HomeMy WebLinkAbout06/01/1993, 1 - TRANSPORTATION DEVELOPMENT IMPACT FEES MEETING DATE:
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City O� San LUIS OBI SPO gage i
COU14CIL AGENDA REPORT
FROM: William C. Stader, Director of Finan
Prepared by: Linda Asprion, Revenue Manager
SUBJECT: TRANSPORTATION DEVELOPMENT IMPACT FEES
CAO RECOMMENDATION
Introduce an Ordinance to print establishing transportation development impact fees and
adopt a resolution establishing fee amounts to be effective July 1, 1993.
REPORT-IN-BRIEF
Implementing developme-it impact fees has been the subject of in-depth discussion over-the
past four years and is consistent with recommendations from various Council adopted policy
documents and community groups. The proposed fees have been calculated under the
stringent.standards of AB 1600, which set forth requirements related to the calculation,
apportionment, administration, and enforcement of impact fees. The recommended
transportation development impact fee for a single family residence is $2,152, with fees for
non-residential projects varying based on their land use type and square footage.
It should be noted that the f;,es developed in the accompanying impact fee study are
recommended to be imp'.;mented at the levels identified in this comprehensive study with
the exception of fees for retail and motel/hotel developments. Implementation of the fees
for retail and hotel/motel are recommended to be 50% of the study costs in recognition of
the fiscal benefits these developments bring to the City.
OVERVIEW
Why should the City adop! transportation impact fees?
There are two compelling reasons for adopting transportation impact fees.
■ It is adopted City policy that new development should pay its fair share of the cost
of constructing the community facilities that are necessary to serve it,and impact fees
are one of the key ;trays of implementing this policy.
N If we do not adopt tran:.-portation impact fees, one of two outcomes will result:
• We will nor construct the transportation facilities necessary to accommodate
our General Plan and all residents will see circulation service levels decline
as a result.
• We will i:c,nstruct the facilities, but at the expense of other important
community services - police, fire, recreation, parks, cultural, and social
services - that do not have alternative revenue sources available to them. ,G
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COUNCIL AGENDA REPORT
These factors were important in 1987, when impact fees were first discussed as necessary
for the City's long-term health. Given our current fiscal situation, they are even more
important today insuring our long-term ability to deliver important services to our
community.
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DISCUSSION
Background
The implementation of transportation development impact fees ensures that new
development pays for itself, which will prevent existing residents and businesses from
subsidizing new developments. The need to address the implementation of development
impact fees has been under serious discussion since 1987 when the City's long-term financial
health was identified as a major objective during the 1987-89 Financial Plan process. In i
response to this objective, a Comprehensive Financial Management Plan (CFMP) was
prepared in 1989 which addresses the City's financial needs through the year 2000.
Implementing development impact fees was identified in the CFMP as a key source of new
revenue to support the City's long-term financial health. Recent economic trends
underscore the need to develop resources outside of the General Fund to finance the
infrastructure costs of new development.
In January 1990, the Council identified the need for citizen participation and involvement
in developing programs to ensure the City's long-term financial health. The Citizens'
Advisory Committee (CAC)was assigned this task and completed their extensive review and
evaluation of the City's long-term financial needs. The CAC's report, which was submitted
to Council at their February 5, 1991 meeting, recommended that the City establish
development impact fees at sufficient levels to ensure that new development pays its fair
share of the cost of constructing necessary community facilities. This recommendation was
subsequently adopted in the City's 1991-93 Financial Plan (page B-5). In summary,
implementing the recommended transportation development impact fee is consistent with
'findings from our previous long-term planning efforts and the 1991-93 Financial Plan
policies as well as with the existing Short Range Transit Plan, Council.adopted revenue
programs, and the Draft Circulation Element.
Assembly Bill 1600
On January 1, 1989, the legislature enacted AB 1600 which addresses the development and
implementation of local impact fees. Although AB 1600 does not limit local governments'
ability to impose regulatory fees, it does impose substantive procedural requirements related
to the calculation, adoption, administration and enforcement of impact fee ordinances. AB
1600 requires that a "reasonable relationship" must exist between the need and the cost for
a public facility and the development on which the fee is imposed. This requires
documentation for capital improvements attributable to new growth, which must be
consistent with applicable general plans and adopted specific plans.
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COUNCIL AGENDA REPORT
David M. Griffith and Associates, Ltd. (DMG) was hired to prepare a comprehensive
analysis of specific transportation projects and their costs required to support future
development in the City as well as to perform a compliance review of the allocation policies
and "reasonable relationship" requirements as stipulated in AB 1600. This study has been
completed and accompanies this report.
Methodology for the Development Impact Fees
The transportation impact fee study prepared by DMG comprehensively details the analysis
performed to determine the amount of the fees to be charged, and the direct relationship
of the fees to the capital improvement projects, or portions thereof, required to support
future development. AB 1600 establishes certain requirements that must be met by any i
local agency establishing, increasing, or imposing fees which are imposed as a condition of
development project approval. To satisfy these requirements the City must:
1. Identify the purpose of the fee.
2. Identify the use of the fee.
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3. Determine that there is a reasonable relationship between the:
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a. Use of the fee and the development type on which it is imposed.
b. Need for the facility and the type of development on which the fee is
imposed.
C. Amount of the fee and the facility cost attributable to the project.
Each of these key requirements is specifically addressed in the accompanying impact fee
study. The development impact fee must be reviewed annually to account for any changes
in the cost of the capital improvement projects or any other consideration affecting the
"reasonable relationship" between the fees and the cost of the improvements on which the
fees are based.
What projects are included in calculating transportation impact fees?
The Draft Circulation Element accepted by the Council in April of 1992 as the basis for
preparing the General Plan EIR is the primary source for identifying projects to be funded
by transportation impact fees. Cost estimates for the following projects were used to
calculate impact fees. While the Draft Circulation Element is the primary source for
identifying projects, not all projects identified in that document are listed below: projects
that should be the direct responsibility of new development to design and construct have not
been included in the cost base. This distinction is discussed further in the cost study, and
projects which should be the direct responsibility of new development are identified..
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Nii% COUNCIL AGENDA REPORT
Street Projects
The following street improvements proposed in the Draft Circulation Element have been
included in calculating transportation impact fees.
■ Widen Bridge and Modify Ramps Highway 101/Los Osos Valley Road
■ Widen West Side Higuera Street/High Street to Marsh Street
■ Widen Higuera Street/Madonna Road to City Limit
■ South Street extension to connect with Bishop Street
■ Widen Monterey Street/Santa Rosa to Grand Avenue
■ Grade Separation Orcutt Road/Southern Pacific Railroad
■ Widen Road and Bridge Prado Road/Highway 101 to Higuera
■ 20 Traffic Signals at Various Locations
■ Widen Bridge Madonna Road/Highway 101*
■ Widen Higuera Street/Madonna Road to High Street*
■ Widen Highway 101 through City
■ Various Congestion Management Projects
* These two projects have already been constructed. Since they were designed to serve
current and future traffic needs, a portion of their costs have been included in the
impact fee program consistent with AB 1600.
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Transit Projects
The following P transit improvements approved in the 1991 Short Ran a Transit Plan have
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been included in calculating transportation impact fees.
■ Fleet Expansion of 5 Buses
■ Bus Stop Amenities at Various Locations
■ Downtown Multi-modal Transfer Center
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Bikeway Projects
The following bicycle facilities proposed in the Bikeway Element of the 1990 San Luis
Obispo County Regional Transportation Plan and the Draft Circulation Element have been
included in calculating transportation impact fees.
■ New Bikeway in the Southern Pacific Railroad Right of Way
■ Bicycle Improvements and Facilities at Various Locations
As noted in the impact fee study, new development creates impacts on some or all public
facilities and services provided by the City by increasing the demand for those facilities or
services. If the supply of services is not increased to meet that new demand, the quality of
service declines for the existing community. When the City provides facilities or services to
satisfy the demand created by new development, it is producing a benefit corresponding to
the impact. As such, a reasonable benefit relation is present as long as the facilities for
which fees are collected and spent are available to serve new development. In this case, the
facilities and equipment addressed in this study would provide the necessary benefit by
accommodating the transportation needs of new development. �y_�
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COUNCIL AGENDA REPORT
Don't some of these projects benefit current residents and businesses?
Yes, but the fees have been calculated with the improvement costs apportioned between
existing and future development. Only that portion attributable to new development has
been used in calculating the proposed fees. This apportionment is based on transportation
planning and traffic modeling by the City's Community Development and Public Works
Departments.
How are costs allocated between diffenart types of lard uses?
As detailed in the accompanying study, the impact fees are based upon average daily
trips/miles (ADTM's), with the per trip impact fee rate calculated at $201.00. The number
of ADTM's per land use type have been calculated based upon data used by the Community
Development Department in projecting traffic impacts of future development.based upon
traffic modeling which were used in preparing the Draft Circulation Element.
Who pays development impact fees? How will t�Yaffect affordable hounn
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The proposed development impact fees will be paid in a lump sum by the applicant when
the building permit is issued. Companies and individuals building projects for resale include
the fees in calculating the cost of the house/facility and apply their profit margin
accordingly. In this sense, these fees may be passed on to the buyers of the new housing or
community development and reflected in the purchase price, but only to the degree that it
is profitable for the developer to do so. Because of the many factors that determine the
price of housing, it is very difficult to determine the effect of these impact fees on affordable
housing. For example, there are many cities with high impact fees which have affordable
housing, and many cities with low impact fees and little or no affordable housing. However,
production of affordable housing, along with all other developments, requires sufficient
transportation infrastructure and facilities to support the new development, and that is the
ultimate purpose of these proposed fees.
Are there any special Policy considerations?
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As a part of the City's strategy for economic stability, it is recommended that retail and
hotel/motel developments receive a 50% reduction to the fee identified in the impact fee
study. By reducing fees for these developments, there may be a shortfall of revenue needed
to construct transportation projects on which the fees are based, and AB 1600 does not
allow that shortfall to be made up by increasing fees for other types of development.
However, the shortfall can be subsidized using other sources of revenue such as sales tax
and transient occupancy tax revenues produced by the developments. As such, in
recognition of the fiscal benefits that retail and hotel/motel developments bring to the City,
it is recommended that the reduced fees be implemented.
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COUNCIL AGENDA REPORT
Are any caeditg adjustments or a nphons available?
The proposed ordinance provides for credits and exemptions under the following
circumstances:
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■ Construction of facilities or improvements by applicant. If the applicant for
approval of any development project is required by the City, as a condition of
approval, to construct facilities whose cost has been used in the calculation of impact
fees which apply to that project, the applicant shall receive a credit for that portion
of the total fees otherwise payable that are attributable to those facilities. If the
credit exceeds the amount of the transportation impact fees due on the development,
a reimbursement agreement with the applicant shall be offered. The reimbursement
amount shall not include the portion of the improvement needed to provide services
or mitigate the need for the facility or the burdens created by the development. j
For example, let's assume an applicant is required to install an $80,000 traffic signal
as part of a development (which is an improvement identified in the calculation of
the impact fees) and the transportation impact fees payable by the applicant are
$100,000, the $80,000 will be credited against the fees, reducing the amount payable
to $20,000. Or, same scenario, but the applicant only owes $50,000 in transportation
impact fees. In this situation, a reimbursement agreement in the amount of$30,000
will be offered the applicant.
However, credits and reimbursements are not allowed for any improvement that is
a specific condition of development but was not included in calculating the impact
fee. For example, a road extension or widening may cost $300,000 in addition to the
$100,000 in impact fees. However, if the improvement is a condition of development,
and was not identified as part of the project base in calculating the fees, no credit
would be applied. j
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■ Exemptions. The fees imposed under this ordinance shall not apply to the following: j
• Other government agencies. The rationale for this exemption is first, cities
do not have authority to charge counties, school districts, the State of the
Federal Government any fees which are not sanctioned by these agencies; and
secondly, the need for expanding governmental facilities is driven by increased
demands for service resulting from new development, so it is appropriate that
this cost be included in the fee for private sector uses.
• That portion, of a structure which existed before the addition of dwelling units
or the enlargement of floor area in a non-residential structure. If a structure
is destroyed or demolished, and replaced within two years from the date of
demolition, the impact fees shall be based on the service requirements of the -
new development less the service requirements of the development which it
replaced.
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ONGN COUNCIL AGENDA REPORT
How do we compare with other cities?
In October 1991, the State Department of Transportation released results of a survey they
performed to determine the extent of local traffic impact fee structures and transportation
funding sources presently in place by local agencies within District 5. The results of the
survey indicated that out of 31 cities and counties surveyed, a total of 17 imposed some form
of impact fee. While most of the jurisdictions imposing such fees negotiate the amount of
the fee with developers on a case by case basis, many cities throughout the State have
established fees using calculations based on either dwelling units, square footage,peak hour
trips (PHT), or average daily traffic (ADT).
The following chart summarizes impact fees charged by comparable cities for single family
residential (SFR) uses:
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Single Family
City Residential Fee
Brentwood $6,922 I
Camarillo $4,240 i
Half.Moon Bay $1,450
Livermore $2,240
Napa $1,853
Oxnard $3,826
Pismo Beach* $336.- $3042
San Clemente* $1,200 - $6,100
Tracy* $4,586 - $8,047
Vacaville $5,812
Ventura $5,245
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San Luis Obispo (Proposed) $2,152
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* These cities are divided into zones with each zone having a different rate.
The chart shows that the proposed development impact fees for San Luis Obispo are
comparable with other cities.
How will these fees affect development costs?
The following summarizes the impact of the proposed fees on development by using some
recently completed projects to show what fees would have been paid.
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1 COUNCIL AGENDA REPORT
Fee Calculation Total Fee
The Crossroads Credit for 6 SFR units (demolished) $(12,912)
Six Multi-family Residential Units 11,460
Retail - 17,528 square feet 59,473*
Service - 5,125 square feet 11,993
Total. $ 70,014
* Calculation based on recommended fee at 50% of the study costs in recognition
of the fiscal benefits these developments bring to the City.
O'Leary Building Office - 7,609 square feet $ 32,833
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Service - 1,300 square feet 3.042
Total $ 35,875
Walters' Bros. Bldg Office - 43,269 square feet $186,706
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Exhibit A provides a comparison of the proposed City impact fees on these projects and
some hypothetical projects, with the fees that other cities would charge for these same
projects.
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When will the increase be implemented?
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Pursuant to the Government Code, the Ordinance may go into effect 60 days after its final
passage. Within this context, it is recommended that the fees become effective on Thursday,
July 1, 1993 to simplify implementation.
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How wrff the fees be used?
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AB 1600 requires the City to "earmark" the development impact fees by category of capital
improvement. The funds may be invested, with any interest earned added to the fees, and
can be expended only for the purpose for which the fee was collected. This has been
interpreted to mean thw a specific capital project on which the fee was based can be
changed, but the funds must be used for the general stated purpose, i.e. transportation
improvements. The Director of Finance must annually report on the fees collected and
related expenditures. After five years, if the fee has not been expended or committed, and
the City cannot establish a reasonable relationship between the fee remaining and the
purpose for which it was charged, the unexpended or uncommitted fees (together with any
interest accrued) must be refunded to the current recorded owner of the property.
How will fees be adjusted over time?
Unless otherwise acted upon .by Council, the amount of the fees will automatically be
adjusted on July 1st of each subsequent year by the percentage change in the U. S. Bureau
of Labor Statistics consumer price index for all urban consumers (CPI-U), all-cities average
for the prior calendar year. ly_�
City of San 'LUI S OBI SPO -
COUNCIL AGENDA REPORT
COMMUNITY PARTICIPATION
As discussed above, the Citizen's Advisory Committee has comprehensively reviewed the
City's long-term financial health, including the appropriate use of development impact fees.
In concluding their review, .the CAC recommended the implementation of impact fees to i
ensure that development pays its fair share of constructing community facilities and as a part
of the bigger picture; to help ensure the City's long-term financial health. Their
recommendation was approved by the Council and incorporated into the 1991-93 Financial
Plan.
On October 19, 1992, a meeting was held with the Chamber of Commerce and the Building
Industry Association of the Central Coast (BIACO) to introduce the proposed impact fees.
After the meeting, the Chamber coordinated correspondence between the BIACO and the
City addressing specific questions and requesting additional information (Exhibits B & Q.
A concluding meeting with the Chamber and BIACO was held on January 29, 1993, where
some concerns were expressed regarding two specific projects - one included and one
excluded - in the fee calculation. The discussion of these two projects was as follows:
■ Prado Road. The BIACO expressed their concern that Prado Road interchange and
extension. from South Higuera to Broad was not included in the impact fee
calculation. This project is identified in the Draft Circulation Element as being built
as a condition of development since the benefits of the project are so site specific.
Accordingly, this project is not included as part of the base for determining
transportation impact fees.
■ SPRR Bike Path. The BIACO expressed particular concern regarding the inclusion
of the Southern Pacific Railroad right of way for the new bike path with an estimated
cost of $12,000,000 and an impact fee share of 30.6% ($3,672,000). This project is
included in the Bikeway Element of the 1990 San Luis Obispo County Regional
Transportation Plan and the Draft Circulation Element as a specific program, and
as such, it has been included as part of the fee base. The BIACO has requested this I.
project be deleted from the impact fee calculation. Deleting this project from the
fee calculation would reduce the bicycle improvement fee portion by $1328 (from
$17.71 to $4.43 per average daily trip) and the total impact fee from $201 to $188 per
average daily trip. For example, this would reduce the proposed single family
residence fee from $2,152 to $2,139.
CONCURRENCES
The Community Development. Public Works, City Attorney, and Administration staffs have
reviewed the proposed fees, and they concur with the recommendation.
������m►►���Ililllillp° ����ll city Of San Luis OBISPO
COUNCIL AGENDA REPORT"
FISCAL IMPACT
Under the City's current residential growth management plan (1% annually), the following
revenues are projected to be generated annually from the proposed transportation impact
fee:
Residential $354,000
Non-Residential* $195,000 * Non-residential fees have been calculated
based on the historic relationship between
Total $549,000 residential and non-residential
development
Based on current trends, significantly less revenue will be generated on an annual basis in
the near term (next 2 - 3 years). However, this provides a reasonable estimate of the long-
term financial resources that will be generated from this fee.
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ALTERNATIVES
There are seven basic alternatives available to the Council:
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■ Approve fees which are less than recommended. The Council could approve fees
that are less than those supported by the impact fee study. However, with the
"reasonable relationship" being established within the study.and the costs directly _
apportioned, this alternative would be inconsistent with adopted City policy, and as
such, it is not recommended.
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■ Do not implement transportation impact fees. Based upon the City's long-term
financial needs and adopted Council policy regarding the responsibility for new
development to pay its fair share of constructing necessary public facilities, this
alternative is not recommended. Not adopting the fees would cause existing
residents and businesses to pay a greater share of future transportation improvements
projects, or would result in fewer General Fund resources available to support other
City services such as police, fire, recreation, parks, and street maintenance.
■ Approve subsidy for retail and hotel/motel use that is different than the
recommended level. The Council could approve a subsidy for retail and hotel/motel
fees that is greater or less than the 50% reduction recommendation. The
recommended level recognizes the trade-off on a 50/50 basis between the need for
new development to pay for itself and the fiscal benefits of these types of
development.
■ Approve subsidies for other uses. Although there may be fiscal benefits associated
with other types of projects, retail and motel/hotel uses clearly have significant
definable fiscal benefits that distinguish them from other types of development. In
the interest of straightforwardly communicating the strategic benefits of retail and
tourist-oriented developments - consistent with our adopted City Mission Statemen _10
MY Of San WI S OBI SPO
COUNCIL AGENDA REPORT
of promoting the City as a "regional trade, recreation, and tourist center" - no
expansion of this subsidy is recommended at this time. The City's economic
development strategies are currently under review. If, as part of this process, other
strategic business types are identified that should also receive a subsidy, the impact
fee resolution can be amended at that time, with the recognition that the City will
produce less money to pay for future improvements.
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■ Developer financing options. In lieu of direct subsidies, or in conjunction with them,
the City could assist developers in financing these fees (as well as other impact fees
such as water and sewer) by establishing community facility districts on a case-by-case
basis that would offer long-term, tax exempt financing of these fees.
■ Delete selected projects. The Council could delete any project from the improvement
listing. It should be noted, however, that these projects are based several key
transportation and alternative transportation documents 'which serve as the
foundation for planning future transportation projects. Recalculating the fee based
on including or excluding specific projects is a very straight-forward and simple
process. If the Council has concerns with specific projects, those projects should be
discussed and retained or deleted, as adoption of some development impact fee is j
preferable for the long-term benefit of the City over not having such a fee.
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■ . Timing. Although the BIACO does not support this fee, they have suggested that the
City consider deferring or phasing in the fees. Although it is recommended that the
fees be implemented in full on July 1, 1993, adopting the fees with a deferred or
phased schedule is recommended over not adopting the fees at all. .
