HomeMy WebLinkAbout04/27/1993 Item 2 - Transportation Development Fees ' • II 3
MEE' G"ATE:
gl'111i�II 11-0111 city of san tuts OB)sp0
COU14CIL AGEN REPORT ITEM"NUMBER:
A
FROM: William C. Statler, Director of Finan nnJp`
Prepared by: Linda Asprion, Revenue Managerj"
SUBJECT: TRANSPORTATION DEVELOPMENT IMPA((�J'CT 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-,t 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 implemented 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 ways of implementing this policy.
■ If we do not adopt trap:.-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 c-Gastruct the facilities, but at the expense of other important
community services - police, fire, recreation, parks, cultural,. and social
services - th !t do not have alternative revenue sources available to them.
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���H�ib�IVIIIIIfIIIh ��Ill city of San Luis OBISPO
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.
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
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 CACs 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.
������,►���Illlili�Pn ����ll city of San lues OBISpo
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. All 1600 establishes certain requirements that must be met by any
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.
3. Determine that there is a reasonable relationship between the:
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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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*
e 's 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.
Transit Projects
The following transit improvements approved in the 1991 Short Range Transit Plan have
been included in calculating transportation impact fees.
■ Fleet Expansion of 5 Buses
■ Bus Stop Amenities at Various Locations'
■ Downtown Multi-modal Transfer Center
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. )4
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city or san tuts osispo
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 different types of land 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 they affect affordable housing?
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?
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 aedA adjustments, or exemptions available?
The proposed ordinance provides for credits and exemptions under the following
circumstances:
■ 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.
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.
■ Exemptions. The fees imposed under this ordinance shall not apply to the following:
• 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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���������11VIIIIIIIII�I1° IIUIU City Of San LUIS OBISPO
NNarms 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 sumriarizes impact fees charged by comparable cities for single family
residential (SFR) uses:
Single Family
City Residential Fee
Brentwood $6,922
Camarillo $4,240
Half Moon Bay $1,450
Livermore $29240
Napa $1,853
Oxnard $3,826
Pismo Beach* $336 - $3042
San Clemente* $1,200 - $6,100
Tracy* $49586 - $8,047
Vacaville $5,812
Ventura $5,245
San Luis Obispo (Proposed) $29152
* 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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����iti�IIVIIIIIIfIIIhII�III city of San Luis OBISp0
COUNCIL AGENDA REPORT
Fee Calculation Total Fee
The Crossroads Credit for 6 SFR units (demolished) $(121912)
Six Multi-family Residential Units 11,460
Retail - 17,528 square feet 59,473*
Service - 5,125 square feet 11.993
Total -$ 169014
* 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
Service - 1,300 square feet 3.042
Total $ 35,875
Walters' Bros. Bldg Office - 43,269 square feet $186,706
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.
When wiH the increase be implemented?
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.
How will the fees be used?
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 tha:i 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.
i�IH111Nj(V�IIII�I����NUIIIIUIII City of San WAS OBISpo
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
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
project be deleted from the impact fee calculation. Deleting this project from the
fee calculation would reduce the bicycle improvement fee portion by $13.28 (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.
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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* 1 000 * 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.
ALTERNATIVES
There are seven basic alternatives available to the Council:
■ 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.
■ 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 pkv 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 _/O
i�IN11�Nj�►IIIIhIII►Ni�uill���U City of San tuts OBISPO
A 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.
■ 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
preferable for the long-term benefit of the City over not having such a fee.
■ 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
■ Ordinance implementing transportation impact fees
■ Resolution establishing amounts for transportation impact fees
����h�}��► iillililllu ��p��l city of San WIS 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
Industry Association of the Central Coast
ENCLOSURE (Council Only)
■ Transportation Impact Fee Study, David M. Griffith, March 15, 1993
(Copy available in City Clerk's Office for public review)
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 beused 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 proposed 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 to 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 pursuavit 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 improvemezits 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:
L Other goverianent 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 Constn.ction 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 shAl. 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
improvement needed to provide servicesor mitigate the need for the facility or the burdens
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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
used, and demonstrate a reasonable relationship between the fee and the purpose for which
it was charged. The findings required by this section need be made only for monies in the
possession of the City, anti 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 owner. or 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.
