriver.
"The city is probably not ready to say 'oh, OK we’ll stop doing all of the things we were doing with RDA," he said.
City Manager Rod Gould said the purpose of the fees "is not to just get money," but told the council if it were to lower the amount to Los Angeles area averages, "we're not going to be able to build $134 million in traffic relief projects" in the next 20 years.
Before the council decides whether to move forward with the fees, city staffers will do research to determine how they might impact mom-and-pop type businesses.
"We might end up imposing unintended consequences," said councilwoman Gleam Davis. "What we might end up doing is inadvertently encouraging more formula retail, which is exactly what we don’t."