SUMMARY
Implementing transportation impact fees has been the subject of in-depth discussion over
the past several years. The proposed fees will be set at comparable levels with similar
communities while generating funds that will assist in meeting the City's financial
requirements for funding future transportation facilities. As such, it is recommended that
the Council adopt an ordinance implementing the transportation impact fees and adopt a
resolution establishing fee levels effective July 1, 1993.
ATTACHMENTS
IN Ordinance implementing transportation impact fees
IN Resolution establishing amounts for transportation impact fees
111i►�►�►�ii'�illillilfpu ��Dp� city Of San Luis OBISPO
COUNCIL AGENDA REPORT
EXHIBITS /
A. Transportation impact fee comparison with other cities
B. November 18, 1992 letter from Chamber of Commerce and Building Industry
Association of the Central Coast
C. December 14, 1992 letter responding to the Chamber of Commerce and Building j
Industry Association of the Central Coast
ENCLOSURE (Council Only)
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■ Transportation Impact Fee Study, David M. Griffith, March 15, 1993
(Copy available in City Clerk's Office for public review)
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/J¢'�a
ORDINANCE NO. (1993 SERIES)
,
AN ORDINANCE OF THE CITY OF SAN LUIS OBISPO ADDING CHAPTER 4.56
IMPLEMENTING TRANSPORTATION IMPACT FEES FOR ALL NEW
DEVELOPMENT WITHIN THE CITY OF SAN LUIS OBISPO
WHEREAS, the City Council has held a public hearing to consider proposed fees
to mitigate the impacts of new development on transportation facilities in the City of San
Luis Obispo; and,
WHEREAS, the impact fees are to be used to implement the goals and objectives,
policies,programs, and standards of the San Luis Obispo General Plan, Short Range Transit
Plan, and Bikeway Element of the County Regional Transportation Plan, and are consistent
therewith; and,
WHEREAS, the Community Development Director has determined that this
ordinance is exempt from the provisions of the California Environmental Quality Act
pursuant to Article 18, Sections 15061 (a) and 15273 (a) (4) of the California Environmental
Quality Act Procedures and Guidelines; and,
WHEREAS, the proposed ordinance promotes the public health safety and general
welfare;
WHEREAS, the �.-lroposed ordinance complies with the provisions of Government
Code Section 66000, et seq;
NOW THEREFORE BE IT ORDAINED by the City Council of the City of San
Luis Obispo as follows:
SECTION 1. A new Chapter 4.56 is hereby added to read as follows:
Chapter 4.56
TRANSPORTATION IMPACT FEES
A. Purpose.. In order it) implement the goals and objectives of the Circulation Element
of the City of San Luis Obispo General Plan, the 1991 Short Range Transit Plan, and the
Bikeway Element of the 1990 San Luis Obispo County Regional Transportation Plan, and
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to provide adequate transportation facilities to serve new development in the City of San -
Luis Obispo and to mitigate the impacts of that new development, certain public facilities
and improvements must be, or had to be, constructed or purchased. The City Council has
determined that transportation impact fees are needed in order to finance these facilities
and improvements and to pay for new development's fair share of the construction or
purchase costs of these facilities and improvements. In establishing the fee described in the
following sections, the City Council has found the fee to be consistent with the City's
General Plan, and pursuarrt to Government Code Section 65913.2,has considered the effects
of the fee with respect to the City's housing needs.as established in the Housing Element
of the said General Plan Land Use Element.
B. Transportation Impact Fees.
1. Transportation impact fees are hereby established as a condition of any new
development for which any of the following approvals or permits is required:
(a) Approvals of land divisions pursuant to Title 16 of the San Luis Obispo
Municipal Code,including approval of lot line adjustments,certificates of compliance,parcel
maps, tract maps and condominium conversions;
(b) Land use approvals pursuant to Title 17 of the San Luis Obispo
Municipal Code, including,rezo;dngs or the approval of development plans, site plans, minor
use permits, variances, but excepting approval of San Luis Obispo General Plan/Land Use
Ordinance amendments:
(c) For the issuance of any occupancy permit or final building inspection,
and
(d) All other approvals of real property development,which approvals are
subject to the jurisdiction of the City of San Luis Obispo and which approvals are subject
to the exercise of the discretion of the City Council, Planning Commission, or Community
Development Director. For purposes of this chapter, new development includes any change
of use or occupancy which increases the traffic service requirements of a development.
2. The said transportation impact'fees are established in order to pay for needed
facilities and improveme-its reasonably related.to new development within the City. From
time to time, the City Council shall, by resolution, set forth the specific amount of the
impact fees, the specific public improvements to be financed and their estimated cost,
describe the reasonable relationship between the fees and the various types of new
developments, and set forth the time of payment of the fees. Said resolution shall provide
for a method of adjusting the amount of the impact fees on an annual basis to account for
changes in the cost of construction or other considerations affecting the reasonable
relationship between the fees and the cost of facilities and improvements on which the fees
are based.
(a) For any development other than residential, the resolution shall provide
for payment of fees at the time of building permit issuance.
(b) For residential development, the resolution shall provide for the payment
of fees at the time of building permit issuance, except where the provisions of Section 66007
of the California Government Code require the collection of fees to be delayed until the
time of final inspection or issuance of a certificate of occupancy.
3. The City Council shall, at least once every five years, review the basis for
transportation impact fees to determine whether said fee is still reasonably related to the
impacts of development, and whether the facilities and improvements for which the fees are
charged are still needed.
C. Exemptions. The fees imposed under this ordinance shall not apply to the following:
1. Other government agencies.
2. That portion of a structure which existed before the addition of dwelling units
or the enlargement of floor area in a non-residential structure. If a structure is destroyed
or demolished, and replaced within two years from the date of demolition, the impact fees
shall be based on the service requirements of the new development less the service
requirements of the development which it replaced.
D. Applicant Construction of Facilities or Improvements. If the applicant for approval
of any development project is required by the City, as a condition of approval, to construct
facilities whose cost has been used in the calculation of impact fees which apply to that
project, the applicant sh011 receive a credit for that portion of the total fees otherwise
payable that are attributable to those facilities. If the credit exceeds the amount of the
transportation impact fee due on the development, a reimbursement agreement with the
applicant shall be offered. The reimbursement amount shall not include the portion of the
i
improvement needed to provide services or mitigate the need for the facility or the burdens
created by the development.
E. Limited Use Of Fees. The revenues raised by payment of the transportation impact
fees shall be placed in a separate account along with any interest earnings on that account,
and shall be used solely to:
1. Pay for the design and construction, including construction management, of
transportation improvements described in resolutions adopted pursuant to Section B, or to
reimburse the City for funds advanced from other sources to pay for said design and
construction.
2. Reimburse developers who have been required or permitted to install portions
of said facilities or improvements pursuant to Section D, hereof.
F. Fee Adjustments.
1. Each development is independent and no reductions to impact fees will be
transferrable to another development nor will an excess be refunded.
2. Any person whose new development is subject to impact fees may appeal to
the City Council for a reduction or adjustment of those fees, or a waiver of those fees,based
on the absence of any reasonable relationship between the impacts of that new development �.
and either the amount of the fees or the type of facilities or improvements funded by the -
fees. The appeal shall be made in writing and filed with the City Clerk, together with any
required appeal fee,within ten (10) days following notification that the fee is to be imposed.
The appeal shall state in detail the factual basis for the claim of waiver, reduction or
adjustment. The City Council shall consider the appeal at an appeal hearing to be held
within sixty (60) days after the filing of the appeal. The hearing may be continued from
time to time. The decision of the City Council on the appeal shall be final. If a reduction,
adjustment or waiver is granted, any change in the permitted type or intensity of land use
within the approved development project shall invalidate the reduction,adjustment or waiver
of the fee.
G. Unexpended Transportation Impact Fee Revenues.
1. Notwithstanding Section B.3., whenever any impact fee, or portion of an
impact fee, remains unexpended or uncommitted five (5) or more years after payment of
the fee, the City Council shall make findings once each fiscal year with respect to the
unexpended amount. The City Council shall identify the purpose for which the fee is to be
l 1
used, and demonstrate a reasonable relationship between the fee and the purpose for which
r ,
it was charged. The findings required by this section need be made only for monies in the
possession of the City, and need not be made with respect to any letters of credit, bonds or
other items given to secure payment of the fee at a future date.
2. The City shall refund to the then-current. owneror owners of the new
development project or projects, on a prorated basis the unexpended or uncommitted
portion of the impact fees for which need cannot be demonstrated pursuant to this section.
The City may refund the unexpended or uncommitted revenue by direct payment, by
providing a temporary suspension of impact fees or by any other means consistent with the
intent of this section. The determination of the means by which those fees are to be
refunded is a legislative act.
3. If the City Council determines that the administrative costs of refunding
unexpended or uncommitted impact fees pursuant to this section exceed the amount to be
refunded, the City Council, after a public hearing, notice of which has been published
pursuant to Section 6061 of the California Government Code and posted in three prominent
places within the area of the new development project, may determine that the said fees
shall be allocated for some other purpose for which impact fees are collected and which
serves the new development project on which the fees were originally imposed.
SECTION 2. A summary of this ordinance, together with the names of
Councilmembers voting for and against, shall be published once in full, at least five (5) days
prior to its final passage, in the Telegram-Tribune, a newspaper published and circulated
in the City. Pursuant to Government Code 66017, the ordinance shall go into effect at the
expiration of sixty (60) days after its final passage.
1 �i7
r
INTRODUCED AND PASSED TO PRINT by the Council of the City of San Luis
Obispo at its meeting held on the day of , 1992, on motion of
. and seconded by and on the
following roll call vote:
AYES:
NOES:
ABSENT:
Mayor Peg Pinard
ATTEST:
City Clerk, Diane Gladwell
APPROVED:
torn
j �-t8
RESOLUTION NO. (1993 SERIES)
i
RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO
SETTING FORTH THE AMOUNT OF TRANSPORTATION IMPACT FEES,
PROVIDING FOR THE COLLECTION AND ADJUSTMENT OF
SAID IMPACT FEES,
IDENTIFYING THE TRANSPORTATION SERVICES
TO BE FUNDED BY THE FEES,
AND ESTABLISHING A REASONABLE RELATIONSHIP BETWEEN THE FEES
AND VARIOUS TYPES OF NEW DEVELOPMENT
WHEREAS, the City of San Luis Obispo has prepared studies to determine the need
for transportation facilities and improvements to serve new development; and,
WHEREAS, a study entitled City of San Luis Obispo Transportation Impact Fee
Study, dated March 15, 1993, by David M. Griffith & Associates, Ltd. (hereinafter called
"Impact Fee Study"),which is incorporated herein by reference, has analyzed the relationship
between future development and the cost of needed transportation facilities and
improvements; and,
WHEREAS, that study was made available for public inspection and review ten (10)
days prior to a public hearing held on this matter on April 6, 1993; and public notice was
provided fourteen (14) days prior to the public hearing; and
WHEREAS., this Resolution shall become effective sixty (60) days from final passage
of Ordinance No.
NOW, THEREFORE, the City Council of the City of San Luis Obispo finds and
resolves that:
1. Findings.
A. The purpose of the transportation impact fees is to provide adequate street
improvements, transit improvements and bicycle facilities to satisfy the needs of new
development and to mitigate the impacts of new development on the City's transportation
facilities.
B. The transporntion fees collected pursuant to this resolution shall be used only
to pay for street, transit, and bikeway facilities and improvements and shall not be in lieu
of any other fee or tax.
1 J�-19
1
C. There is a reasonable relationship between the types of development on which
the fees are imposed and (1) the use of the fees and (2) the need for the facilities and
improvements.
D. There is a reasonable relationship between the amount of the fee and the cost
of the facilities and improvements attributable to the developments on which the fees are
imposed. The estimated costs of facilities and improvements, including financing costs, to
be paid for by transportation fees is shown in the Impact Fee Study. Those costs have been
allocated to new development on the basis of dwelling unit type (residential) or type of
development and size of development (non-residential), which are reasonably related to
traffic generation by the development project.
2. Cost Estimates. At any time that the actual or estimated costs of facilities identified in
the Impact Fee Study significantly changes, the Finance Director shall review the
transportation fees and daermine whether the change significantly affects the amount of the
fees. If the fees are significantly affected, the Finance Director shall, within thirty (30) days,
recommend to the City Council a revised fee to be incorporated into this resolution.
3. Amount of Transportation Fees. The amount of the transportation impact fees for the
1992-93 fiscal year is set forth in Table 1 attached hereto. Unless otherwise acted upon by - '
the City Council, the amount of the fees will automatically be adjusted on July 1 of each
subsequent year by the percentage change in the U. S. Bureau of Labor Statistics consumer
price index for all urban consumers (CPI-U), all-cities average for the prior calendar year.
4. Time of Payment.
A. Transportation impact fees for any development project or portion thereof shall
be payable prior to issuance of the building permit.
B. For any development project or portion thereof, impact fees shall be assessed at
the time of application and remain valid for as long as the application is proceeding through
valid processing as per the Uniform Administrative Code.
5. Separate Accounts, The Finance. Director shall deposit fees collected under this
resolution in a separate transportation impact fee fund as required by Government Code
Section 66006. Within sixty (60) days of the close of each fiscal year, the Finance Director
shall make available to the public an accounting of the fund, and the City Council shall
review that information at its next regular public meeting.
Upon motion of seconded by ,
and on the following roll call vote:
AYES:
NOES:
ABSENT:
the foregoing resolution was adopted this day of , 1993.
Mayor Peg Pinard
ATTEST:
City Clerk, Diane Gladwell
APPROVED:
tloy
TABLE 1
TRANSPORTATION IMPACT FEES
Land Use Category Impact Fee per Unit
of Development
Single Family Residential $ 2,152/DU
Multi-Family Residential $ 1,910/DU
Retail* $ 3,393/KSF*
Office $ 4,315/KSF
Service Station $22,261/KSF
Service Commercial $ 2,340/KSF
Industrial $ 1,246/KSF
Hospital $ 3,865/KSF -
Motel/Hotel* $ 999/Room* -
Other $ 201/Trip
* Fees for retail and Kotel/motel are set at 50% of the study costs in recognition of the
fiscal benefits these developments bring to the City.
DU = Dwelling Unit
KSF = 1,000 Square Fect
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Exhhibit
San Luis Obispo Chamber of Commerce
1039 Chorro Street • San Luis Obispo, California 93401-3278
(805) 781.2777 9 FAX (805) 543-1255
David E. Garth, Executive Director
November 18, 1992
Mr. Bill Statler
Finance Director
City of San Luis Obispo
990 Palm Street Box 8100
San Luis Obispo, CA 93403-8100
Dear Bill:
On behalf of the Chamber of Commerce, I want to thank Ken Hampian
and yourself for taking time to share your plans for the proposed
Transportation Impact Fees with us. Following your presentation
of October 19, we met again to review your materials. Noted
below are the questions we have pertaining to the conclusions in
the material.
1) Regarding the Street Improvements noted in Appendix A,
Exhibit 2, we have several questions.
-- Has the current level of service (LOS) been determined for
the various projects? We might suggest indicating those
levels, if they've been determined.
-- How were the specific improvements chosen to be included
in this study?
2) Regarding the Future Development/Weighted Trip Generation
charts in Appendix B (B-11 B-2) , Exhibit 3b, we have one
question.
-- How was the Projected New Development (4] determined for
each Land Use Type?
ACCREDITED
dY ERO WC ER
C---OEP 01 CO.uC-CE
GE
� a
Bill Statler/Transportation Impact Fees
November 18, 1992
Page 2
3) Other general questions include:
-- The language of AB1600 requires that their be a direct
relationship between the projected cost of the improvement
and its use. Can this be justified in all the projects
noted?
-- What version of the General Plan was used in preparing
this report? (Is it the same version for which the EIR is
being prepared?)
-- What version of the Airport Area Specific Plan was used?
(Was it the Conceptual Plan approved by the City Council?)
-- Can you provide us with the projected fees (sewer, water,
parks, water meter, traffic, retrofit, housing) for a new
50, 000 sq. ft. commercial building in San Luis Obispo.
-- Can you explain the rationale behind exempting government
from sharing in these costs?
We look forward to meeting with you and Ken in the near future
to continue the discussions for these proposed fees. The
answers to the above questions will help us better understand
how you determined the fee structure. I will be happy to
distribute your answers to our Chamber group, as well as arrange
a future meeting.
Thank you for your help with this.
Sin erely,
Lan ans
Di ector, Governmental Affairs
cc Ken Hampian
Exhibit
1!11111 Ilu
city of sAn tuis oBispo
990 Palm Street/Post Office Box 8100 • San Luis Obispo, CA 93403.8100
December 14, 1992
Mr. Lance Evans
Director, Governmental Affairs
San Luis Obispo Chamber of Commerce
1039 Chorro Street
San Luis Obispo, CA 93401
Dear Lance,
Thank you for your letter of November 18, 1992. We are pleased that the Chamber of
Commerce and the Building Industry Association are actively participating in reviewing the
proposed Transportation Impact Fees. For ease in continuity we have repeated your
questions in the same order as presented in your letter with our response directly following.
1. Regarding the Street Improvements noted in Appendix A, Exhibit 2, we have several
questions.
A. Has the current level of service (LOS) been determined for the various
projects? We might suggest indicating those levels, if they've been
determined.
B. How were the specific improvements chosen to be included in this study?
Response. The specific street improvements listed in Appendix A are included in the
Hearing Draft of the General Plan Circulation Element. In May, 1992, the City
Council accepted the draft element for purposes of starting the preparation of an
EIR.
The City has developed a computer traffic model that estimates existing Level of
Service (LOS) for City arterial streets and state highways. "LOS" is a measure of
traffic flow. Free flowing traffic is rated as LOS "A" or "B" while high levels of
congestion is rated as LOS "E" or "F'. Most City streets are currently at LOS "C" or
better.
The Circulation Element sets a standard of LOS "D" for arterial streets and highways
outside the downtown, and LOS "E" for downtown streets. The street improvements
in Appendix A are needed to serve future growth and to maintain adequate traffic
flow (eg. traffic flow that meets the LOS standards included in the Circulation
Element).
While the intent of Appendix A in the Transportation Impact Fee Study is to simply
identify the projects and the percentage of the project cost associated with new
development for the basis of the proposed fee calculation, we will either provide
general LOS information as a footnote or reference the Circulation Element as a
source for specific street LOS standards.
2. Regarding the Future Development/Weighted Trip Generation charts in Appendix
B (B-1, B-2), Exhibit 3b, we have one question.
A. How was the Projected New Development [4] determined for each Land Use
Type?
Response. The Hearing Draft of the General Plan Land Use Element (February,
1992) was used to project future development. Projections were based on the
development of vacant land within the City (called "infill"), further development of
under used land or the replacement of old buildings with bigger buildings (called
"intensification") and the annexation and development of land at the periphery of the
City (called "expansion"). These land use projections were used to develop a
computer model which provides forecasts of future traffic conditions. The
improvement costs were then allocated to different types of development using a
weighted trip generation index based on average trip lengths adjusted for "pass-by"
trips. Appendix B of the Transportation Impact Fee Study provides this calculation
by land use type.
3. Other general questions:
A. The language of AB1600 requires that there be a direct relationship between
the projected cost of the improvement and its use. Can this be justified in all
the projects noted?
Response. Yes. AB1600 requires there to be a "reasonable relationship" between
the amount of the fees and the portion of the cost of the facilities needed to serve
future development. The primary purpose of the Transportation Impact Fee Study
is to document this "reasonable relationship" and the updated Circulation Element
serves as a source document.
B. What version of the General Plan was used in preparing this report? (Is it
the same version for which the EIR is being prepared?)
Response. The Hearing Drafts of both the General Plan Land Use Element
(February, 1992) and the Circulation Element (May, 1992) were used to prepare this
report. The EIR currently being prepared uses these two documents to define the
"project"for which it is being prepared. (Note: Public Hearings to consider adoption
of the Land Use and Circulation Elements are slated for Winter quarter, 1993.)
C. What version of the Airport Area Specific Plan was used? (Was it the
Conceptual Plan approved by the City Council?)
Response. The conceptual plan for the Airport Area Specific Plan was reflected in
the February, 1992 General Plan Land Use Element which has been accepted by the
Council for the purpose of preparing the EIR.
D. Can you provide us with the projected fees (sewer, water, parks, water meter,
traffic, retrofit, housing) for a new 50,000 sq. ft. commercial building in San
Luis Obispo.
Response. Currently, the City does not have, nor is there any work in progress to
develop impact fees for parks or housing. The retrofitting requirement is not a fee
paid to the City and as such it is not shown as an impact fee. However, the City is
exploring the possibility of providing credit toward water impact fees based upon the
cost of retrofitting. It is anticipated that this proposal to modify the calculation of
water and sewer impact fees based on retrofitting costs will go before Council at the
same time as Transportation Impact Fees.
Water and sewer impact fees are based upon meter size and type of tenants, which
of course depends on the anticipated use of the commercial facility. For this
example we have projected a 1 1/2" meter and retail only tenants.