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 Gladwe!1
APPROVED:
torn
RESOLUTION NO. (1993 SERIES)
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 transport,;tion 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.
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 determine 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 Pavment
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 ai)d remain valid for as long as the application is proceeding through
valid processing as per the Uniform Administrative Code.
S. 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.
jL-T.10
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:
i tto y
.4
TABLE 1
TRANSPORTATION IMPACT FEES
Land Use Category Impact Fee per Unit
of Development
Single Family Residential $ 2,152/DU
Multi-Family Residential. $ 19910/DU
Retail' $ 3,393/KSF*
Office $ 4,315/KSF
Service Station $229261/KSF
Service Commercial $ 2,340/KSF
Industrial $ 1,246/KSF
Hospital $ 3,865/KSF
Motel/Hotels $ 999/Room'
Other $ 201/Trip
s Fees for retail and [;otel/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 Fec:t
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- Exhibits
San Luis Obispo Chamber of Commerce
1039 Chorro Street SanLu p is Obispo, California 93401.3278
(805) 781.2777 • 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-1, B-2) , Exhibit 3b, we have one
question.
-- How was the Projected New Development [4] determined for
each Land Use Type?
ACCREDITED
- C O E•OF MINUET=
- C..YBL.OF COM"CRC[
0[cwt uRit[D ELrt
-. .. - -
1
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 vans
Di ector, Governmental Affairs
cc Ken Hampian
4-as
Exhibit
• �►�i��li��lilif lllllllfl����� �IIIfIII�I I�C '
IIII III
City of saw WIS OB �
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 7'. 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.)
`'t 'J7.
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 X35- /6375
Total Estimated Impact Fees $ -52,8gs /85;/.
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 3.32960
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,
�;6l
William C. Statler
Director of Finance
CC. Ken Hampian, Assistant City Administrative Officer
Terry Sanville, Principal Planner
MFETING AGENDA
E ITEM #
Trojan Enterprises
April 26, 1993 ��' o' A�*on
i �i_j �
F 1p CDD DIP,
� FIN.DI�p E3 FIN.
:teE:Ja '
DIR•Ma or and City Council C]
PCLIL
CITY OF SAN LUIS OBISPO izA- i C /; C.DIo j
D�•,.
CITY HALL )L LSD:,.
P.O. Box 8100
San Luis Obispo, CA.,93403
Dear Mayor and,Council Members:
This letter is in response to my review of the city's proposed traffic mitigation fees to be
imposed on new development projects, particularly commercial developments like we are
proposing for the expansion of Central Coast Plaza. I do not disagree that new
developments perhaps should make a contribution towards solving traffic problerri"s that
a specific project may create, providing the amount charged is reasonable and affordable.
Based upon my 33 years in the commercial development business; and more particularly
analyzing the impact on our Central Coast Plaza development, I can assure you the fees
as proposed are unreasonable and will in effect eliminate new developments in the
community thus creating no income for street improvements.
The other issue I find specifically disturbing is that the Prado Road interchange is excluded
from benefiting from this source of proposed revenue. Considering this 'interchange
probably is one of the most important circulation elements to be achieved in the future,
its exclusion is not logical. I strongly suggest you consider the following if and when you
adopt this kind of a program.
a) Do not exclude the Prado Road proposed interchange from this
source of revenue.
b) Provide for all traffic related contributions made by the Central
Coast Plaza expansion to apply to the construction of the Prado
Road interchange and other street improvements required by the
project.
C) Include a provision to allow for staff or council to negotiate traffic
fees for significant revenue producing developments such as retail,
automobile, or hotel uses.