Water S 10,510
Sewer S 8,870
Water Meter $ 370
Transportation S
Total Estimated Impact Fees $ -52,8;6
These fees are exclusive of development review fees for planning, engineering, and
building permits. These fees vary significantly based on the types of discretionary
approvals necessary. For illustrative purposes only, the following is an outline of the
development review fees required based on the following assumptions:
No lot creation is required
Built on three acres; 100 foot frontage
Construction costs = $2,875,000
Public Improvement Costs = $112,500
Planning Fees
Planned Development Permit $ 1,547.00
Environmental Review 516.00
Use Permit 670.00
Architectural Review 650.00
Total Planning $ 3,383.00
Building & Safety Fees
Grading Permit Fees $ 66.00
Plan Check Fees 6,818.00
Building Permit Fees 10,490.00
Total Building & Safety Fees $17,374.00
Engineering Fees
Improvement Plan Check $ 1,893.50
Construction Inspection 3,328.50
Total Engineering Fees $ 5,222.00
Total Development Review Fees $25,979.00
E. Can you explain the rationale behind exempting government from sharing in
these costs?
Response. First, cities do not have authority to charge counties, school districts, the
State, or the Federal Government any fees which are not sanctioned by these
agencies. Secondly, the need for expanding governmental facilities is driven by
increased demands for service resulting from new development, so it is appropriate
that this cost be included in the fee for private sector uses.
We hope that these responses assist in determining how the fee structure was determined.
We appreciate your handling the distribution of this response both to the Chamber and the
Business Industry Association. We anticipate taking the proposed Transportation Impact
Fees to the Council in early 1993. Your cooperation in distributing this information and
arranging a future meeting is greatly appreciated.
Thank you for your assistance.
Sincerely,
William C. Statler
Director of Finance
CC: Ken Hampian, Assistant City Administrative Officer
Terry Sanville, Principal Planner
J'
Mr NG AGENDA /
DAl t ITEM # /
May 29, 1993
COPIBTO:
❑•Dotes Acton ❑ FYI
Honorable Mayor Peg Pinard Z Carat 1;i'CDDDI&
Council members Penny Rappa, Bill Roalman, ffCAO C'fRN.D11
Dave Romero and Allen K. Settle 12TACRO ElFML- HW
City Hall dATTOMN'EY ❑ FWD>R.
ciswo.T=❑ POLICE CR
990 Palm Street ❑ Mcnrr.MU14 C] P.ECDIR
San Luis Obispo, CA 93401 ❑�c ❑❑ UnLDIR.
ficeDear Mayor and Council members:
The Business Coalition would like to state its opposition to the
Transportation Impact Fees. The Coalition members have
diligently researched the proposed fees over the past several
weeks and have several concerns over the impact the fees would
have on the economy, business climate, and competitiveness of San
Luis Obispo.
The Business Coalition opposes the fees for the following
reasons:
1. The fees are a disincentive to expanding and remaining in
San Luis Obispo.
with increased competition County wide, San Luis Obispo
would lose valuable sales tax revenue, jobs, and
property taxes if the fees were implemented because new
business will develop in those communities without such fees.
This would be destructive to the current level of services
provided by the City.
2. The total impact of the fees have not been delineated in
the staff report.
Economists understand that a drop in sales occurs with
each price increase, and; a similar reduction in the
number of projects would occur. No research appears to
have incorporated this decreased activity into the scope
of the fees impacts.
3. The background information on the infrastructure projects
included in the staff report is insufficient.
The need for, cost analysis of, and relation to new
development of the recommended improvements has not been
clearly detailed in the staff report. Public input on
the proposed projects has been missing along with a
comprehensive cost analysis. RECEIVED
tlD lodsmo ST n-
1ICNnoo A, JUN 1 1993
T
Nnr Clrr doll
/� SAN LUIS QslsfPo,CA
7 �7���
4. The Economic Task Force has not had the opportunity to
complete an analysis of the fees and make a
recommendation to the City Council.
The Transportation Impact Fees and all other fees, both
current and future, should have the input of the Task
Force before a City Council action is taken.
The lack of an adopted General Plan, and supporting components
including the Land Use and Circulation Elements, is a crucial
document that serves as a foundation for the development of any
infrastructure program.
The total analysis on the Transportation Impact fees has not been
compl ed, therefore; the Business Coalition is asking the City
Cou to not approve the fees at this time.
r//j " �f
o ard,
B ss C ition, ransportation Impact Task Force Chair
To own
Bus' s Coalition, Ch r
J h Cribb
As on of Realtors, President
� w
is Moresco
Building Innd'ustry Association of the Central Coast, President
eek Cleeves
Bu 'ne s Im rovement Association, President
Charlie ruit
Chamber of Commerce, President
Ma�x
Mannifacturers Association
Terry Reay
Montere eet Motel Association
Ca orence
San Luis Property Owners Association, President
BUILDING INDUSTRY ASSOCIATION OF THE CENTRAL COAST
P.V. box 61$0 • $onlo Modo,Cu 93456
(805)978-7196 FAX(805)349-0693
May 25, 1993
Honorable Mayor and Members of the City Council
c/o Diane Gladwell, City Clerk
City of San Luis Obispo
P.O. Box 8100
San Luis Obispo, CA 93403-8100
Re: 'FRANSPORTATION DEVEMPMENT IMPACT FEES
Dear Mayor Pinard and Council Members:
After lengthy review and discussion with city staff, the Building Industry Association of
the Central Coast is not able to support the implementation of the proposed
Transportation Development Impact Fee at this time. We make this determination for
the following reasons:
1) The fee is based on Circulation, Housing and Land Use Elements that have not, as
yet, been adopted by the City Council. We believe that any valid fee program
must be supported by and based on valid documents.
2) Some of the projects, most notably the bike path along the railroad right of way,
do not fall within the AB1600 guidelines. Specifically, "Developer Fees" cannot
be used to increase future levels of service beyond those that currently exist.
3) This fee puts "infill" projects at a distinct disadvantage to "specific plan" area
projects. "Infill" land is typically much more expensive than land in outlying
areas. In order to be competitive developers will be forced to seek cheaper land.
This is contrary to the city's long standing policy of promoting "infill" projects and
projects that generally support existing.local business enterprises.
�r Transportation Development _,pact Pees
May 25, 1993
Page 2
4) Our industry, our local economy and indeed the city cannot afford to cripple new
development beyond its current, considerable, financial problems. Increasing
development costs at this time will undoubtedly curtail construction and thus ensure
that the city will not get much needed increases in property, sales and related
business tax revenues normally associated with new development. It will also
ensure that the local economy will not get an added boost and the local building
industry will not recover from one of the most severe recessions ill our history.
Having said all the above, however, we do recognize that as developers it is ill our
interest to have decently financed cities to work in. We want cities to be well
capitalized with good roads, parks, libraries and other infrastructure. Towards this end
we believe that most developers would be willing to help out through fee progra,lis
provided there is still profit in their projects and the fees resulted in a beautiful, clean
city. The problem right now, however, is there is no profit and, accordingly, no
margin for more fees. We, as an industry, are working hard just to hang on.
Additional fees, as needed as they may be, will reduce, if not stop, development and
therefore hurt both the (level opment/constructioil industry as well as our city.
It is in this light and in the spirit of cooperation to find solutions to help all of tis that
we make the following recommendations. first, the city should do an economic
analysis on what impact any particular fee program would have on our economy. This
study should reflect that each city must compete for development with other cities in its
surrounding area. This type of empirical data will take the emotion out of the issue
and put everyone on a sound playing field with useful information. Second, the city
should look at some tradeoffs that may help both the city and the developer such as:
1) Significantly reduce the entitlement process time, perhaps by curtailing ARC
involvement, Time is money and that is money the city could have.
2) Put more certainty in the entitlement process, thus reducing the developers risk.
The less the risk the lower the rate of return the developer needs to have. This
savings is money developers would be happy to share with the city in the forst of
fees.
3) Be conservative in adding costs to a project through additional requirements.
Make sore that the extra items required are truly necessary. Lach added dollar of
cost today, is at the expense of something else.
4) Charge any development related impact fee at close of escrow or, in a lease/rent
situation, upon occupancy. This cuts down the developers tip front cost and his
interest carrying cost. Again, developers would be happy to pass this savings on
to the cities.
The city must realize that they are partners in the real estate development and
.a Transportation Development pact Fees
May 25, 1993
Page 3 - --
construction process. Cities benefit from and indeed need new development.
Accordingly, San Luis Obispo must now be part of the solution. If the city wants more
money out of new development they must help developers find ways to get it without
burdening either party.
Sincerely,
BU INDUSTRY ASSOCIATION OF THE CENTRAL COAST
De Moresco
President
I
LZ�2 GCl� -
-1nri1 n lnoz
!har lie Fruit, YI eS'1dent
Sa i Luis vbispr; Charnber of Commerce
C/O Commerce Bank
P.O. BOX 1069
San Luis Obispo, Ca 93406
Dear Cha.riie,
Yesterday you alerted us to a proposal the city has to create a
"transportation surcharge" to be paid by businesses who expand by building
or adding onto their e�dsting facilities. The figure you threw out for this new
"tax" was $3.00 per square foot and you asked how we would react to such a
tax and how we felt about the ability to grow our business in San Luis
Obispo. The first comment I would have is San Luis Obispo wouldn't have
such a transportation or pollution problem if employees who worked in the
city could also afford to live there. But if the mission of the city is to get all
businesses to move out and locate where their employees live, I think they
are on the right track.
I don't know if you are aware, but a group of local manufacturers and
distributors have recently joined together out of the need to address such
Issues. We feel compelled to join together because as individuals we feel our
voice and our impact on the community is unheard. Since the mission of that
committee is to be very positive and to work to educate the general public
about the value of business, and hopefully as a result influence
governmental decisions makers to understand and appreciate that value, I
must remove myself from that committee when responding to your request
for input.
Ill try to be brief. If I were asked to pay $36,000 in taxes for the privilege
of adding 12,000 square feet onto my current facility (which in fact we are
doing), I would plan to move my business to Paso Robles or Santa Maria
where business is currently much more•"toierated" and therefore my costs of
3580 Sueldo • San Luis Obispo, California 93401 • (805) 543-6142
expansion would be less. Our business is also projected to grow significantly
in the nett five years and it is clear to us that the current expansion will not
support our growth. Our research t.) date makes it fairly clear that we
cannot expand further in San Luis Obispo; there is not available property
and building costs are becoming prohibitive (and this is without the
proposed new tax!). Our next step therefore, depending upon the type of
business we focus on, will require us to build a plant outside the area.
Because of our existing staff, it would be our hope to locate this plant in Paso
Robles. However, it might make more sense economically to locate the plant
in the San Joaquin Valley.
Projecting a number of years down the road, it is likely.that the majority of
our growth will take place utilizing this other plant, and at some point I'm
sure it is going to look economically inviting to consolidate and work out of
one larger facility. If that should take place, San Luis Sourdough would
relocate as it is clear we cannot expand in San Luis Obispo. And what if at
some point we are acquired by a larger company? Again, I would assume
we would be relocated outside the area. Why? Because any company
purchasing us would do it for our potential and she can't realize our potential
without growing our company, and we can't grow our company any further
in San Luis Obispo.
I guess it is very frustrating to be a business person and feel like the
government does not understand your need to grow.. it seems that if
government needs more resources they just add more taxes and fees and
surcharges. If business needs to grow, it must sell more product, and those
of us who manufacture things for sale must have larger facilities, more
equipment, more raw materials and more people to do that. So, why do we
want to grow? Well, first of all our costs keep going up, many related to
government fees and taxes, and we must grow in order to pay those. But
primarily and most importantly, we must grow to take care of our
employees. When you become an employer,you assume a tremendous
responsibility for the well being of the people that you hire to work in your
business. Those people must have the opportunity to better themselves or
they will leave to find those opportunities. Business will not survive and
proper unless we can provide our employees with better salaries,benefits
and working conditions and the only way we can do that is to sell more
product and realize profit that we can give back to our employees.
3580 Sueldo San Luis Obispo, California 93401 (805) 543.6142
The second thing that is very frustrating is to try and be the kind of business
that gives back to the community and feel like it is not appreciated. Aside
from all the taxes that we pay to ail levels of government, we pay out over
$1,500,000 in salaries that fuel the local economy. In order to grow our
company,we have had to go outside the local area to market our products
and as a result we, like many other local businesses, are now bringing a
significant amount of sales revenue into San Luis Obispo from outside areas.
During our ten years in business, including our current addition, we have
supported local contractors with more than $1,700,000 in business. And the
list goes on.
In addition to our direct financial impact, as a company we contribute
heavily to the community. I have one person who works almost full time
responding to requests for support from the community. We discount or
donate product to hundreds of causes annually; this past year we provided
$60,000 worth of product to organizations who feed the homeless. Does that
save the government money? I would certainly think so. We serve on all
kinds of community boards and committees as part of our commitment to
'give back" to the communities in which we live and work. And San Luis
Sourdough is just one of the many companies that provide such support. All
of this involvement costs a great deal of money. We do it because we care,
•tee love this area and it is painful to be viewed as "business-the evil force
that will grow and ruin the community".
Business ventures of late have given us the opportunity to investigate the
receptiveness of other areas to growing businesses and it appears that the
permit process, available property and costs of construction, are significantly
lower in the San Joaquin Valley. In addition there is a readily available
labor pool and access to transportation resources to carry our products both
north and south. While assisting some friends to establish a bakery similar
to ours in Spokane, Washington, we were amazed at the savings they will
enjoy operating their business there as opposed to operating in California.
However,the contrast having most impact on us as local business people,
was the support and encouragement received from the city, they want
business, they appreciate what business brings to their community.Enclosed
3580 Sueldo San Luis Obispo, California 93401 • (805). 543-6142
rUj,W75Z
also is a letter I just received from the State of Kansas that I thought you
might also want to see.
So, what makes me feel business is not welcome or supported in San Luis
Obispo? First the planning and permit process. We began planning our
current addition two years ago so that we would not be held up by the
process. How may businesses can project what they need two years in
advance? Secondly, when we were dealing with the drought we were
effectively told by the city that we would have to stop grovyYing, and in fact
reduce our production in order to comply to their water allocation. If we
had not been able to drill a well on our property we would have been out of
business since our ability to pay for our new facility was based upon
growing. Finally, with our current addition, ,we were asked to retrofit
approximately 35 toilets in order to get our permit to build. We knew this
was a requirement and were prepared to pay the $3500 we assumed this
would cost. Where did that figure come from? Well, when you listen to the
advertisement put out by the city it says something like, when you retrofit
your plumbing with a low flow toilet and shower head,you can bring your
receipts into the city and they will give you $100. We assumed that we
would pay the city, and the city would reimburse 35 residents who
completed the retrofitting. Wrong! As a business who wants to develop and
grow, you must hire a contractor who then has to find 35 toilets needing
retrofitting. He can't give you an accurate bid for doing the job because it
depends upon how many places he must go to do the job and what he finds
when he gets there. Sometimes the flooring must be replaced, sometimes
the new toilet doesn't exactly cover the hole or mesh with the current
plumbing,and then of course if the "customer" is not satisfied with the job,
he must return and make it right. So, instead of costing us $3500 and a
simple payment made to the city, there is lots of time and research involved,
all costing money, plus the final payment to the contractor for $6800.
Charlie, I tried to be brief, and I'm sorry I could not keep that commitment.
Dave and I really do love it here, and we really do try to run a business that
the community can be proud of. We are also committed to growing that
business so that we can take care of our employees and also give back to
society, and selfishly, we want enough back so when we are ready to retire
we can enjoy the fruits of our labor. And you can only do that if you grow.
One final comment I will make about running a business. Unlike many jobs,
3580 Sueldo • San Luis Obispo, California 93401 • (805). 543-6142
LZrL C'!�J -
1
including government, a business owner never goes home ,A7ithout having his
business on his mind, especially the obligations he carries. Most of us have
the majority of our assets committed as collateral to fund the growth of our
companies. If we fail, we lose it all. I don't think most government people
have a concept of that. There are many revr.rds to having pour own
business, but there are many, many risks as well. It would sure be nice if
one of the rewards was to be appreciated by your local community and to be
encouraged to grow your company. If we could only convince them that we
have the answer filo the fiscal problems government is having: encourage us
to expand so we can keep fueling the economy by bringing in money which
is spent in the form of salaries and purchases of goods and services. Don't
tax us for growing and force us to move.
Thanks for listening and good luck!
Charlie Nest
3580 Sueldo • San Luis Obispo, California 93401 (805). 543-6142
1
HOTEL RENOVATION MODEL
This model has been created by Sterling Hotels Corporation as a
representation of the expenses incurred by a hotel developer in a typical
remodel/refurbishment of a lodging facility in San Luis Obispo. In
assessing costs to this model, certain assumptions have been made:
• Room Count: 50
Location: Downtown SIA District
• Building Permit Issuance: Post July 1, 1993
• Number of Employees: 8-10
• Cosmetic Refurbishment Only/No Changed Use
• $1 Million Refurbishment Budget
Fees to the City of San Luis Obispo include all permits, and mandated
building fees at the assumed construction start date, Additional
ancillary costs related to City requirements are included as notes to this
model.
• PIanning Commission/ARC Fees $ 650.00
• Building Permit Fees 4,500.00
• Transportation Impact Fees 49 950.00
Total Mandated City Fees $55,100.00
Percentage of Total Budget in Fees 5.5%
Other possible costs of the project include water and sewer retrofit fees
should the current level of water service into the prosect be insufficient
to meet City standards. Cost of water/sewer retrofit is estimated at an
additional $10,000.
City Fire Department requirements mandate installation of a sprinkler
system to meet fire codes. Cost of the sprinkler system is $54,800.
Estimates to meet seismic retrofit standards upon resolution of City
ordinance requirements pursuant to our Structural Report are estimated
at$90,000 to $150,000.
Summary:
• Mandated City Fees $55,100.00
• Possible Water/Sewer Retrofit 10,000.00
• Possible Seismic Retrofit 150,000.00
• Sprinkler System Upgrade 54,800.00
TOTAL CITY REQUIRED COSTS $269,900.00
Percentage of Total Budget 26.99%
DOh'NTW CENTER
PROPOSED TRAFFIC IMPACT FEE
JUNE 1, 1993
SF FEE IMPACT FEE
BUILDING A - THEATER LEVEL
28,487 $3.39 = $96,570.93
BUILDING BIC - GROUND LEtiTL
RETAIL 10,156 $3.39 = $341428.84
BUILDING D - GROUND LEVEL
RETAIL 19,446 $3.39 Q $65,921.94
BUILDING B - GROUND LEVEL
RETAIL 41800 $3.39 c $16,272.00
BUILDING F,G - 2 STORY
RETAIL 20,583 $3.39 = $69,776.37 -
TOTAL BUILDING AREA 83,472 $3.39 = $282,970.08 (ONE TINE FEE)
BENEFITS OF TEE DOiiNTOidI CENTRE:
The Project will oontribute on a continuing annual basis:
a. Retail Sales of $ 25.30 zillion/year. This equates to sales tax revenues
for the City of $250,000-$300,000 per year,
b. Property tax (presently vacant) of approximately $ 200,000 per year.
c. Employee inoome generated Will be approximately $ 4 zillion per year.
d. Intangible monetary benefit is increase sales of adjacent businesses.
104/27/93 .11:51 'MOS 541 4023 WOOLPERT & ASSOC. Z001
l
Craig R. Smith
AftCHIT8CT
..........................................................................
890 Monterey Street,Suite p, San Luis Obispo,CA. 93401
Post Office Box 831, San Luis Obispo,CA.93406
(805)544-3380
April 16, 1993
THE PALM STREET ENTERPRISE'
clo Mr.Mark Woolpert
1626 Palm Street
San Luis Obispo,CA. 93401
RE: Proposed Transportation Development Impact Fees
Dear Mark,
Per your request I have reviewed the consultants study for the proposed fees, that may impact our
project, and have calculated the following breakdown as a result of the examples used:
Building A: $ 26,348.00
Building B : $ 17,354.00
Total : S 43,702.00
Applied against this total would be the credit for the existing buildings that are either going to be
removed or demolished. This total applied credit amount is unclear and requires some
interpretation to calculate. I have tried to come up with a minimum vs. maximum of just what the
possible credit may actually be. The total range is as follows
Npinimum : $ 4,304.00
Maximum: S 17,280.00
Therefore, the total fee could be between$ 39,398.00 and$ 26,422.00.
Also unclear,as of the writing of this letter,is the true date of implementation:The report
recommends July 1, 1993. However,just like the unit cost for die unpact fees, die implementation
date has yet to be approved by the city council.
I am certain we can have a building permit with building A if this July 1 date is imposed. I am not
sure about building B,however, I will make ever effort to go forward as fast as possible.
In closing,I would recommend we attend the public hearings and participate in the efforts being
organized to mitigate,lessen or eliminate this very unnecessary cost
Call me,should you wish to discuss this further, or go over the specifics of the study.
Sincerely,
f
- - Ciwg4 R. S ith
Architect
cc: Steve and Jim Sinton
1 `
I
April 21, 1993
Charlie Fruit
Chairman, Economic Task Force
545 Higuera Street
San Luis Obispo, CA 93401
Dear Charlie:
After reviewing the proposed Transportation Impact Fees, I thought it might be helpful
to have some indication of what current building related fees are.
As you know, we were the architects for the recently completed new Carl's Jr. and
adjacent office building in the University Square Shopping Center. Having experienced
the current burden placed on development by the City, I will try and outline the impact
felt by this project.
The project included the demolition of an existing building and the construction of two
new buildings. The construction cost was approximately $600,000.00. There were two
areas that imposed additional costs required by the City. The first was the various fees
and the second was the off-site improvements and studies required by the.City to be
completed by the owner.
The fees included the following:
Architectural Review, Lot Line Adjustment..............$ 1 ,067.00
Plan Check Fees..........................................................$ 2,063.00.
Building Permits.....:..................................................$ 4,400.00
Water & Waste Water Fees........................................$ 26,843.00
School Fees.................................................................$ 1 ,540.00
Cal Trans Permits......................................................$ 2,275.00
Lot Split Fees..............................................................$ 750.00
Sub Total.....................................................................$ 38,938.00
Off-site Improvements Required included:
Replacement of City water main................................$ 40,000.00
300 feet of new right turn lane,
bike lane, and culvert; Hwy 1..............................$ 53,250.00
Sidewalk replacement................................................$ 1 ,400.00
Two new street lights.....................................6...........$ 9,000.00
Fire hydrant.................... ......................................$ 1 ,600.00
BusShelter.......:.........................................................$ 6,000.00
Cash deposit for future undergrounding....................$ 500.00
8 additional box trees.... .........................................$ 2,000.00
Post completion Traffic Study... .............. ....... .$ 10,000.00
Sub Total.....................................................................$ 123,750.00
. G70 MQ11Pl'n 571Y4'r
,trim bus phis/in.Uikfhrubi 9..3401
Total City related costs, to date:.............................................$ 162,688.00
Possible Improvements City holding Bond for 5 years:
Signalization of intersection Hwy 1,
New left turn lane - Hwy 1..................................$ 50,000.00
This amounted to a 27% increase in the cost of the project, which far exceeds any
contingency. There is also still the. opportunity for the City to spend another
$50,000.00 on signalization if they decide it is necessary in the next five years.
It was very unusual that a project such as this one was built. If not for the family owned
property being free and clear of any mortages, and the desire to provide a long term
investment in the community, it would have never been completed.
The other area of added costs, which are not in.-luded in the above, are the additional
architectural, engineering, traffic study, planning consultant, and legal fees that
amounted to well over $100,000.00 extra required to obtain all of the approvals.
To consider adding traffic impact fees to the fees already in place is' just one more
barrier to business trying to survive in this community. Building has already virtually
stopped and adding additional fees will almost certainly make it non-existent.
If yWPults,
r information, please give me a call.
Si
San Luis Obispo
Property Owners Association
P.O.Box 12924
San Luis Obispo,CA 93406
23 April 1993
Honorable Council Members Hand Delivered
City of San Luis Obispo
Post Office Box 810
San Luis Obispo, CA 93403
Honorable Council Members,
As you know, the San Luis Obispo Property Owners Association is a member of the
Business Coalition that was formed to educate and encourage local government to
respond to the economic crisis before us. We helped coordinate the Economic
Stabilization Workshop as the initial public forum to present our individual and
collective viewpoints to the City Council and newly appointed members of the
Economic Task Force. We left the workshop with a renewed optimism that our
local government officials were willing to listen, but more importantly, that a level
of insight was reached regarding the dynamics of the economic situation in San Luis
Obispo.
It is therefore with great disappointment that we now review the staff report and the
Draft Ordinance Implementing Transportation Impact Fees For All New
Development Within The City of San Luis Obispo.
We believe, that in consideration of the extended economic downturn, the
implementation of additional fees on development, at this time, would be the kiss
of death for job growth and stability in this City. This type of development fee
would be a "progressive/regressive" fee. A builder or developer must have an
incentive (eg., profit, business expansion, or etc.) in order to undertake a
development. As the city fees mount, this incentive dwindles until the project is no
longer feasible.
It appears that the City maintains the theory that if there is a projected shortfall, that
it is time to raise development fees to balance the budget. The problem with this
thinking is that there may be no future projects to collect fees from because the
economics are no longer there to support a development. In fact, the budgets for the
"wish list" of traffic projects may never be reached because there are not enough
potential developments to fund these public-benefit projects.
Land values in the service commercial sector have already declined 30%± during
the current downturn. An additional fee of $2.34 per square foot would likely have
San Luis Obispo
Property Owners Association
P.O.Box 12924
San Luis Obispo,CA 93406
23 April 1993
Transportation Impact Fees
Page 2 of 2
a further eroding affect on land values. Other categories of land would be adversely
affected, depending upon the development fee. A better approach would be to
require traffic improvements, made necessary as a direct result of a particular
project, the responsibility of that project. This establishes the required legal nexus
and, has proven effective over time.
We strongly advise that you rethink the impacts of these proposed fees. This does
not at all appear to be the time to implement additional fees. A look at other cities
throughout California reveals that there is a definite shift to providing business
with incentives, as opposed to imposing disincentives like the proposed
transportation impact fees. We are including a recent article from California
Business Magazine that rates cities based upon specific criteria. Needless to say, our
interest in sharing this with you is to emphasize that the City of San Luis Obispo,
although a special place to us all, must be, at a minimum, proactive in it's attempts
to retain business and yes, even encourage new business.
Please consider your actions carefully. At this juncture, it may be more appropriate
to defer any immediate decision regarding the proposed ordinance to allow for more
critical analysis and public input.
Thank you for your consideration in this matter.
Respectfully submitted,
ForSence OBISPO PROPERTY OWNERS ASSOCIATIONCM.
President
Enclosure-"The 55 Best Places To Do Business in California"
cc: SLOPOA Board of Directors
William Statler, Finance Dept.
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TO DO BUSINESS .IN CALIFORNIA °
To pa ,a p a,: n - S
r e,ma k alio ut
or e co �� la ��f � t.. �
calif ovpia '.s business. c irn,afe'5
brit Bio�oii e clues a j; l�=. -1 r� 0
IlL
s.
1.10spita
Has l:)ecOme.;: loot l sz}e`
. le s� .`csoi800 ( ae ;0 � ii
clsaea �ecl In the -eee5sf.���
By De` h -orah ,Hallberg
[alili\naia 6n+inrsv.23
` eicr Ucberroth, chairman of \ot eyercone agrees, however. That
the state Council on 'ilbrnia's economic noes are dile to =
Competitn•enesS, last year —nl business weather blown in bN goer
described California-s public ern.ment. Stephen Levy and Robert
policies, talcs, regulation. -Vnold, economists with the Center for
and ,corkers- compensation Continuing Study for the California
_ costs as a "job-killing Economy, challenged Ueberrolh at the
'FX machine." More recently. L.A. summit. They blamed the national
�. state leaders debated their recession, defense cuts, and the real
concerns and remedies at the estate slump—not mass business migra-
s..
February.California Eco- tion—for the state's ills, and predicted
nomic Summit in Los that California will outpace the nation in
Angeles,which spawned several bills now economic growth once the recovery
before the Legislature to ease regulations picks up speed.
and reform iworkers' compensation. "No one has been able to produce a
Governor Pete \%ilson, meanwhile, inau- list of companies that have left
gutated his Team California program to California for business climate reasons
,work on business retention. that would account for as much as 5
�THE
HUNTINGTON BEACH SAN JOSE
County:Orange Count):Santa Clara
Population 185.000 Population:803,000
lift 112111111111 Largest Employers: McDonnell Douglas: Largest Employers:Lockheed Missiles; Hewlett-
City of Huntington Beach: Golden West College Packard; IBM
Business License Tax:A:$997; B:5267; C: S93 Business Lkense Tal A: $7.926; B: $1.356; C:
Office Lease Rates: SO.85-1.75 Median House $186 Office Lease Rates $1.25-2.00 Median
Price: 5271.000 Crime: 1 Education: 54.657 House Price:$225,000 Crime:3 Education:
15 BEST Transportation Y.wy,Pacfc Coast Highway.405: 54.846 Transportation: hFAy. 1.280, 101. 680.
Air:Orange County Airport: Rail: Southern 880. 17: Air:San Jose International: Rail.,
Pacific; Port:Lang Beach, Los Angeles.Special Southern Pacific Port Oakland Por San Francisco
BIG Incenti.es: City officials meet with businesses Por special Inow&=The city has an Enterprise
personally to explain city regulations and per. Zone covering 1.5 square miles,and an Industrial
nits, and the city provides free seminars and Incentive Zone wf,ere companies are eligible for a
Cn"n-one counseling through the Huntington waiver from construction taxes.There's also a
Beach Small Business Administration. Development Enhancement Fund pnwdmg;owisto
Contact Barbara A. Kaiser,Director of Ecbnom;c tysinesses that create new jobs or generate large
DevelopmenL 714.536.5582. revenues. Contact Pauline Millard, Associate
CITIES Director of Economic Development.408.291.5265.
SMART COMMUNITIES DON 'T SIT hAC:h ;
FRESNO SACRAMENTO
ousiness:epor_ on ?:n.� County.Fresno CouW.Sacramento
Ca:Ho r r.i n'S Population:382.400 Population:385.100
Largest Employer=Zacky Farms; Vendo Co.; Largest Employers: State of California:
'eactir.geitles Champion Parts Rebuilders - Mc:CWlanAir Force Base; U.C.Davis i
are working to Bnestness UeemeTac/i$132,28: B:$17,592: Business license Tarc A. $5.000. B: $3.996. C:
.C'-lia8'Office Lease Rates 50.75165 Meduni 575-30D(depending on yrs of certification) Office
r:uitd a Sa:nnY House'Prieec 585,OOO.Crime: 14'Edueatlou: Lease Rates: 51.45-2.30 Merran House Price:
business :i;tt: :C. $3.97.4 Trar4ortafione Hwy.,S.H.5; Air.Fresno 5122,000 Crime: 12-Education: $4,192
-Air Terminal; Rail.Santa fes; Southern Pacific Transportation. Hwy:1-5. I.80: Air. Sacramento
Spada!facmtire=Fresno has an Enterprise Zone Airport: Rail:Union Pacific. Southern Pacific.
as well as training programs that allow comps Santa Fe: Port:Sacramento Port. Special
nies to receive tax credits and cash frau hiring Inanthes:An Enterprise Zone, a Foreign Trade
additional employees. Contact.•Jahn Quiring, Zone, and a Recycling Market Development
President.Fresno Economic Development, 209- Zone.The city also offers financial aid options for
2n2564. businesses relocating in_Sacramento, and will
put large businesses on the -fast track- permit
processing system. Contact: Tim Johnson,
Economic Development Manager,916.264.722.
percent of recent job losses,_iaid That isn't the case, of course. -I,...- new businesses, as well as keep existing
Arnold. "You simply can't find data to business climate isn't the same all over businesses happy, if they want to main-
subslantiate:in exodus." the state.anymore than San Diego and lain a healthy tax base and strong cont-
It s also hard to find California com- Mendocino have the same annual munity. With the competition keener
paries that have nished to mote here rainfall. Rather than a single business than ever before, it's hard to find a city
or expand here. either. But no mailer climate.California can boast dozens of without a businesscommunity develop-
whose side in the debate lou take, one -micro" business climates, eager for a stent program.
Point should not be overlooked: piece of the relocation pie, hoping to \lids this in mind, we set out to dis-
California's great economic ditersiry— tap the natural movement of compa- cover what California's cities are doing
a diversity evident in its more than •I50 hies within a dynamic economy. to attract and retain business. The
cities and towns. Most communities work hard to pro- result was -55 Best Places," a special
To hear people talk about the state's mote their image as a good place to do California Business report on the state's
business climate,vou'd think California business. They know that, lith tae dol- leading business environments.
was one vast, uniform marketplace. tars as scarce as they are in California, To compile the report,we selected 55
stretched from Oregon to Mexico like a smart communities don't sit back and cities in the state with populations
piece of parched leather,with the same v3wn when new businesses show up at greater than 90,000. The list ranged
costs and benefits felt by even-business the door. They jump to attention. City fi'ont Los Angeles, with 3.5 million resi-
within its borders. leaders know they must actively court dents. to Richmond, with 92,600. Our
SAN DIEGO GLENDALE ANAHEIM
County:San Diego Courtly.Los Angeles County.Orange
Population:1.149.600 Population:184,400 Population 279,400
Largest Employers Sharp Healthcare: General largest Employers:K.D.S.Markets; Walt Disney Largest Employers: Disneyland: Rockwell
Dynamics Corp.: Scripps Institute of Medicine Imagineering; Singer Librascope International Corp.;American Drug Stores
and Science Business License Tas None Office Lease Rates: Business License Tax:A: $4,774: B: 5974: C:
Business License Tax:A 52,358; B: S533; C: S2.10-2.50 Median House Price:5283.000 $1.244 Office1ease Rates S2.43(avg.) Median
5208 Office Lease Rates 51.56-1.94 Median Cem,c 2 Education $3.879 Transportation:Hwy. House Price: $199.000 Crime: 4 Education:
House Price: $179,000 Crime: 7 Education: 15. 1 210, S.H. 2, 134; A6:Burbank/Glendale/ 53.890 Transpartrtioi:Hwy.1.5, 1 S.R.57,22;
54.547 Transportation Hwy. I.5. I$. 415: Air. Pasadena Airport; Port: Los Angeles Port Air John Wayne Special I icearn—In partnership
San Diego International; Rail:Atcheson, Special Incentives The Business Assistance with the city's utilities departments.Community
Topeka. & Santa Fe: Port:Part of San Diego. O55eer will act as an advocate of new businesses Development was able to entice four major
• Special Incentives San Diego has an Enterprise at Glendale City Hall, and assist with the city's employers to stay in Anaheim in 1992 by offer.
Zone. Contact Cydia Moreno. Enterprise Zone permitting process. Contact Mike Wiederkehr, - ing rent subsidies. utilities and property tax
Administrator.619.2365005. 3usiness Associate Officer,818548.3155. rebates,low-interest loans,and job training pro-
grams. Contact: Elisa Stipkovich, Community
Development Executive Director, 714-533-
8750.
1
AND Y1"VN WHE\ \EW BUSI\E- SSES SHOW UP AT THE DOOR...
RIVERSIDE LONG BEACH STOCKTON
County.Riverside County.Los Angeles County.San Joaquin
Poputaliac 238,100 Poputst;wc 442,100 Population:221.600
Largest Employers Rohr Industries; Fleetwood Largest Employers; McDonnell Douglas; Long Largest Employers-. St. Joseph's Healthcare;
Enterprises; Thq Press Enterprise Beach Unified School District: City of Long American Savings Hank Del Monte
Business Liana Tess A$3,23% B:$1.343: C: Beach Business License Tax:A:$12.500; B.$9.000; C:
51134-Office lease Rdss 53.45-175 Mean Business License Tan A: $2.632: B: $624; C: $2.000 Office Lam Rake SL55-185 Median
11I Horse Price: E137,000 Crime 8 Edacafion: 5377 Office Lease Rates $1.50-2.15 Median House Price: $107,000 Crime:13 Education:
53,857,Trampostatiore Fhoc US..91.60.1.215. House Price $192.000 Crime. 9 Education: 54,630 Tra spoAation Hwy:1-5.S.R.99,M,I.
1-10;'Alr Ontario Intemationah. Rail?Union 54.082 Transportation:Hwy.S.R.710.405,91. 580: Air. Stockton Metro Airport; Rail:Union
Pantific, Santa Fe, Southern Pacific. Special '605; Air Long Beach Airport,LAX:-Port:Long Pacific, Missouri Pacific. SouthePacific.
Incentives The Redevelopment Agency has pro- Beach Port. Special Inmrtire= Long Beach has Special Incentives Stockton has an Enterprise
8'aYIS to give financial. planning.and aonstruo- an Enterprise Zone. Contact: Jerry Miller, Zone. Contact San Joaquin Partnership; 209.
tion assistance in seven redevelopment areas. Business Development Center Manager, 310• 956.3380.
Riverside also has an Enterprise Zone. 570.3822.
Contact: Robert C. Wales, Assistant City
Manager-Developnient,909.782.555&
i
25
t
idea was not so mu,It to c\chtde
anallcr cities as ah It,ctis un Ih„se 111:11 SANTA ANA BAKERSFIELD
ax»pelc must tiaoroush li,r businesses.
1}'e derided the list coca ncu tate- County:Orange — - County:Kern
Population:304.900 Population:168.300
Buries: the 15 largest cities and-10 ItcSl largest Employers: Cherry-Textron; ITT Canon: Largest Employers: Mercy Hospital: Shell
largest cities. Clearly'. bis; cities have Microseme Corp. Exploration&Production: Chevron USA:'
bid city' problems and big-Gilt costs. Business License Tax: k $6,732; B: $2,167; C: Business License Tac A: 53,650: B: 51.650: C:
which are t�' ic111v ma'e,ehallen in,, 51,169 Office tease Rates 11.65 Median House 5650 Office Lease Rates: $1.30-1.60 Median
p Price: $226,000 Crime: 5 Education: 53,846 House Price: 590,000 Crime: 6 Education:
than mid-sized cities. To luinp the aco Traltsportationc Hwy:1-5; Air.John Wayne; Port 53,605 Transportation:Hwf,1-5,S.H.99.58 Air
together we felt would have given the Long Beach. Special kicentirrs Santa Ana has an Meadows Feld Airport Rail:Santa Fe. Southern
latter group a decided edge. Enterprise Zone as well as SBA loans, lowimer- Pacific. Special Incentives Bakersfield has an
To compile our (11711 listing. tee
est financing, a rebate program for exterior Incentive Area, which provides businesses with
: . improvements, site selection services, foreign state income tax credits. Team Bakersfield, a
ranked cities l%ithin each group by five trade zone,'a local Private Industry Council that group of economic development officials, was
. cntcill in"tires-business license t4C: provides job training placement and assistance, specifically created by the city to attract and
office space lease rates, median home and mortgage assistance. Contact: Sandi work with relocating businesses. Contact Jake
price..crime rate.-and cult of edt:ca
GoWieb,Economic Development Specialist 714 Wager, Economic Development Director, 805
647-6987. 326-3765.
tion—then averaged these together.
The result: Huntington Brach in
Orange County
einer-rd as best bit., city
for business. while
Lancaster in I_r,s " LOS ANGELES
Atr,cdes County - as _ = c i�it County:Los Angeles
l'allL -d best slid-sized
Population:3.579,600
�"r`•`?c -% .Largest Employers: Occidental Petroleum;
city. Both have lute bttsi- �.•r -:_:�, �
mess tas'rs—althou�b. _ AtlantieRichfield: Unocal Corp.
Business L,eense Tac Il•563,425: B:S7.955: C:
intrrestiitgh enough: ^ _ ��'. . -@ :' 56,353 '(see footnote P-52) Officel.easeRates
not the lotcest. i-ryvo` -:�: ���,w�� r`•''r _ `s- 52-52.30 MedunHouse Pricc5201,000 Crime
- - - - '
-• cities—4th-r;t n k c d - '- .' 11 Education: $4,789 Transportation: Hwy:I. .
Glclidale-ili the I„p la ';, - 110,710,405: Ar,LAX Rail Soul, Pacife,
-a..
and 2nd-linked Sunnv- " �•-� Union Pacific; Port:Los Angeles. Special
Incentirs A Small Business Fund provides gap
talc in the nlirlr•tlt. financing, Common Bond provides tax-exempt
cities—have nn business financing for mr:anercial and indusrial.projects; -
s
tags :u there are five.Enterprise Zones, a Revitalization
111.) \Ln'c.,t'er. _ '_ c ,�s
Huntington Beach has ■ Zone t6 rebuild areas destroyed by the riot.train-
ing programs,and a Business Assis ince Cerner.
the lowest creno rate ill
ContContactReynold Blight Community Development
its group.and l.:ut<aulvr Department.213.4852956.
is ranked loth in crime
in its cateaUry. 131)111 The Pierside Pavilion at top-ranked Huntington Beach: tow taxes and low crime.
hate lm%v office lease
rates and spend healthy amounts ,m
edtication: Only Huntin"unl Beach OAKLAND SAN FRANCISCO
ralk short in one measure—hills ill
costs. Its median price taly of'S2il.onu Cotmly:Alameda Courrty:.San.Frandsco
Populatioro 377,900 Population 728,700
made it second-highest in its group. Largest Employer=Safeway Stores Inc,. Kaiser Largest.Employers:Chevron Corp.; BankAmerica
In ;encral, this p:nlrrn—lot.• busi- Permanente: American President Cos. Corp.; Pacific Telesis
[less tags, tut: crime talcs. Intl tial BusinesaI Ta=A:560,000; B:512,000; C. Business LiegseTax:A:$150.000: B: 530.000;
estate prices, and high rsprnrlitufrs $3,600 Office Lease Rates $1.60-2.35 Median C: $3,000 Office Lease Rates: $1.65-2.00
House Price: $191,000 Crime: 15 Education: Median Nouse Price: $265,000 Crime: 10
on education—dietaltd yyhielt cities
$4,563 Transportation: Hwy.M. 1.580;1980,F Education: 54,362 Transportation: Hwy: U.S.
ranked at the top of their calt-gories. 880.S.R. 24: Air.Oakland International: Rail., 101. 1-80, 1.280: Air:SFO: Rail: Santa Fe.