RECEIVED
APR 2 7 1993
otrY COUNCIL
SAI`1 LJJIS OBISPO.CA
510 SOUTH GRAND AVENUE SUITE 300 GLENDORA CALIFORNIA 91740 TELEPHONE(818)914.4691 FAX(818)914-3962
Mayor and Council Members
April 26, 1993
Page 2
d) Arrive at a fee structure that is more affordable than the one
proposed for commercial developments.
Please be assured that the ordinance as proposed would cause the Central Coast Plaza
expansion to be economically unfeasible to proceed with, as would be the case with most
development projects I can think of. When I was called by the newspaper last week to
comment on this issue, the question was posed "can't we pass this increased cost on to
the tenants?" This is not possible because the cost of doing business in San Luis Obispo
is already too high and tenants already-:struggle to-.pay their rent. -You have a very
important decision to make on this issue and I hope this input will be helpful and
meaningful.
Sincerely,
Wdrim*Bird
President
WLB:sga
`- MEE.,EJ AGENDA
DATE �°���� ITEM # .®
REALTOW
Franklin Realty
965 MONTEREY STREET GARRY HOLDGRAFER, BROKER-OWNER
SAN LUIS OBISPO, CA 93401
(805) 543-2682
27 Apr i 1 1993 CoAMM:
❑' Action FYI
IIJ CDD DUL
❑ FIN.DaL
Mayor Peg Pinard O 0 FIRECFIEF
C1 FW DUL
Council persons : Rappa, Romero,Sett 1 e and Roalman �-�/O?.IG, L FOL1
I:1 1-IC7.4.TEAM 0 RECDIA
Subject : Fee Increases ❑ 0 '' Tr„a.*�tE
15
We are very very concerned aboutthe proposed building fee
increases on commercial properties. We have waited eight years for
annexat i on i nto the c i ty to deve 1 op our property i n a way that w i 1 1
benefit the people of San Luis Obispo. Your overburden proposal
fees w 11 el iminate our users from the planned complex .
If we continue to raise cost and eliminate national known users ,
owned and operated by local people, the people of San Luis Obispo
will continue to travel to Santa Maria to shop . This action of
egress will continue to increase instead of decrease with the
proposed fees .
I was informed Costco of Santa Maria did eighty million dollars
worth of business in 1992 . We estimate 25 to 30% of this business
came from San Lu i s Ob i spo. Wou 1 dn' t i t make more sense to be ab 1 e
to build commercial stores so we could compete with Santa Maria
businesses .
The user we have wi 11 generate sales tax revenue for the City of
San Luis Obispo in the approximate amount of Two Hundred Fifty
Thousand Dollars per year , times twenty years , San Luis Obispo
wou 1 d generate F i ve M i 11 i on D61 1 ars worth of revenue from th i s one
project alone. It would make sense to generate revenue this way for
San Luis Obispo, than al low Santa Maria to continue to receive San
Luis Obispo' s revenue.
My suggestion is to stop raising our up front fees and help us
build good commercial projects rather than continuing to allow
commercial projects and revenue to travel to Santa Maria.
Ava i 1 ab 1 e any t i me to d i scuss th i s matter - at your conven i ence.
54433-2682 .
APR 2 7 1%
Garry HotdgrafeCITyCOUNCI'L
SAN LUIS OBISPO, CA
mEETI G AGENDA
San Luis Obispo DATE "0 - ITEM #
Property Owners Association
P.O.Box 12924
San Luis Obispo,CA 93406 Full Council has
received this dacunlent
23 April 1993
Cos:ES io:
i ❑-Ila o!c,Action ❑ FYI
Honorable Council Members ! Hand Delivered
Ci of San Luis Obispo 5eca.1r� C7ODIZ `
D171-
City p VcAo FIN.D, R.