Cotitclxch'• cities"'t:ith the oppt,=i;t. Southern Pacific. Union Pacific.Santa Fe: Pore Southern Pacific: Port:San Francisco. Special
,.,tiern'=hili bit iitra fries. hi-,h Oakland. Special hrarrtiKsSmall-business inar Inan6vis:San Francisco has anEnterprise Zone.
V .1- - - bator,HUD loan program:financial,technical,and. The city also works with companies on a case-by
rtimr r:uos. hi,h eal vmalt- ,rice>. .lrsrl;
she-location assistance for Coliseum Commerce case basis to help them locate development
less <pendin•, fill.rrluc:set i, ,rrrl Center,Commercial Rehabilitation.Loan Program: sites and speed up the permit process..
near'ilh• hxgtt,tll. Aiti•ail hi- ,itir-.. \u, and Revolving Loan Fund: Contact: Leonard ' Contact: Ron Blatman, Dlrecior of Business
hrunrisru r:n,ted la r. v.hili Brr�. it - Green, Public Information Officer, Office of Development.415,554-6478.
Economic Development and Employment,510• -
:::,. Itnh in lhr ntirhilr t ilii.. L, .` ••:i, 238.3626.
LANCASTER SANTA CLARITA
county.Los Angeles County:Los Angeles
THE Population:104.700 Poputadotc 121,600
Largest Empioyers Edwards Air Force Base; Air Largest Employers: Six Flags Magic Mountain;
Force Plant 42;U.S.Borax&Chemical Co. Henry Mayo Newhall Memorial; Hospital H.R.
40 BEST Business License Tax:A: 5113; 8: $92: C: S51 Textron
Office Lease Rater. $0.75-1.00 Median House Bnriness License Tax: None. Office Lease Ralerc
Rice S118.000 Crime: 10 Education: $4,077 $1.75-1.80 Median House Price: $203,000
Transportation: Hwy.,S.R. 14, 138. 58; Air. Crime 3 Education: S4,282 Transportatiore H.y
Palmdale Regional Airport; Rait Southern Pacific 1,5,S.H. 14:Air. Burbank, LAX; Rail:Southem
Transportation; Port:Los Angeles Port. special Pack; Pari•Port Hueneme. Special Incerttirs
MIDNSIZE
hrcertines For the fiscal year of July 1, 1993,to Santa Cla&,a is now assessing its competitive-
Jure 30,1994,there will be a perjob incentive for ness with other business Communities and is
new busmmessesbringing atleast 25employees to developing incentives. Contact: Michael
Lancaster and Palmdale.Companies.corporate or Haviland. Marketing and Economic Development
regional headquarters, and back offices will Manager,805259.2489.
receive 52.000 for each new job. Contact Vem
Lawson, Executive Director of the Economic
CITIFS Development Corporation,1,B0088B•7483.
SUNNYVALE14
;
County:Santa Clara -
Population:120.500 _
Largest Employers: Lockheed: Westinghouse --Y--
r..:r: Sectric.ESL Inc.
- Business License Tax:A._$200; 8: $30: C: $20
•1v_i-di,- -�
_. Office Lease Rates $1.10-1.85 Median House -
Priece: 5278,000 Crime. 4 Edubation: $4,789 ' -
Trusporteimc Hwy. U.S. 101. 1.880,.1-280:Air.
San Jose International, SFO; Port: Port of
Redwood City. Special InceMhee The city aciiveiy
courts businesses with its plan called -The
Sunnyvale Advantage.'which includesextremely
low taxes, a job training program, and a speedy _
permit process. Contact Geri Cross;Economic V ZV'34illl
Development Manager,408.7307607.
of
On the edge of Silicon Valley. 15th-ranked Fremont offers fast-track permit processing.
IRVINE SANTA CLARA FULLERTON
County.Orange Count:Sant Clara
Courtly:Orange
Populatiom 114,300 Population:94,900 Population:117.400
Largest Employers Parker Hannifin; Allergan: Largest Employers:IBM/Rolm Systems Division; Largest Employers Hughes Aircraft: Cal State
Restaurant Enterprises Intel Corp.;Hewlett-Packard University-Fullerton;Saint Jude Hospital
Business Ueaese Tac A:$1_358;B:$263;C$68 Busmrss license Tax:A $500; B: $380:Q $90 Rrress LinxYat Tax:Ak $3,035; B:$1.035:C:
Office Lease Rates:$175-1.90 Median House Office Lease Rates: $1.70-2.05 Median House $430 Office Lease Rates $1.30-3-45 Median
Price:$281,000 Crime:7. Education: $4,066 Rice:$232.000 Gime: 17 Education: $4,305 House Prince: $209,000 Crime:25 Education:
Transporiatiore Hwy. 1.405:Air. John Wayne Trausporla6om Hwy:U.S. 101, 1-280, 1-880:Air. $4,703 Transporhtiom Hwy.F91 t-5, S.H. 57,
Airport. Special hroartires None. Contact Jacquie San Jose International:-Rail.*Southern Pacific. 22;Air.John Wayne Airport,LAX:RarE Santa Fe,
Ellis,Executive Vice President.Irvine Chamber of Special hicendws:The city has fast-track permit. - Union Pacific, Southern Pacific; Port:Los
Commerce,714.5649112 tiring,and assigns a coordinator to assist on cer- Angeles-Long Beach Harbors. Special hromtires:
lain projects throughout the permit process. There are redevelopment incentives mostly for
Contact Ron Garratt. Assistant City Manager. property owners,but larger businesses can usu.
408984.3102. ally negotiate a deal. Contact Gary Chalupsky,
Director of Redevelopment. Economic Develop.
meet.714738-6877.
/z'-* VALLEJO NORWALK _ _ ' " ESCONDIDO
County:Solana 1_;Coardy Cos Angeles > . ti ,, r County:San Diego
n--
Populatiwc 114,800 , � . � Po
pulatio1:LZ900
Largest Employers: Kaiser Permanente; Marine 1% :
Largest Employers: Nordstrom; Schuff Steel
World Africa USA;Crestwood Hospitals N Ward;Sears Outlet ti,. r r da Company,Escondido Times-Advocate
Business License Tas A: $3,162; 8: $1,140, C. ; Bosiii a License Tac_-A. $6 808 B $1408 C Business License Taoc'A: $5,055; B: $1,595; C:
$424 Office Lease Rates: $1.00-1.40" Median '`$197 Office Leese Rates. $0.90-2.50-'Median $245 Office lease Rates: $1.20-1.50-Median
Heusi Price: $152,000 Crime: 34 Education g;H owe Pifeee'.'$159,000 Crimaa2 Edueatton House Price:$168,000 Crime: 33 Education:
$3,975 Transpoifatiue H".:-M,F780,S.R.29,': $4,0?5Trrmyo�abaeH c405;;91 605;,5�Ar 53,964;Tnanspnttatin¢ Hwy. S.H.78, 1-15:Air.
37;Air-Oakland International,SFO:Port Oakland,: -Lon BeaYgh,Joy R Nay Vie,_LAX,Port-:Sen"k?fedro-. Palomar AirportSpedal IncenWez Escondido
Richmond,Sacramento, San Francisco. $peclal cr Long B660Zt Special lnomtivrcThere are no starter x has an Enterprise Zone, ari Office of Permit
Incentives Recently enacted incentives include eiry P..daid incentives but deals can be negotlatedL�. Assistance.that gives guidance and speeds up
r .
contributions towards public infrastructure costs. =rthiO_.Cfly,HalLr_Coataet Dlek Sass'.DecuWe=,:I permit processing, and a-downtown Facade
city contributions to district benefits cost, pubno ; Director.Chamber of Comni,-=,310-864-7785.?fl�-�3 Improvement Program that offers rebates for
private jointvertture partnerships,and sale of land :�? "�� a a ' ,,. xry architectural assistance, signs, and facade-
at below market value. Contact Craig Whittam, improvement construction. Contact: Rolf
Director, Ewnomie Development Division, 707- Gunnarson, Economic Development Director,
644444. _ y`S)f l•4? ,S 1 �,. 1 619-741-4&44..: ••
U,-:EC MONTE'
County.Los Angeles
Populatiar.109,800s ^
Largest Emp*ers:,Marshail.lndustries Welis
Fargo:Crown-City Platingz:%.�-y;�;-_.-.�
BusSiess Lionise Tmc
J ', f J $2,125„offiogleaie Ratr� '5-'
/15 Medtaen .
Horse Pr nee 5159;000.Crimr-15-Educatioa:_
$4,127;-TratispocGtiorc tiivy i60,1.210,SA.10,*-:
Leica Inc.and McEain Aird Monte .P62 I os Angeles- Spe®I
Instruments Join forces Inoerd res None:,Contact,Ellen Dixon, Execurth e
_ \tcBain Imwments of Chatstconh. Director,O,Monte Ctiaiirber of Commerce,818
Califomia has been named exclusive r_•._-':r.
regional dealer in southern California
by Leica inc. - t.
-
L-eica,a worldwide manufacturer
of instruments for vision.measure- -:e:''<'''• `-; -
ment and analysis of microstructures r
cites McBain's 28-year record of - -
_.....-...__, tip..--.-.......�..._�_. -.. _. _ ...
service excellence to the microscopy,
microtomy and scientific instruments
_ industn•.-
The extensive Leica product range
and new products on the horizon z r `;' COSTA MESA
significantly
=z r
fteimn insTnuMIrs
expand McBain's County.Orange
capabilities. Populatiorc.98,500
9601 Variel Avenue %tcBain is now the leading provider IarSest Employers Coast Community College:
Chatsworth,CA 91311-4914 - District Fairview Developrnent Center State
of products and services to the
(8181998-2702 Fatm Insurance-. :• r;;-
Fax 18181 778-0363 scientific-biomedical and industrial - tis Llr Tits A:-5200;B:$_200;C:$200
communities of southern California
_._.Offwe Lease,Rafec$0.95=235- Medica Horse
Pricer$232,000 Crimes,3.7.Fdocation: 54.549
_TraiispalaBae Hwy 1405:SR 55,73;:air John
Lefty Ina Wayne Airport;Port Long Beach Harbor%Port of
117Deerratea0. - LOS Angelesr Special Ineentives: None.
DenLef418mois 60013 �(a -
1=241l-0121 Contact Ed Faawcett, Executive Director of the
Fax(708140-M" Chamber,714-574-8780.
28 April 1993 ,
HAYWARD= - ' '-::P _;' Richard Petrick&Associates,
is an experienced employee bene-
Cq r.Alameda fit planning firm, dedicated to
Pop�taetoncua,2oo t ? $ Providing education and training
La�gesf Einplopers.,Mervyns Corp., Kaser •; to its clients to keep them current
Permanente;Cal State Univers s=' and in compliance with the
KYw:
_Business license,Tare Ac.$133;:B 52698; C=
$1;197 Offiicetease`katies_Ss:35= 5o Medau~ changing employee benefit lens.
:..�.: Call now to attend one of our
House Price:_$179,000.'Crim .28'Eduea6on; free educational seminars.
_$3,915;Trartsportatioix Hwy,F$80;�I-580;-S.H::il
.:•.�;:••h•z:f
..9.1.2.S.
2S.H.-238;Air Oakland Airport�7 miles Rad:
Santa Fe/Southem PacrfiC; Union Pacific Pout.•- ' " '
'+ s Richard Petrick ca•Associates
stiv
tn
ex rienm
Oakland Porti!15 mites.=Spedal,[aceutires:?F'r , , , ,• , • ,, ,
,:� •_..- - +.-„.:-..F,—.___• -.r;t:Win:- €€ 24}QhfomiaStree
Hayward has a loan program Itk small us,ness`, , , t Suite 711
...
ues that create new jobs.iq Ute”eityand oHerss San Ftancism,G1 94111
iricentives'ori:a,caseliycase basis to businesses':,-
.,:re looking t r.�..<:, ,w� Tel 415.249.4600 Fac 415.249.4609
'_that_are;fookirig_to:relocate;tb;thetcitys�
Rede4elopmentrAiea Contact SyMa�(7iremthal;;;l
..
Director of Community&.Economic DeveloprnertL
514298 5345 i` sir '
For more information on products or services
contained in this issue, see
CHULA VISTA
`Copula San Diego
Popplafwn14
ati0
_ icati n
1,800 instant
Largest Employeric Rohr Inc.;American Fashion
Inc.;Price Club on gage 54
Ilusmess License Tea A: $2,912; 8: $540; C:
$117 Office Lease Rates: $1.10-1.50 Median
Rouse Price: $173,000 Crime:32 Education:
$3,661 Transportation Hwy:I-5, 805;Air, San
Diego County International Airport Rad:Santa Fe
and Southern Pacific: Port•National City, San w
Diego. Special Ineertires None. Contact Cheryl ■ ■ ■ ■ _: .
Dye,Economic Development Manager,619691-
5047.
_ 4.r
e_ n
Why Aren't You Here?
BURBANfCs 4s he best corn- successful business. town area. 700,000
s¢ Mrd ' panics have Retailers have con- of the residents in
Comae LosMgeles - XL located their tinually reported this area are between
Poprla6acgg,gp0 syze�c K zz, headquarters in record sales at their the ages of 25-44.
Y ' ''" Glendale for aver Glendale stores, due Providing a larger
_-Largest Eiri;i*ens Warne Bros:/BurbanK=n y g g
_Studio;Waft�ney.Co;'3tiJoeephsM int;f good reason. Withlargely to the ideal profit margin for the
nearly 5 million location. Over 2 mil- retailer, Glendale
'&isfneal3cepso.Taa'A�51711_8: $342;.Cc?3 square feet of prime -lion potential cus- has no business
$135 OffoetraseRafez $120275:GSedian ' office development tomers, with Com- license tax, city
}Ilouie Prlec,$225 OOU Crfuie 8'Edptxtlox
v:•- �, : =a-•.z� and 1 million skilled biped incomes income or gross
$3;8547tamportatioieaHwy workers within a 15 exceeding S32 mil- receipts, tax. With
Burba�rik-Glint" Pnadern-`a�A P__ mile radius,
Angeles ;5ped`al lnomtltee The ei hast Glendale lion annually, reside advantages such as
—' � - +w -�� �. =p ? -offers what you within a 10 mile these, why aren't
PCs":- _Econornie InceMNe 20Ke-p ogramY f
made,up ot.redevelopment agency.inoeritives�� need to operate a radius of the down- you here.
and My lnoerttrues,include tax rebates,krv(ntef�
est::.loans.._anal permit{<fast-traekirig For additional information, contact the
C&rfachRobeertTague;'Corimiiinity:oevelco<rieni=' Glendale Redevelopment
LThdo,�818a53.9774 j • `� =;�?.' } Pment Agency
�enC Y
=a (818)548-2005
_ -'.Tum to page 50 ibTTnrtire s`
(_JiG.rnia Rn.iu.-*c 29
SANTA ROSA RICHMOND
Research lin--55 Best Place:w:ts compiled br --
>IZ Grua t leadingresr:urh and database County.Sonoma County:Contra Costa
p' ' Population:120,200 Population 92,600
a,ntpany affili:rcd yith GJifamin Business mag- Largest Employers: Hewlett-Packard; Optical Largest Employers: Chevron USA; Chevron
azine. To qualify, cities had to have at least Coating Labs;Sola Optical- Research&Technology;Safeway Stores Inc.
5111.000 in popuLuion. based on official esti- Busyness License Tax:A: $17,016;B:$3,416;C: Business Lapse Tax:A: $12,460; 8: $2.240; C:
mates from the California Department of $1,638 Office Lease Rates $1.00-1.40 Median $420 Office Lease Rates: $1.55-1.65 Median
Finance.Demographic Research Unit. Price: $182,000 Crime: 16 Education: House Price: $141,000 Crime. 39 Education:
- $3,937 Transportation: Hwy. 101,S.H. 12 Air. $3,885 Transportation Hwy.m,1-580,101;Air.
Largest Employers are generalh' non�o%- Sonoma County Airport has commuter flights to Oakland International Rail: Southern Pacific.
SFO; Rail:Northwestern Pacific; Port Petaluma Santa Fe; Port: Richmond. special incentives:
ernment employers. and eNclude cin' and River. Special lncerttives:The city offers no set Richmond has an Enterprise Zone, as well as
county'administration,and school stems. incentives, but.large businesses interested in location assistance, fast-track permitting, and
relocating can usually negotiate a deal. funds for infrastructure improvements through the
Business License Tax information yoas pro-.. Contact: Alan Helfen, Chamber Economic redevelopment process in nine areas. The local
sided be each cin. and calculated for three Development Director,707-5451414. Private Industry Council offers skills training pro-
hypothetical businesses: (A) a mature hi-h- grams as well as an employable work force refer-
technology manufacturing company\\ith S50 ral system. Contact: Barbara Otiefe, Office
million in-mss annual receipts and a pa%Toll of Manager,Chamber of Commerce,5104343512.
S90'ntillion:(B)a retail operudon with S10 mil-
lion in dross receipt and it pa\Tull of S3 mil-
lion:and (C)a small accountin-office uith Sl
million in -runs receipts.5450.000 in Pa\Tull.
and 10 rmplo%c•ez(right professionals and two DALY CITY SAN BERNARDINO
support gedl). Tlix rates luted here are not Courtly:San Mateo County.San Bernardino
mann to h- rcpresrnt:tticc of all indrsrT. but Population:96.700 Population:175.800 -
tu apply only to rheic hypothetical Company- Largest Employers: Seton Medical Center; Cow Largest Employers:Norton Air Force Base;Stater
pn,filrs.de\ised solely for the purport c•of pro- Palace:Mary's Bros.Markets;San Bernadine Medical Center
% Business license Tax:A: $25,401;8: $5,401;C: Business License Tax A. $12,500;B: $7,548;C:
idin-a nu•:ms of compar son.Rcadcrsane rw 6750 Office Lease Rates: $1.45-1.60 Median $2,537 Office(Ease Rates:$1.25-1.65 Median
done•d that actual taxes mar\.uv according nr House Price: $241.000 Crime: 6 Education: House Price: $99,000 Crime: 38 Education:
cnnlp:mr size.revenue st'rcnne.indusin'npc. $4,977 Transportation Hwy:F280,S.R.35,Hwy $4,073 Transportatiote Hwy.1.10, 1.15, 1.215;Air.
etc. Readers are m;,ed set call ail%LIN depart- 82; Air: San Francisco International; Rail: Ontario International; Rail:Santa Fe, Union
nivntsorcconomic dc-\rlop,ncnt departments Southern Pacific; Port: San Francisco Port. Pacific.Special Incentives:The city Will develop cus-
fur complete tax inGn,n:pion.
Special Incenttivez The city sponsors six free work- tom incentives for larger businesses. Recently,
- shops a year on business strategies and fnan- Inland Beverage do.considered leaving the area
Los Angeles business tax li,�orrc+shown cial advice from consultants and representatives for a larger facility-San Bernardino purchased the
of government agencies. The Small Business existing building and provided a iow4nterest loan
hen apple onlc to businesses that opt•n:nr cont- Center offers free counseling and technical so Inland could buy a new building in the city.
plc-tely y\ithin city honmdarics. assistance to small businesses.Contact Daniel Contact.Susan Morales,Assistant to the Agency
Office space Lyase Rates were pruyidctl b`.
Schorr, Economic Development Coordinator, Administrator for the City of San Bernardino
415.991.6034. Economic Development• P Agency,9033845302.
cin'economic development departments.
chambers of commerce.and local read vsrnr
brokers. Prices per square rout :ire for Class A
office space-calculatcd un :t monthly basis-
(cities with no,Clsss A office space supplied iNGLEWOOD BERKELEY
figures for -B+-office space). -Actual prices -
in the marketplace may yarv-. County:Los Angeles County:Alameda
Pepula ilm,112,500 Population:104,200
Median House Prices wrre provided by Largest Employers: TRW Systems; Northrop. Largest Employers:Alta Bates, Herrick Hospital,
Dataquick Inc. a nal estate research (lent Corp.:Rockwell International. Miles/Cutter Biological;Kaiser Permanente
Brsitness LicenseTax:A$55,000;B:$10,802;C::.= Business License Ta_x:A: $60,000(value added);
based in La Jolla. Figures here :Ore median $1,630 Office_Uase Rates$LOO-1.25 Median- : B- $12,000; C: $3,600 ice Lease Rates:
prices as of flu•fourth quarter use
er of 1992. HoPriee:$169,000 Crime:36 Educationr $1.50-2.00 Median House Price: $209,000
$3,809 Transportation:Hwy.,1.405;Air Los Crime: 40 Education: $5,859 Transportation:
Crime rmking is based on FBI (i-arcs for Angeles Airport;Rail:Santa Fe;Port Port of Los Hwy.ISO,1.580,S.R.13, 123,24;Air.Oakland
1991 for number of crimes per 1,000 pop- Angeles. special incentives The city will assist International, SFO; Port: Oakland. special
td:rtion. businesses likely to generate high sales-tax rem Incentives: Low-interest loans are available to
enues for the city(for example,a car dealership) businesses that relocate in South Berkeley.The
Education information\sa proiided b%the by using the power of eminent domain to acquire. city shares a Recycling Market Zone with
C:difornia Dep:nvmcnt of Education,sch<u,l land parcels for them. Contairb Jesse Lewis, Oakland,offering various Incentives to business-
Business Services Division, for 1991.92 f,sf':d Redevelopment Director,310412.5290. es that use recycled materials. Contact Will
Lambert, Business Development Coordinator,
year, hist-d on cost per merage daily:ncn- 510•G44.6309.
dance:in a fc•\c cases.the average for st•%vnd
K ho.d.srstrnx within one cit%was owd.
' 1
z ) .:.-OCEANSIDE - WEST COVINA SIM11 VALLEY
`:Coiiiry San Diego `` County:los Angeles County:Ventura
Popufatimc 138,500'_ 'c; `:' =;'`L'_ Population:97,300 Population:101,800
Lftest Employers:Tri-City Medical Center Astec;;: Largest Employers Queen of the Valley Hospital; Largest Employers: Farmers Insurance Group;
America:Deutsch Co ' San Gabriel Daily Tribune; Broadway DepartSimi Valley Hospital and Health Care; First
&est L3oense Tate A $25,075;B:$5,075;C:_-'-,* merit Store Interstate Bancard
$575',QLfiee_Lea"Rates: $0.75-1.35 Median rt. Business License Tax:A: $5,430; B: $1,133; C: Business Lkertse Tax A.$19,152;8: $4,152;C:.
House Price:.$157,000 Ctime:.18 Educations; $279. Office Lease Rates: $1.10-2.15 Median .:$777. Office Lease Rates: $1.35-1.70 Median
$3,670,.Transportatinie_Hwy 15, S.H: 76; .q
7 "-T House Price: $187,000 Crime: 26 Education: ::`.House Price: $193,000 Crime: 2 Education:.
John Wayne-Airport Rail:Santa re;Port San?; $3,749 Transportation: Hwy FSO, S.H. 39 Air $3,899 Transportatwn Hwy. S.H. 118 Air. LAX;
Cadact Elizabeth Graff, Development Services : Ontario Airport, LAX; PortLong Beach. Specht ;' Rail., Southern Pacific; Port.-Port Huerieme.
Coordin6199664702 incentives:The Redevelopment Agency offers low Special Incentives The city prciv des a negotiated
ator,
interest Loans to help with building improvements. percentage of taxes for assistance for certain
_~ Contact: Kristin Howland, Director of Public needs, assembles project teams to assist app 11-
Z-1
Relations&Membership,818.3385496. cants, a_program designed to reduce paperwork,
sewer and water hookup deferred payment plans,
_ = and a small Business Assistance Office.
Contact Nancy Bender, Executive Director of the
Chamber,805526.3900.
TORRANCE PASADENA ORANGE
County:los Angeles County:Los Angeles County:Orange
Population:133,900 Poputation 133,500 Population:114,500
Largest Employers: AiResearch; Toyota Motor Largest Employers:Jet Propulsion Laboratory; Larges!Employers: St. Joseph Hospital; UCI
Sales;Hughes Aircraft - California Institute of.Tech.; Huntington Medical Center,Van's Inc.
Business Lfcerae Tax A: $17,738;B:$3,138;C: Memorial iiospit_at_`..:' - - .��; :::':; Business License Tax A: $29,940; B: $6,055;C:
$538 Office Lease Rates$1.40.1.50 Median : :Bnniniaiii cense Tax A. $8,69rr, B:-$1,5.63;,0::,: $540 Office Lease Rates $0.95-1.75 Median
House Price. $273,000 Crime. 13 Education: ,$1,211 OIfi6 Lease Rates$1.00-2.50 Medrari' Nouse Price: $238,000 Crime: 20 Education:
$3,728 Transport& c Hwy. 1110 Air.Torrance House Prfeet.$320,000 Crime: 27J Education:.. $4,020 Trsraporla on:Hwy,S.R.55,57,22 Air.
Municipal Airport. LAX: Rat Sana Fe,Souther 54,314 Transporlatiac Hwy.U.S.134,210,S.H. John Wayne; Port:Long Beach Harbor/Port of
Pacific.Special Incentives None. Contact Albert 110; Air:LAX; Port: Los Angeles. Special Los Angeles. Special Incentiver. Special deals
Ng,Assistant City Manager,310518.5880. Incentjves Pasadena has an Enterprise Zone..' can be worked out.depending on the size of the
Cmdact: Ken Jackson, Enerprise Zone Manager,' business. Contact:V Victoria Cleary. Assistant
818.7.98.675L Project Manager for Economic Development
Department,714.771.2315.
WIM FREE' PRIZES.*
f you have a business,
we have the place. . . " ' " ' ° ' '
For assistance with ,
' t • Site selection • Financing
f f.= • Permits • Demographics
es'
{ Call us! 4
City of Vallejo
Eo
rnomic Development
Delp2r mint C ALC A L I
555 Santa Cl=St.
_•' 'r Vallejo,CA 91590 (707)648-4444
on pa 54
California Bu+inn+° 53
Continued ficin Gage 26 —
cities,companies have long complained FREMONT RANCHO.CUCAMONGA
about high taxes and onerous bureau11-
County:Alameda Courrt>:San Bernardino
cratic rules that contribute to their Population:177.500 Populating110,500. _
cities' generally "inhospitable" business Largest Employers: NUMMI car plant; Fremont Largest Employers: General_Dynamics: Ameron
crush-climates.Indeed,boils cities have Unified Schools;Everex Steel&Wlre/PipeC Fnto• iiy Inc.
ing business taxes.In San Francisco,our Business License Tax: A: 56,030; B: 52,530; C: Business License Tax:k $5_ 9,205; 8: $1,613:C:,
h. othe[icai manufacturer would pa. 51,330 Office Lease Rates S1.20-1.30 Median $413 Office Lias elutes: $1.45-1. 5 Median.,
House Price: $238,000 Crime: 5 Education: HouseVPriee:,$140,000'_Cnme: li_Education::
$130,000 a%ear, $18,000 more than in $4,060 Transportation:Hwy:1-880,680 Air.SFO: $3,759 Traesportattoe: Hwy 1-10, 1-15; Afr:
Fresno and more than double the rate Port:San Francisco. Special Incentives The city Ontario intemaUo fill.RaU:,Sarna Fe; Part Los'
in Los Angeles. Berkeley s tax rates are has a development agreement that eliminates Angeles';.Long Beach:r5pecial incentives: .
many fees in the Ardenwood area, coordinates Incentves,are now beingplann
comparable to big city rales; indeed. ed. Cordae! KeM
project teams for the larger developmenprojecrs. Crowley;Chamber,Economic Redevelopment"
they topped all but those of four cities. and has fast track permit processing. Staff,909.987-1012:
To be sure. like am' ranking, the a-i- Contact Part James,Administrative Analyst,510-
teria for our 55-city list are arguably 4944462.
arbitrate.There are many intangibles of
a given community that cannot be mea-
sured,but that may be extremely impor-
tant to a particular
company residing
there. ambience,
quality of life. natural _ DO W N EY
and cultural County:Los Angeles
resources. and manv Poputation:92.600
other factors can Largest Employers: Rockwell International: L.A.
affect customers, «- _ _ County;Stonewood Shopping Center Mail
Business License Tare A: 58.968: B: 52.558: C:
workers, vendors, 5161 Office Lease Rates: 50.80-1.50 Median
and management, t House Price: 5207.000 Crime: 9 Education:
. $3.578 Transportation: Hwy. I-5. 1-710, 1.605;
and be critical to ver-
' _ t'-'
'�- ['� Air: Long Beach Airport, LAX: Rail: Southern
tain types of business. `�
:^� •` r � Pacific Transportation;Port:Long Beach and L.A.
But we're going for - Harbor.Special Incentives Deals can be negotiat-
_ ed for larger businesses. Recently, the city
batting average here.
.And in that context, agreed to give Penske Toyota 5400.000 toward
the aranhe[ers we improvements and 5100,000 a year for five
p years in return for a commitment from the deal-
chose are critical to -_ -= ership to remain in the city for five years.
the health of local y6 s � Contact Art Rangel, Director of Community and
businesses. another - Economic Developmern,310.904-7285.
set of important fac-
tors not directly mea- A colorful farmers' market at Oceanside: Some things can't be quantified.
sured in our rankings
is a community's package of special _
incentives.Mari are described brieflv in POMONA FONTANA
the listings. County.Los Angeles Couniy:San Bernardino
We should mention that 13 cities on Population:135,500 Population 97,500
our list have Enterprise Zones within Largest Employers: Hughes Aircraft; Pomona Largest.Employem-Kaiser Hospital & Medical.i,
their boundaries. These zones, desi;- valley Hospital; California State Polytechnic Group; California Steel Industries; Southern;
na[ed by the State of California, offer University PacificRarlroads�
Business License Tax: A: $515; B: 52,660: C: Bivaress L6;se Ta:e A.$15,052 B:$2,67'2!;`C-,;.
;ax breaksto businesses Operating11- p J 51.204 Office Lease Rates: $1.10-1.65 Median ;$1.035`ldiis Lease Rates.$0.75.1.20 Madiau`'i:
there, including hiring tax credits, House Price: S132,000 Crime: 29 Education: House,PrIce: $124,000 Crimes 31 Education::.'
sales-tax and use-tax credits for 53.815 Transportation: Hwy.,60, 10: Air Ontario $3,789.Transportation:Hwy:,1-15,.i-10 Air
machinery and equipment purchased International, John Wayne, LAX: Rail:Southern Ontario intemaGcnal: Raiff:Santa As, Southern
Pacific. Union Pacific. Santa Fe: Port: Los Pacific, Union Paeifie Spedal.kmffHres The city
for use in the zone, net operating loss Angeles. Special Incentives: None specified. offers financial Incentives on a case-by-casecarrvovers, and business expense Contact: H. S. 'Biff' Byrum. Chief Executive basis.,Contecb Byron Steinbaugh, Economic
deductions. Most also offer local Officer. Pomona Economic Development Corp.. Development Divisicn,909351}7605. -
Enterprise Zone incentives which mai. 71422-1256.
include low-interest loans, permit first-
tracking,job training, and site sclec-
tion assistance.
50 April 1"3 ..
MODESTO GARDEN GROVE THOUSAND OAKS
County Stanislaus`.. _ _ Count':Orange Courrb:Ventura "
Population 174,200 Population 148,100 — ' Population 106,600.-
Largest Employers Tri.Valiey Giowers; E &J Largest Employers: Garden Grove Medical Largest Empkuyers GTE California; Amgen Inc.;
Gallo WineryGallo Glass Co. Center;Pilkington industries;ALPS Mfg. State Farm Insurance.
Business License Tax:A: $100; B:'$5,200; C:. Business License Tar: A: $2,991; B: $2,229; C: Business License Tax A: $4,670; B: $1,470; C:
$2,200 Office Lease Rams: $1.25-1.65 Medan $1,152 Office Lease Rates: $1.00-1.30 Median $350 Office Lease Rates: $0.90-2.00 Median
House Price:$115,000 Crime:21 Education: House Price: $182,000 Crime: 24 Education: House Price: $348,000 Crime: 1 Education:
$3,937..Trmspmrtatiom Hwy S.R. 99, 108.-and $3,904 Traraportatiorn Hwr..1-5.1-405.1-605;Air. $3,913 Transportatin:oHwy: U.S.101 Air.
132,.ES Alr.-Modesto Ctty6uMy Airport;Rail: John Wayne Airport; Rail. Atcheson, Topeka & Oxnard Airport; Port:Port Hueneme,special
Santa Fe,Southem Pacific, Union Pacific;-Port Santa Fe, Southern Pacific, Union Pacific; Port Incenth The sty offers commercial rehabilita
StorJdnn special 4uceldfret The ci0 grants a omni Long Beach Harbor. Special incentives Job train tion grants to help businesses comply with the
We me tax exemption for labor intensive businesses: . ing programs and relocation assistance and can American Disabilities Act,and sponsors a mentor
Those that employ 15 or more persons per we help large businesses relocate quickly by putting program where business people can get in con,-
get
ornget re mbursed 100 percent for water connection, them on the'fast track permit system,and acting tact with others in their line of work.
lwildmg and plant fees;those that employ seven as a liaison for the business with other govern Contact Stacy Park,City Manager's Office,805-
or more are reimbursed 50 percent for the same mental agencies. Contact: Matthew Fertal, 4968601
fees Contact: Harlon Westenberg, Economic Director of Community Development, 714.741
Development Manager,209577-5473. 5120.
MORENO VALLEY VENTURA CONCORD
Courtly.Riverside Courtly:Ventura County.Contra Costa
Population 131,900- Population 94,300 Population 113,000
Largest Employers: Mervyn's Department Store; Largest Employers: Community Memorial Largest Employers: Bank of America, Chevron
Rohr Industries:Moreno Valley Med Center Hospital: Vons Grocery Co.; Buenaventura USA;Wells Fargo Bank
Business License Tax:A. 524,440; B: $1.830;C -Medical Clinic Business LJeense Tac A $2,015; B: 55,226;C
5214 Office Lease Rates: $1.15-1.55 Median Business License Tax:A: $9,395; B: $895; C: $954 Office Lease Rates: $1.37 Median House
House Price.- $125,000 Crime: 30 Education: $385 Office Lease Rates: $1.20-1.65 Median Pries $178,000 Gime:-19 Education $3,793
53.834 Transportation:Hwy, 1-215, S.R. 60;Air. House Price: $189,000 Crime: 14 Education: Transportation:Hwy. IE80. S. R.242, 24,4 Air.
Ontario Intemational; Rail: Santa Fe, Union $3,432 Transportation: Hwy.U.S. 101, S.H.33, Oakland International,SFO;Port Benicia. special
Pacific, special incentives: Businesses that car 118, 126: Air. Oxnard Airport; Rail:Southern lncentives:,The Department of Economic and
ate 25 jobs in two years can receive a 5 percent Pacific,Port Port of Hueneme. special Incentives Community Development provides site selection
discount on certain city fees; businesses that There is a Small Business Assistance Program, assistance.The Concord Redevelopment Agency
create 50 or more jobs in two years can receive which offers free counseling from business pro- provides public assistance to certain businesses
a 15 percent discount. Contact: Linda Guillis, fessionals. Contact: Miriam.Mack, Rede. in the form of land writedowns or public improve-
Economic/Redevelopment Director, 714.243- velopment Administrator,8056547833. menta. Contact: Bill Reeds, Economic
3460.
Development Director,510871.3355.
SALINAS OXNARD ONTARIO
County:Monterey - CouW.Ventura C;w.San Bernardino
Population 112,900. - Population 146,400 Population 138,800 -
Largest Employers Bud of California; County of Largest Employers:Abex Corp.;Boskovich Farms; Largest Employers: Lockheed; General
Monterey;D'Arrigo Brothers GTE California Inc. Telephone;General Electric
BusSieis Lkxanse Tac,:k$35,010;B:$7,010;C:.:. Business License Tax:A: $2.175: B: $6,123; C: : Buid as IJearte Tai:A: $10,050; B. $2,050;
$420.,0W.4 Lease Rates$1.25 Median Horse',' $1,062 Office Lease Rates: $1.40-1.85 Median $600.Office Lease Reteic $1.35-1.65 Median
Pilce?.$160,000 Crimef 23 Education:` House Price: x5176,000 Crime: 22 Education: House Price:$135.000 Crirrie 35 Education:
53,904 Tranriporfatiorc Hwy.0 S..101 S.R.68.' $4,085 Transportation Hwy. 101, S.H. 1, 34, $3,873 Transpoitallom Hwy 1-10. 1.15, S.R. 60.
383;Air:Salines Municipal Airport; Rail:: 232:Air.Oxnard Airport has service to SFO and 83;Air Ontario International; RaU:Santa Fe,
Southem Pacific:. special Incentives:The city'� LA:L Rail:Southern Pacific; Part Port Hueneme, Southern Pacific,Union Pacific.Special incentives
offers an Industrial Development Bond and tax. Channel Islands Harbor, special Incentives:The There are four redevelopment areas in the city
increment financing..Contact:Jorge Rifa, city has a fast-track permitting process, a task that provide mostly development incentives but
Assistant City Manager,406758.720E". force that reviews new projects and warns of also include a Small Business Assistance Center.
potential problems,and a revolving loan program There Is ta4 increment financing, and the
that provides gap-financing for existing business Industrial Development Authority can issue up to
es. Contact: Steve Kinney, Economic Deve. $10 million in bonds to support jobyroviding pro•
lopment Director,805385-7455. jests: Contact: Korman Priest, Community
&momic Development Director,714.9861151
California lintiru•.� 31
BaraschArchitects
April 6, 1993
Hon. Mayor and Members of the San Luis Obispo City Council
City of San Luis Obispo
990 Palm Street
San Luis Obispo, California 93403
Re: Transportation Development Impact Fees Currently Under Review
Ladies and Gentlemen:
It has recently come to my attention that the City of San Luis Obispo Finance Director's
Office has prepared a detailed summary of the proposed Transportation Development
Impact Fees.
would like to present certain relevant factors which may effect your review and-
consideration of the enactment of any transportation related impact fees in the City of San
Luis Obispo now oris the future. These factors suggest that non-residential construction
does, in fact, pay its own way with respect to development related impact fees.
in a recently published report entitled 'Impact Fees and Commercial Real Estate: Issues
and Consequences"completed at the Harvard University's Taubman Center for State and
Local Government in late 1991, several revealing conclusions were drawn relating to the
rationale and effects of locally imposed development impact fees. Some of the more
significant conclusions of the detailed and lengthy study are summarized In the selected
relevant portions of the report's Executive Summary.
IMPACT FEES AND COMMERCIAL_ REAL ESTATE: ISSUES AND CONSEQUEN
UMMACES
FMECUTIVE SRY PUBLISHED BY THE NATIONAL ASSOCIATION OF INDUSTRIAL
& OFFJCE PARKS - COPYRIGHT 1991
A RATIOi1tALES FOR IMPACT FEES
Local governments often iustify impact fees on the grounds that they more
equitably divide responsibilities for infrastructure expansion between existing and
'incoming resWents. _Impact fees are based on the principle that those who benefit
- from the use of certain public facilities should pay for their construction.. _-"
Page 2
April 6, 1993
Nevertheless, facilities financed by impact fees often benefit an entire community.
Localities rationalize this dichotomy through two arguments. First, due to rapid
growth, the costs to existing residents for the expansion of public facilities
outweigh the benefits they derive from providing that additional infrastructure
capacity. Second, new development is not able to pay for its own infrastructure
needs through traditional financing mechanisms.
LIMITATIONS OF EQUITY RATIONALES FOR IMPACT FEES
1. New development is not necessarily the primary cause of demand for infrastructure
Mansion. Rising per capita incomes lead to increased demand for public
facilities and services in many communities, and therefore are a principal strain on
infrastructure capacity. Moreover, today's stringent environmental standards
mandate that communities invest in certain infrastructure improvements, such as
water and waste treatment plants. The authors of a Harvard University study note
that 'for fast growing communities, only a portion of new demand for new
infrastructure can be attributed to new development." Similarly, a paper by the
Urban Land Institute (ULI) concludes that "even with no new development, traffic
would increase due to the population's growing mobility."
2. Growth often pays for its own infrastructure needs through traditional financing
mechanisms. An empirical study of Naperville, Illinois finds that without impact
fees, taxes collected through traditional mechanisms from "1,000 square feet of
office space.resulted in a small surplus at the municipal level and a large su&plus
at the school (district) level. The author concludes that "if the basis of (impact
fees) is that growth should pay its. own way, then the Naperville cost-revenue
analysis is suggesting that growth, especially non-residential land use, is already
paying its way."
3. Delays in impact fee-financed construction can violate the financing principles
upon which impact fees are based Impact fees are based on the principle that
those who benefit from the provision of certain public facilities should pay for their
construction. However, many local governments delay infrastructure construction
an unreasonably long time after collecting fees, thereby depriving fee payers of
potential benefits. For instance, Douglas Porter, former Director of Development
Policy Research at ULI, finds that because San Diego, California was plagued With
delays in planning, design, and sometimes land acquisition, few [impact fee-
financed]projects are built°
. 1 y
Page 3
April 6, 1993
4. Tenants of new development are often existing residents and thereby pay twice for
the same infrastructure Up to 80% of new homes or businesses are sold to
people who already live in a community. These "new" residents are forced to
finance existing off-site facilities through traditional taxes and user charges, and
are also forced to bear the costs of expanding infrastructure through impact fees. -
5. fm pact fees may reduce willingness for future funding. Local governments cannot
use Impact fees to remedy existing deficiencies in public facilities. When existing
capital facilities need to be replaced, local governments must often seek voter -
approval. Assuming that developers pass a portion of impact fees forward, tenants
might not be willing to replace existing facilities on the grounds that they have
already fulfilled their fair share of the infrastructure burden.
An economic i2ersRective: Fee advocates often assert that impact fees lead to an
efficient allocation of public facilities. As currently administered, however, this is
not the case. In order to lead to an efficient outcome, impact fees must charge for
any costs that new development inflicts upon a community above and beyond a
development's actual construction costs. These include: (1) the costs of
expanding the capacity of off-site infrastructure to meet the demand generated by
new development, and(2) the consequences of congestion-environmental effects
of auto emission, longer commutes, etc.
With regard to the first social cost of development, the costs of providing and
delivering public services'fluctuate by the location of a development. Hence, an
impact fee must also vary by the location of a development in order to engender
an efficient allocation of infrastructure. However, a 1988 survey reveals that only
s% of communities allows impact fees to vary by location.
Growth management rationales: Some observers argue that impact fees enable
a local government to develop or abide by growth management and capital
improvement programs. The logic behind this claim is that impact fees provide a
stream of revenue for local governments with which they can finance the
expansion of capital facilities. . Moreover, because impact fees are standardized
payments applicable to all developers, they ensure that financial responsibility for
the expansion of infrastructure is distributed equitably among new developments.
Page 4
April 61 1993
A highly regarded study on impact fees, however, argues that "among the different
forms of private financing, uncertainty is most likely to be a problem with
development impact fees. First, impact fee receipts depend on levels of
development. Construction is highly sensitive to economic cycles, and thereby
likely to vary widely. Second, the legality of impact fees has not yet been fully
determined.
B. EFFECTS OF IMPACT FEES
The effects of impact fees on communities imposing them is perhaps the least well-
understood aspect of fee debates. A 1990 study by Coopers and Lybrand for the
City of San Diego consistently demonstrates that, over the short term, San Diego's
proposed impact fees have a more detrimental economic effect than an equivalent
property tax increase. in the long terms, the forecasted effects of San Diego's
proposed citywide fees and an equivalent property tax increase closely parallel
each other. The study predicts, however, that San Diego's proposed citywide fee,
when used together with regional impact fees, have greater negative long-term
effects than either a citywide fee or an increase in property taxes equivalent to the
proposed citywide fee (see Appendix B in main text).
1. Effects on business entry and retention: As impact fees lead to rent increases,
many businesses will disperse to outlying areas that do not impose fees in order
to avoid higher costs, especially considering that rent accounts for 10% of office
operation costs nationally. Furthermore, technological advances in
communication reduce the willingness of many firms to pay for agglomeration.
Businesses may choose to expand, enter, or remain in areas that have fees
provided they derive significant benefits from clustering. Businesses that do
locate in these areas must be large enough to bear the additional costs imposed
by impact fees, however.
2. ,effects on economic•growth and productivity: Are local governments capable of
administering impact fees? Due to the use of impact fees in certain communities
over the last several years, debates often de-emphasize their potential economic
effects. Instead, many observers now stress that local governments are not
capable of administering impact fee programs as intended. For example, many
localities experience significant delays in the construction of impact fee-financed..
facilities.
Page 5
April 6, 1993
Construction delays can have significant economic consequences. Manybusiness
cluster in particular areas because of the savings offered by efficient public
facilities. As infrastructure becomes less efficient through deterioration or
crowding, businesses are forced to absorb higher costs. This can lead to a
significant decline in productivity and competitiveness, adversely affecting a
community's economy.
How do local taxes and impact fees affect economic growth? Several "emgirlcal
studies"demonstrate that tax increases can detrimentally affect a local economy.
For Instance, a 1991 study concludes that "an increase in a state's own tax rate
relative to the rates in all others slows the rate of economic growth in 45 of 49
states. Impact fees are not identical to taxes; nonetheless, economists generally
agree that their incidences parallel one another. Moreover, because impact fees
dlstri¢Ute payment responsibilities less equitably than Qroperty taxes In the short
run then can conceivably have mare severe_economic consequences. The
coopers and Lybrand report, for example, predicts that in the short term San
Diego's proposed citywide fees have a more detrimental effect on gross regional
product than an equivalent property tax increase.
3. Effects on emgloyment: The real estate industry provides eight million jobs
nationally and constitutes up to 40% of some areas' local employment bases.
Thus, any decline in building activity can have severe employment consequences.
Theory suggests that construction declines with-the imposition of im acp t feeg, so
localities might g2 ep ctemi2loyment in the real estate industry and services to
decrease.
As construction declines, potential business space also decreases. As a rule of
thumb, developers note that a fully occupied office building employs approximately
one person per 200 square feet of rentable space. Assume that a community
without impact fees expects office space to increase by 500,000 square feet in a
given year. If that community imposes impact fees, and experiences an increase
of only 300,000 square feet of office space, the locality forsakes uu to 1.000
j2otQntial jobs.
Additionally, impact fees can force businesses to locate to areas not imposing fees.
As businesses relocate out of a locality, that area's employment opportunities
decline. Finally, the 1990 Coopers and Lybrand report predicts that San Diego's
proposed citywide fees will lead to a significant decline in San Diego's
employment.
Page 6
April 61 1993
4. Effects on income: If employment and overall productivity decline with impact
fees, one would expect per capita income to decrease as well. Two studies have
demonstrated that this is, in fact, the*case. A 1988 study by John Landis and
colleagues predicts that housing caps in San Diego.are likely to reduce real
gaa!ta income by 2% in 1993. The Coopers and Lybrand report_reaches similar
conclusions.
5. Fiscal effects: Theoretically, impact fees can lead to decreases in a community's
construction, employment, income, and business entry and productivity. As each.
of these factors declines, a community loses potential revenue-generating sources-
For example, if construction slows after the imposition of impact fees, property tax
receipts fall as well.
C. FINANCING ALTERNATIVES
If local governments do riot consider alternate financing mechanismsri0 or to
implementing,impact fees. courts are less likely to validate contested fee progar ms
Impact fees may not be the most appropriate financing mechanism for all public
facilities; traditional financing methods include tax-exempt bonds and general
taxes.
Increasing numbers of local governments are turning to "user charges"to finance
the construction of certain public facilities. User charges are most appropriate
when a community chooses to allocate financial res onsibM for lnfrastructure
upon those who most benefit from its provision or to encourage conservation
Other financing options growing in popularity include 'special assessments"and
°special districts`: 7ax increment financing"is also a viable alternative to impact.
fees, although most states authorize its use for the redevelopment of blighted or
slow-growth areas, rather than general infrastructure needs. Fina& local
governments can ort to "pnlratize certain 12ublic services". Almost 37%of all cities
contracted out a number of services to the private sector between 1990-91.
Page 7
April 6, 1993
In conclusion, transportation generated development impact fees may be more
appropriate for residential related development where major local services are required
for the first 4-5 years before property taxes begin to off-set local municipal services and
infrastructure costs.
Non-residential development including commercial/industrial andretail buildings normally
pays its own way in respect to its fair share of transportation development impact fees
through traditional financing mechanisms including, business related taxes, retail sales
taxes, property taxes, as well as additional local business activity which directly benefits
local governments' financial well being.
More appropriate financing options currently exist which may be more beneficial to the
City of San Luis Obispo in light of the current low level of local real estate and economic
development activity. Some of the more successful alternative financing sources to
assessing and collecting impact fees, which may be more effective for a city the size of
San Luis Obispo (where a majority of general plan has already been developed), include,
the creation of special service districts, tax increment financing, "special" assessments
based on localized requirements and the "privatization° of certain traffic related services
and improvements.
Please contact me directly should you have any questions or comments regarding this
analysis of the proposed San Luis Obispo Traffic Development Impact Fees, or the entire
report summarized herein, which contains the statistical data supporting our conclusions
and recommendations on this issue.
Respectfully yours,
Stephen B. Barasch, AIA, APA, Chairman
Commercial/Industrial Committee
Building Industry Association of the,Central Coast
and San Luis Obispo City Resident
SBB/ebm
1
Page 8
April. 6, 1993
Executive Summary Notes
1. Snyder and Stegman, "Paying for Growth", Chapter 4
2. Alan Altshuler, Jose Gomez-Ibanez, and Arnold Howitt, "Paying for Growth; A
Private Obligation?" "Land Lines: Lincoln Institute of Land Policy", February 1991,
PP. 1-2.
3. Isaac A. Megbolugbe, "Builders' Perspective on Infrastructure Financing"
(Washington,D.C.;National Association of Nome Builders,Research Report Series,
1989), P. 10.
4. Altshuler, et al., "Paying for Growth; A Private Obligation?'
5. "Myths and Facts about Transportation and Growth" Urban Land Institute,
Washington, D.C., 1989.
6. David Listokin, "Impact Fees: A Fair Share Framework, "Financing Growth; Who
Benefits: Who Pays? And How Much?" Susan G. Robinson, ed. (Washington,
D.C.; Government finance Research Center of the Government Finance Officers
Association, 1990), p. 131.
7. Ibid. Emphasis this author's.
8. Douglas Porter, "San Diego's Brand of Growth Management; A for Effort, C for
Accomplishment". Urban Land, May 89, p. 26.
9. Cited in Snyder and Stegman, "Paying for Growth". p. 97. According to ULI's
"Myths and Facts About Transportation and Growth, 41-60% of new homes are
sold to people who already live in a community.
10. Snyder and Stegman, "Paying for Growth; p. 28
11. Paul B. Downing and Thomas S. McCaleb, "The Economics of Development
Exaction", Development Exactions, James E. Frank and Robert M. Rhodes, eds.
(Washington, O.C.;American Planning Association, 1987) p. 46.
12. Frank and Downing, "Patterns of Impact Fee Use; p. 19.
13. Snyder and Stegman, "Paying for Growth". p.33.
14. Ibid.
15. Ibid.
16. Ibid.
17. Coopers and Lybrand, "Economic Impact of Proposed City-Wide Impact Fees for
the City of San Diego". July 16, 1990.
18. David E. Dowall, "Endangered Species: San Francisco's Back-Office Employees,
Urban Land, August 1986, p. 10.
19. Forrest E. Huffman,Arthur C. Nelson,Marc T. Smith and Michael A. Stegman, Who
Bears the Burden of Development impact Fees?"Development Impact Fees,Arthur
C. Nelson, ed, p. 319.
Page 9
April 6, 1993
20. Ibid
21. Porter, "San Diego's Brand of Growth Management: A for Effort, C for
Accomplishment, p. 26, and Charles J. Delaney and Marc T. Smith, "Impact Fees
and the Price of New Housing., An Empirical Study; AREUEA Journal, Vol. 17, No
11 1989, p-52.
22. Paul Danish, "Infrastructure: Corporation; Communities Are Splitting the Bill",
Expansion Management, November/December 1990, p. 9.
23. Gerald W. Scully, "How State and Local Taxes Affect Economic Growth". National
Center for Policy Analysis, Policy Report No. 106, 1991. On pp. 3-4, Sully cites the
following studies: Robert J. Genetski, "The Impact of State and Local Taxes on
Economic Growth, 1963-1980", Jarris Bank, Chicago, IL< 1982; Victor A. Canto;-
'The State Competitive Environment; 1987-88; An Update, A.B. Laffer Associates,
1988; and, Michael Wasy/enko and Therese McGuire, "Jobs and Taxes: The Effect
of Business Climate on States' Employment Growth Rates, National Tax Journal,
Vol. 38, 1985, pp. 497-511.
24. Scully, "how State and Local Taxes Affect Economic Growth", p. 9.
25. Huffman, et al., "Who Bears the Burden of Development impact Fees?" Coopers
and Lybrand, "Economic impact of Proposed City-Wide impact Fees for the City of
San Diego", pp. 55-58.
26. "When Dominoes Fall", A Statement of the National Real Estate Organization, April_
1991.
27. Isaac F. Megbolugbe, "Growth and Growth Controls (What Happens When Growth
Stops?)", Land Development, Winter 1989/90, p.17.
28. Coopers and Lybrand, "Economic Impact of Proposed City-Wide Impact Fees for
the City of San Diego', pp. 55-60.
29. John Landis, et al., 'The.lmpacts of Residential Growth Controls on San Diego's
Housing Markets and Employment Base" (Berkeley, CA: University of California,
Berkeley, Center for Real Estate and Urban Economics, 1988). Cited in
Megbolugbe, "Growth and Growth Controls (What Happens When Growth Stops?)",
pp. 17-78.
30. Coopers and Lybrand, "Economic impact of Proposed City-Wide impact Fees for
the City of San Diego', pp. 55-60.
31. Ibid., p. 14.
32. Pagano, "City Fiscal Conditions in 1991; p. 24.
Percent of Total Revenue
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MODEL OF CITY FEE COSTS TO CONSTRUCT A 1500 S$. FT. HOME ON A SINGLE
FAMILY IAT
ASSUMPTIONS:
A 46 LOT SUBDIVISION-TRACT APPLICATION-P.D. APPLICATION-VESTING MAP-
ENVIORNMENTAL DETERMINATION(NO E.I.R)-4MODEL TRACT HOUSE DESIGN- 1500 S9. FT.-
SINGLE LEVEL HOME/400Sg. FT. GARAGE
TRACT IMPROVEMENT ASSUMPTIONS:
$1,000,000 FOR THE 46 LOT TRACT-NO NOISE STUDY-NO SITE ACCESS PROBLEMS OR
UTILITY PROBLEMS
CITY OF SAN LUIS OBISPO
BUILDING DEPARTMENT
WATER IMPAC7% 2627.60
WASTEWATER IMPACT. 2217.50
WATER METER; 137.00
PERMIT& RAIN CHECK: 1370.00
PLUS:
SCHOOL TAX: 2250.00
RETROFITS: 3000.00
FIRE SPRINKLERS: 2250.00
TRAFFIC FEE: 2230.00
TOTAL BLDG. DEPT FEE: $16,081.00
PLANNING DEPARTMENT
(FEES CALCULATED ON 46 LOT SUBDIVISION)
PLANNED DEVELOPMENT 1549.00
TRACT MAP/VESTING MAP 3877.00
ENVIORNMENTAL 516.00
TOTAL PLAN.DEPT.FEE: $158.90($5940. DIVIDED BY 46)
ENGINEERING DEPARTMENT
(FEES CALCULATED ON 46 LOT SUBDIVISION)
BONDS(1.5 MILLION TIMES 1%) 15000.00
INSPECTION (2.5%) 25000.00
PLAN CHECK(1.5%) 15000.00
PARK IN LIEU FEE 97000.00
TOTAL ENG. DEPT.FEE $3195.65 ($147000.DIVIDED BY 46)
TOTAL FEES:$19,435.55
�leXS 0131M COUNT Y
JULIA i AGUIL4R JEFF FA!REA.NKS
GETERAL.%tiv.GER EDITOR
May 28, 1993
Honorable Mayor Peg Pinard
Council members Penny Rappa, Bill Roalman,
Dave Romero and Alan K. Settle
Dear Mayor and Council members:
The Telegram-Tribune reconsidered its decision to relocate a
portion of its facility in Paso Robles following a request from
former Mayor Dunin to remain in the City of San Luis Obispo. We
were pleased with the cooperation we received from the City Council
and from the majority of staff.
With City Council and staff aware that the oldest company in the
City considered moving to a more business-friendly part of the
County, it is disappointing to see that just over a year later, an
additional anti-business fee is being considered. The
transportation impact fee would have added approximately $123, 000
to our building costs.
We would have likely elected to stay in the City of San Luis Obispo
in spite of the added fees because our business necessitates being
close to the center of our distribution area. Other businesses
would have less need to be located in the center of the County, and
would likely make the choice to leave the City of San Luis Obispo.
It is time that we tried to make the City of San Luis Obispo more
attractive to business; it is certainly not the time to add even
more
deterrents to locating within the City limits.
lia S. Aguilar
Serving the Entire County of San Luis Obispo Daily
$825 South Higuera • Post Office Box 112 • San Luis Obispo, Califoinia 93406-0112 .9 (805)781-7800
1 aid
California
Central March 31, 1993
Coast
Chapter Mayor Peg Pinard..
City of San Luis Obispo
American 990 Palm Street
San Luis Obispo, Ca. 93401
Institute
of Architects Re: Proposed Traffic Mitigation Fees for City of San Luis Obispo
Dear Mayor Pinard:
Post Office Box 375
San Luis Obispo Our membership has expressed concern over the proposed traffic
California 93406 mitigation fees you will consider at your April 6 meeting. Increased
commercial construction costs will only accelerate the flight of
business from our city and the propcaed fees for residential
construction fail to address affordable housing issues.
Other specific concerns our chapter has with the proposed traffic
mitigation fees are as follows:
1. The assertion that transit and bicycle transportation provide
an alternative to travel by private motor vehicle is valid,
however, to assume that the distribution in demand is similar
is in error. How can that veritable bastion of the automobile,
the gasoline service station, be assessed fees based upon
driver's choices for transit and bicycle trips? Clearly, a nexus
for this scenario has not been addressed in the
Transportation Impact Fee Study. Also, please be aware of
the market forces generated by this fee. The fee is based on
the square footage of the building not on the pumps which
does not correlate to the trips generated. The message is
that all new gas stations will be of the kiosk type (100 sf or
less) to reduce the traffic mitigation fee.
2. The Transportation Impact Fee Study notes that the existing
level of transit service is not at an acceptable standard yet the
proposed fleet expansion is assumed to be provided by future
growth.
OFFICERS FOR 1990-1991:
Allan Cooper,President • Victor Montgomery,President Elect • Elbert Speidel,Secretary • Mary White,Treasure
DIRECTORS FOR 1991:
Sake Reindersma,Legislation . George Stewart,Membership • Stan Stein b James Aiken,Public Relations • Mik
Echelmeler,Student Affiliate Joanne Buchanan,Associates
t"Wr Mayor Pinard ---
��� March 31, 1993
California page 2
Central
Coast
Chapter 3. The proposed Orcutt Road/SPRR grade separation is noted
to be required by new development. This is incorrect, the
American project is required to provide emergency vehicles with an
alternate path to the Johnson Avenue area. • Currently there
Institute are only two unobstructed crossings of the SPRR in the city.
of Architects Appendix A of the Transportation Impact Fee Study shows
that 20% of the cost will be borne by new development with
the remainder to come from the PUC. We feel that new
Post Office Box 375 development should be assessed the proportionate share of
San Luis Obispo 30.6% of the 20% or 6.12% of the cost of the grade
California 93406
separation project. -
4. Although public sector uses are not expected to share in the
costs for the projects noted, their expected trip generation
should be included in the calculations. The report does not
appear :o make allowances for increased traffic generation
based upon expansion of public sector usages.
5. We feel that an exemption or reduction in fees for affordable
housing should be incorporated into the proposed ordinance.
These types of units have been shown to generate less trips
than standard residential uses.
6. The fee implementation is proposed to become effective on a
given date. We feel that this will be detrimental to the
business and construction community in the City of San Luis
Obispo. We urge you to consider implementing these fees of
an extended period of time (3 years for example). This will
cushion the effect of the proposed fees on the community.
7. We propose that a downtown benefit district be established to
promote businesses in the downtown core.
OFFICERS FOR 1990-1991:
Allan Cooper,President • Victor Montgomery.President Elect • Elbert Speidel,Secretary • Mary White,Treasurer
DIRECTORS FOR 1991:
Sake Reindersma,legislation • George Stewart,Membership • Stan Stein&James Aiken,Public Relations Mike
Echelmeier,Student Affiliate • Joanne Buchanan,Associates
Mayor Pinard
March 31, 1993
California page 3
Central
Coast
Chapter
S. Finally, we question the fiscal responsibility of a $ 12,000,000
American bike path along the SPRR right of way. Clearly, there must be
better ways to promote bicycle usage in the city. Remember,
Institute a 12,000,000 is enough to purchase a $ 300 bicycle for each
of Architects of the city's 40,000 residents which would promote bicycle
usage far more than a new pathway.
Post Office Box 375 Thank you for your consideration of our concerns.
San Luis Obispo
California 93406 Sincerely,
AIA C 'a Central Coast Chapter
Jeffrey mricX, A _
Director of Legislative Affairs
OFFICERS FOR 1990-1991:
Allan Cooper,President • Victor Montgomery,President Elect • Elbert Speldel,Secretary Mary While,Treasure
DIRECTORS FOR 1991:
Sake Reindersma,Legislation • George Stewart,Membership • Stan Stein b James Aiken,Public Relations • Milo
Echelmeler,Student Affiliate • Joanne Buchanan,Associates
San Luis Obispo Chamber of Commerce
1039 Chorro Street • San Luis Obispo, California 93401-3278
(805) 781-2777 • FAX (805) 543.1255
David E. Garth, Executive Director
May 26, 1993
Honorable Mayor and City Council
City of San Luis Obispo
990 Palm Street
San Luis Obispo, CA 93401
RE: TRANSPORTATION DEVELOPMENT IMPACT FEES
Dear Mayor Pinard and Council Members:
After significant evaluation of the proposed Transportation Development Impact fees, the
San Luis Obispo Chamber of Commerce expresses our opposition to the implementation of
these fees. The Chamber appreciates the need to maintain a viable infrastructure for the
well being of our community, and we understand the City's current fiscal crisis, however
the Chamber believes that the proposed fees are inappropriate for the following reasons:
1) The fees would have a negative short-term impact on the economy.
If implemented now, while our community is still suffering the
effects of a serious recession, the results would be devastating.
2) The City's long-term revenue stream would be seriously impacted
by the disincentive for business investment in our community. The
threat of significant development fees will force existing businesses
with expansion needs to relocate to other areas where the fees
and/or land costs are less. Also, the fees will deter new business
ventures from locating to our community. This, in total, translates
into a decline in employment opportunities, a serious loss in sales
tax revenue, and a twenty to thirty year diminution of City
revenue.
3) The project list of infrastructure improvements is flawed. The list
includes projects that have not yet been subjected to public review
(ie. widening of 101 and the SPRR Right of Way for Bikes). The
ACCREDITED
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project list lacks reliable cost estimates, and the projected
infrastructure needs are based upon Circulation, Housing and Land
Use Elements that have not yet been, and might not be, adopted by
the City Council. AB1600 mandates that development fees cannot
be used to increase future levels of service beyond those that
currently exist, yet several of the projects appear to do exactly that.
4) Impact fees should not be used to remedy existing deficiencies in
public facilities. It appears that the proposed fees are not equitable
because development is being required to carry more than its fair
share of the cost of infrastructure improvements. The distribution
of cost between construction projects and the community needs
additional consideration.
5) The City has a new Economic Strategy Task Force which has not
had time to develop its recommendations or review the potential
impact of these fees. Thus, the proposed fees could be in conflict
with the recommendations of the task force and the economic
health of the City.
The Chamber of Commerce has identified these problems with the proposed Transportation
Development Impact fees. However, the Chamber would like to work with the City in the
near future to develop a model to help understand the complex relationship between fees
and city income. It just may be, that in some cases, lowering the fees would result in more
total income to the City. We are concerned that without such analysis, the raising of fees
could actually hurt the City in the form of job loss and reduced sales revenues. It is with
these concerns, that the San Luis Obispo Chamber of Commerce urges you not to adopt the
transportation fees at this time.
Respectfully,
Charlie Fruit
President, San Luis Obispo Chamber of Commerce
R. PCLTL AND ASSOCIATES
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June 1, 1993
San Luis Obispo City Council
CIO San Luis Obispo Chamber of Commerce
Attn: Mr. David Garth, Executive Director
1039 Chorro Street
San Luis Obispo, CA 93401
Re: Proposed Ordinance Imposing a Transportation Fee
City Of San Luis Obispo, CA
Dear City Council:
I have reviewed the subject proposed ordinance and I feel it is important to explain the financial-
impact this fee would have had on the Sco!ari's Market we are developing at ti•e corner of Marsh
St. and Johnson Ave. in downtown San Luis Obispo.
As I understand it, the fee for commercial retail space as outlined in this ordinance is approximately
$3.39 per square foot of building area. Our new Scolari's Market is 30,000 square feet and
therefore our fee would be $101,700.00. This amount is 5.65% of our total hard and soft costs
(excluding the costs for land, financing, and management). Even without this transportation fee
we are currently reviewing our project desi n in an effort to cut several hundred thousand dollars
so that our project is financially feasible. If we had a transportation fee of $101,700.00, it would
make our project extremely difficult to justify financially.
agree that developments should pay their actual share of costs associated with their project but
perhaps there are other alternatives. It is also important to also look at the revenues new projects
will create by way of property and sales tax as well as employment payroll. If we want new
businesses to keep our local economy strong, then we should look at tax increment financing -just
as many other cities have - at least in designated areas of San Luis Obispo. Under iax-increment
financing the new development will pay their full share of costs but the long term payment plan is
offset against a portion of the increase in taxes this new business creates. in the meantime the
citizens receive another source of employment, taxes increase, and properties are upgraded,
Thank you for considering my comments.
Cordially,
R. POLTL AND ASSOCIATES
Randall P. Poitl
SAS MAIN $7A(E1 SVITE 4.1. MCRRO SAY. CALIFOWA f3ee2 TEL 8:5 :?2•5fti) - FAX 905 771•SFC�
Ente rp rises
P.O.Box 2119 ---
Avila Beach,CA 93424
April 15, 1993
Mr. Dave Garth
SLO Chamber of Commerce
1041 Chorro
San Luis Obispo, CA 93401
RE: Traffic Impact Fees
Dear Dave:
I am writing this letter at the request of the Chamber regarding the City's
proposed Transportation Impact Fees. My comments are directed to Bill
Statler's letter of December 14, 1992 and his analysis of the cumulative
impact of such fees. Before commenting on that letter, I would like to share
a few observations which I believe are pertinent.
Development Impact Fees are probably an appropriate means for
communities to obtain funding for necessary infrastructural improvements
which accommodate new development. Assembly Bill 1600 provides that
there must be a nexus between the fee and the project's impact. The City's
project list seems to be heavily weighted with infrastructural improvements
tied to projects presently outside of the City limits. Furthermore, the
distribution of cost between proposed projects and the community's share
appears to require additional consideration. It is not clear whether there is
a direct relationship between the expected trips generated by a
development to its pro-rata share of the attributable impact.
The proposed program contains a formula which attempts to use weighted
averages to determine the appropriate share of impact. It would appear
that in certain instances, a new development may actually diminish trips
within a specific area. Under the presently proposed arrangement, no credit
would be given for this instance.
With regard to Mr. Statler's letter, his analysis is based on a "typical 50,000
SF building". I believe that this analysis contains a mathematical error
regarding the calculation of the traffic mitigation fees. Also, the basic
assumptions regarding water and sewer for a typical 50,000 SF building
seem to be insufficient for a "typical situation".
805/595-7777
FAX 805/595-7927
A OivWm of Infinite Nnrkons,Int
J �
Mr. David Garth _
Page 3
April 15, 1993
First and foremost it must be kept in mind that if the cost of doing business
or starting a business in San Luis Obispo exceeds the business ability to
meet those costs, we end up not having the business , the jobs and the
taxes. Therefore, the macro view needs to be carefully considered in
determining the feasibility of any particular fee on a cumulative basis.
Best regards,
Rob Rossi
Mr. David Garth _
Page 2
April 15, 1993
Mr. Statler's letter suggests that the proposed traffic fee would be $33,075.
Assuming a 50,000 SF building with a traffic impact fee of $3.30/SF, the
resulting amount would$165,400, an amount five times that projected in Mr.
Statler's analysis). Please keep in mind that the $3.30/SF figure is half of
the originally recommended fee of $6.60/SF.
Mr. Statler makes the assumption that a typical 50,000 SF building would
require a single 1-1/2 inch meter to accommodate a single tenant. From
practical experience, a single tenant building of this size would presumably
have a water meter of at least three inches up to six inches. In San Luis
Obispo, a typical 50,000 SF project would be multi-tenant with six (6) to ten
(10) separate tenants if it were a retail use. Based on this more appropriate
assumption using a minimum of six tenants, I have prepared the following
analysis for comparison to the numbers prepared by the City.
50,000 SF 50,000 SF
Single Tenant Multi-Tenant
Water 1 - 4" @ $57,807 3 - 1" @ $15,765
Sewer 1 - 4- @ 48,785 3 -1-1/2" @ 31,560
Traffic 165,400 165,400
Total 271,992 261,510
As you can see, the cost for these fees alone are significantly higher than
those projected in the original City analysis. Unfortunately, the impact fees
are only part of the story since the City's present policy requires that all
increased use of water is accomplished by retrofitting of existing properties.
While this is not an impact fee, it is a direct cost that cannot be separated
from the discussion considering overall costs.
Retrofitting is presently costing existing businesses thousands of dollars in
direct expense, and untold liability for potential problems arising from the
retrofitting. Furthermore, the amount of retrofitting left to be done within the
City may not, in fact, accommodate the needs of existing businesses to
expand let alone future growth. All of these circumstances need to be
looked at in a comprehensive and cumulative manner if we are to truly
determine the appropriateness and feasibility of specific fees.
Mori IN AGENDA /
DATE ITEM #
- , MEMORANDUM
June 1, 1993
TO: City Council
FROM: John Dunn, City Administrative Office
SUBJECT: TRANSPORTATION IMPACT FEES IN OTHER CTTIES.
On Friday, May 28, 1993, Councilmember Romero asked if we had any information on
transportation impact fees in the cities of Santa Maria, Paso Robles, and Atascadero.
Recognizing that each city has its own rationale for setting fees, and that there are a variety
of ways that fees are levied for various land use types, the following is an overview of fees
in these cities for a single family residence:
Atascadero $ 450
Paso Robles $2,464451922
(varies depending on area)
Santa Maria $ 1,395
(Being proposed to Council FtECEIVED
for final adoption this week; JUN 1 1993
conceptually approved at this
level from an originally proposed CUNM
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fee of $2,810)
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MEEnAGENDA
DATE ITEM,
MEMORANDUM
June 1, 1993
TO: City Council
FROM: Charlie Fruit, Chair, Economic Strategy Task Force
SUBJECT: Traffic Impact Fee
During our meeting on May 28, 1993, the Economic Strategy Task Force (ESTF)
unanimously endorsed asking the City Council to postpone a final decision on the
recommended Traffic Impact.Fee, and instead referring the matter to the ESTF for further
evaluation. It is our strong feeling that the fee, as currently drafted, can have very negative
consequences on business attraction or expansion in San Luis Obispo. On the other hand,
we recognize the importance of the City having the resources to support essential
infrastructure to meet future needs.
Thus, the issue is a complex one requiring further evaluation. Giving the charge of the
ESTF, and the diversity of our membership, we believe we are the most appropriate body
to further study and recommend on this matter. Given other pressing matters before the
Task Force, we would not anticipate having a recommendation before the Council until
approximately September 1993.
Thank you.for your consideration.
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- JING AGENDA
DATE 19 3 ITEM #Oki
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277 Granada Drive IF4x
San Luis Obispo,California 93401-7396 USA
TELEX Il:910-351-5809,JBL SALU
Phone 80543-1531 SCIEN71C, INC.
FAX 805-543-1531
A Subsidiary of Genta.Inc.
May 29, 1993
COPIMTO:
The Honorable Mayor O•D010ces Action /L7 FYI
and r rCDDDIR
Council Members
City of San Luis Obispo p� A�A�-"TI�UoR�,, O F D F
P 0 Box 8100 tt�L1UZK/OItIc. ❑ POLICECK
San Luis Obispo,CA 93403-8100 11 MCIMT TIMM EJ REe_DM
❑ 1210E ADF'Ln 0 unLDIP-
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Dear Mayor and Council Members:
I am writing to you to voice my concern over the proposed Transportation Impact Fees that the
Council is scheduled to consider on June 1. This fee could have a significant impact on the costs
that JBL Scientific and our parent company Genta, Inc.would incur should we proceed in the next
1-2 years with expansion plans to construct second building adjacent to our present laboratories.
It would likely be;a two-story building of approximately 50,000 sq. ft and would be devoted to the
manufacture of the chemical compounds needed for the clinical studies to prove the efficacy of the.
new generation of pharmaceuticals that Genta is pioneering. The projected feeof$3/sq. ft would
add approximately$150,000 in costs for the project. I am already very concerned about the high
level of fees on new construction,including very significant ones that would be imposed for water
hookups and the"retrofit program"because San Luis Obispo has failed repeatedly to authorize the
development of adequate water resources. (It was for that reason that I supported the State Water
Project last fall,in spite of its shortcomings.) I believe that the total fees that we can anticipate for
this project is reaching the point at which the Board of Directors of Genta will decide our future
expansion should occur in a community that is more supportive of businesses that bring stable,
desirable employment in a promising high tech industry.
The Transportation Impact Fees are proposed to be levied on new projects based on the premise
that the infrastructure improvements are only necessary because of the growth resulting from those
new projects. That,of course,ignores the fact that many of the improvements, such as quite costly
bike lanes along the railroad tracks, are ones that are proposed to enhance the 'quality of life' for
the whole community and are not directly related to the impact of the new projects. An additional
premise perceived by new or expanding businesses from such fees as this is that the community
views new projects as causing unwanted growth,and are tolerated only if those projects pay a large
proportion of the costs of infrastructure improvements. If the community actually viewed such
projects as valuable there would be more support for developing necessary infrastructure
improvements as a community-financed,shared investment in the future vitality of our city.
In many parts of our country and overseas there is a significantly different appreciation of the
value to a community represented by a company such as Genta. To illustrate this, I am enclosing a
copy of an article reporting the selection of Marseilles, France:as the site for Genta's European
MAY 2 8 1993
t;Irr COUNCIL
SAN LUIS OBISPO,fA
r
operation. This city was selected over a number of others because of an unusual arrangement
involving national,provincial and city agencies combining to offset more than$10,000,000 in costs
for the clinical studies of some of the new pharmaceuticals being tested by Genta. This forward-
thinking arrangement will bring to Marseilles a research group working on part of our leading-edge
technology, a clinical development team and, eventually, manufacturing facilities for the
European market. That city gains quality jobs, secures a magnet for expansion of the
biotechnology industry there and, also, will eventually return royalties to the government on the
sale of these products.
By sharing this information with you, I am in no way suggesting that Genta and JBL Scientific are
looking for a similar subsidy for our expansion. But I am encouraging the Council to take a broad
perspective regarding the actual value to the community of expanding or new businesses. And I
.am indicating that imposition of more and more fees by the city of San Luis Obispo is jeopardizing
the chances that our company will continue to expand here. I believe our company offers a great
deal to San Luis Obispo and most of you have visited our company and, I believe, really share that
opinion with me. Companies lice ours effectively pay a significant share of the costs to the
community from our expansion through property taxes, on-going fees, sales taxes, etc. We
strengthen and diversify the local economy by providing quality jobs,by bringing in outside money
for our exported products and by supporting many community programs with time and
contributions.
I believe it is time for our community to begin moving away from the "welcome, stranger" fee
approach to meeting financial shortfalls toward a shared approach to building a future for our city
that assures vitality and quality and true community spirit. You can provide forward-looking
leadership by rejecting this fee and, instead, challenging the community at large to share in an
investment in a future together.
Sincerely yours,
Lauren R Brown, Ph.D.
President
copies to: Dr.Thomas Adams, Chairman and CEO,Genta,Inc.
Maggie Cox, SLO Assoc. of Manufacturers and Distributors
David Garth, SLO Chamber of Commerce
John Dunn, San Luis Obispo City Manager
Charlie Fruit, Chairman, SLO Economic Task Force
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.TING AGENDA
DATE ITEM #
NORTHWINDS
4561 Orcutt Road, San Luis Obispo, California 93401 (805) 543-8475
May 28, 1993 Telex 658531 NORTHWIND SLO
4 COPM70:
Councilman Alan Settle 0 Dawba Aai= ❑
City Council of San Luis Obispo Og CAo kDpDUL
UL
Post Office Box 8100 ACAO ❑ MECt-W
San Luis Obispo, CA 93403-8100 Arioiuv Y ❑ Fw nm.
CLERK/ORIG. ❑ roucxcx
Re: Proposed Traffic Impact Fees ❑ C�II E 1i Pya- L
p urtLD
Dear Alan:
After our conversation yesterday, I thought it would be appropriate to formally express my opinion
of the proposed Traffic Impact Fees.
There is a saying that "timing is everything". The timing of these proposed new fees just couldn't
be worse. The California economy and California business in particular is in a horrendous slump,
expected to last until at least 1995. These fees, at the extremely high amounts suggested by staff;
are another burden on business which will further slow economic recovery by raising the cost of
rents, and, therefore the costs of goods.
- The fees on a project the size of Los Nomadas would be staggering, and lead one to question the
bottom line potential of any large-scale development under the proposed structure of the Traffic
Impact Fees.
A good current example of this potential impact is the new shopping center(Marigold Center),
proposed on Highway 227 in the vicinity of the Islay Hill, Santa Lucia and Country Club houses.
This shopping facility is obviously needed in the area and will provide sales tax revenue to the City.
Why then would the City charge ±$600,000 in Traffic Impact Fees to this project? It is illogical.
What benefit will accrue to the City and its residents if the shopping center isn't built or,worse yet,
gets built but won't rent out because of the additional rents necessary to cover such high costs? It
seems to me that the fees are potentially a lose/lose proposition at this time, particularly in this
state and local economic condition. This is just one example, but I could site other examples as
well.
I hope you will find it prudent to reject the proposed traffic fees at this time. If, indeed, the fees
are an element of the long term fiscal needs of the City, bring them back for reconsideration at a
more reasonable level in 18 to 24 months, if the economy looks more robust.
qRe rds, RECEIVE D
kMAY2810
Nos, N.V. cmr couaat.
WA us olusPo,CA
_ cc Mayor Pinard
City Council Members: Bill Roalman, Penny Rappa and Dave Romero
m\dm-trff.fee
''^EYING AGENDA
L„I E ITEM #=
� BIAS
BUILDING INDUSTRY ASSOCIATION OF THE CENTRAL COAST
P.O. Box 6180 • Santa Maria,Ca 93456
(805)928-7196 FAX(805)349-0693 �,g
RFcel V Eo
p� 2 61993
CITY COUNCIL
May 25, 1993 SAN LUIS OBISPO,cA
Honorable Mayor and Members of the City Council
c/o Diane Gladwell, City Clerk C0PIEST0-
City of San Luis Obispo ❑ °ta Ac&m,..,/ ❑ FY!
P.O. Box 8100 I2(CDD
❑ IN
San Luis Obispo, CA 93403-8100 Pa-ERK
� n �R�� PW DIR/OW. ❑ POUCH(1i
❑ M 7E�bi ❑ Mr—DIX
Re: TRANSPORTATION DEVELOPMENT ENVACT FEES ❑ ❑❑ CDU.
Dear Mayor Pinard and Council Members:
After lengthy review and discussion with city staff, the Building Industry Association of
the Central Coast is not able to support the implementation of the proposed
Transportation Development Impact Fee at this time. We make this determination for
the following reasons:
1) The fee is based on Circulation, Housing and Land Use Elements that have not, as
yet, been adopted by the City Council. We believe that any valid fee program
must be supported by and based on valid documents.
2) Some of the projects, most notably the bike path along the railroad right of way,
do not fall within the AB1600 guidelines. Specifically, "Developer Fees" cannot
be used to increase future levels of service beyond those that currently exist.
3) This fee puts "infill" projects at a distinct disadvantage to "specific plan" area
projects. "Infill" land is typically much more expensive than land in outlying
areas. In order to be competitive developers will be forced to seek cheaper land.
This is contrary to the city's long standing policy of promoting "infill" projects and
projects that generally support existing local business enterprises.
1
Transportation Development_..ipact Fees
May 25, 1993
Page 2 ---
4) Our industry, our local economy and indeed the city cannot afford to cripple new
development beyond its current, considerable, financial problems. Increasing
development costs at this time will undoubtedly curtail construction and thus ensure
that the city will not get much needed increases in property, sales and related
business tax revenues normally associated with new development. It will also
ensure that the local economy will not get an added boost and the local building
industry will not recover from one of the most severe recessions in our history.
Having said all the above, however, we do recognize that as developers it is in our
interest to have decently financed cities to work in. We want cities to be well
capitalized with good roads, parks, libraries and other infrastructure. Towards this end
we believe that most developers would be willing to help out through fee programs
provided there is still profit in their projects and the fees resulted in a beautiful, clean
city. The problem right now, however, is there is no profit and, accordingly, no
margin for more fees. We, as an industry, are working hard just to hang on.
Additional fees, as needed as they may be, will reduce, if not stop, development and
therefore hurt both the development/construction industry as well as our city.
It is in this light and in the spirit of cooperation to find solutions to help all of us that
we make the following recommendations. First, the city should do an economic
analysis on what impact any particular fee program would have on our economy. This
study should reflect that each city must compete for development with other cities in its
surrounding area. This type of empirical data will take the emotion out of the issue
and put everyone on a sound playing field with useful information. Second, the city
should look at some tradeoffs that may help both the city and the developer such as:
1) Significantly reduce the entitlement process time, perhaps by curtailing ARC
involvement. Time is money and that is money the city could have.
2) Put more certainty in the entitlement process, thus reducing the developers risk.
The less the risk the lower the rate of return the developer needs to have. This
savings is money developers would be happy to share with the city in the form of
fees.
3) Be conservative in adding costs to a project through additional requirements.
Make sure that the extra items required are truly necessary. Each added dollar of
cost today, is at the expense of something else.
4) Charge any development related impact fee at close of escrow or, in a lease/rent
situation, upon occupancy. This cuts down the developers up front cost and his
interest carrying cost. Again, developers would be happy to pass this savings on
to the cities.
The city must realize that they are partners in the real estate development and
Transportation Development .,pact Fees
May 25, 1993
Page 3 _.
construction process. Cities benefit from and indeed need new development.
Accordingly, San Luis Obispo must now be part of the solution. If the city wants more
money out of new development they must help developers find ways to get it without
burdening either party.
Sincerely,
B INDUSTRY ASSOCIATION OF THE CENTRAL COAST
De Moresco
President