Post Office Box 810 9 AC%O C7 FIREICHIL"
San Luis Obispo, CA 93403 [ '_A170-&\W CJ FW nnt. RF'C EIVEY
❑ 2.SGRIT.T_.s":I El j:zc. APR 2 d a99
Honorable Mayor Pinard, 0 c.READ FL2_❑ Ln'I�XR.
r=✓.fy.�-- CITY COUNCIL
U SAN LUIS OBISPO,CA
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 J
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,
SAN S OBISPO PROPERTY OWNERS ASSOCIATION
C. Florence
'President
Enclosure-"The 55 Best Places To Do Business in California"
cc.SLOPOA Board of Directors
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TO: DO' BUSINESS. IN 'CALIFORNIA
a . par � � rase T/Iarl. aii
'v .. cier Ueberroth, chairman of \ot even•one agrees, however, that
the state Council o n California's economic woes are due to
•r
t Competitiveness, last year foul business weather blown in by gov-
+? described California's public ernment. Stephen Levy and Robert
policies, taxes, regulation, Arnold, economists with the Center for
3 „r and workers' compensation Continuing Study for the California f
costs as a job-killing Economy, challenged Ueberroth at the 3
r' 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 migta- I
February California Eco- tion—for the state's ills, and predicted
F, 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 workers' compensation. "No one has been able to produce a �
Governor Pete Milson, meanwhile, inau- list of companies that have left j
gurated his Team California program to California for business climate reasons I
work on business retention. 1
that would account for as much as 5
THE HUNTINGTON BEACH - SAN JOSE
Courdy:Orange County:Santa Clara
Population:185,000 Popolatiorn 803,000
Largest Employers: McDonnell Douglas; Largest Employers Lockheed Missiles; Hewlett-
City of Huntington Beach: Golden West College Packard; IBMBusiness -
15 BEST Limse Tax:A:$997; B: $267; C: $93 Buscness License Tax:A:$7,926; B: $1,356; C:
Office Lease Rates: $0.85-1.75 Median House $186 office Lease Rates:$1.25-2.00 Median
Price: $271.000 Crime: 1 Education 54,657 House Price: $225,000 Crime: 3 Education:
Transportatiac Hwy.•Pacific Coast Highway,405; $4,846 Transportation: �
asportation Hwy:F280. 101, 680, .
Air.,Orange County Airport; Rail:Southern :_880, 17,*.Air. San Jose International; Rail:
Pacific, Port Long Beach, Los Angeles.Special Southern Pacific,Part Oakland Port.San f� �
is1
Incentives: City officials meet with businesses Port. Speeol I V The'pty has-an Enterprise
personally to explain city regulations and per- Zone covering 15 square miles,and an Industrial
BIG nits, and the city provides free seminars and Incentive Zone where companies are eI gble for a i
one-on-one counseling through the Huntington - waiver from construction taxes.There's also a
Beach Small Business Administration. Development Enhancement Fund providing loans to
CITIESCorlett Barbara A Kaiser, Director of Economic businesses that create new jobs or generate large
Development,714536.5582. revenues. Contact Pauline Millard,Associate
Director of Economic Development,408.2915265.
SMART CONIMUNITIES DON'T SIT B-1 Ch . A
A special California n= FRESNO SACRAMENTO
ausiness report on now _ Comty Fresnol- _ Comdy:Sacramento
California's2.400 . ..' r' Population:385,100
LbrgestEmploy-- Zacky.Farms VendoCo Largest Employers: State of California;
leading cities Ct%iiipnon Parts Rebuilders y" . ( Y
_ - McClellan Air force Base; U.C.Davis
are working to LiiYox Tax: -,$132,258;'8 517592: Business l7cense Tax A $5,000; B: $3,996; C:
ORice.Lease Rabrs 50,751,65_Medran.:
build a sunny $7500(depending on yrs of certification) Office�''
r Horne Prtee:$85,000_Crime ]4 Edaeatlorc' Lease Rates: $1.45_2,30 Median House Price:
business climate. E43.974-Transportatiae jiwy.S.H.5: Arr.,Fresito 1 $122,000 Crime: 12 Education: $4,192
pjr Termyinal Rad SaritarPe Southern Pacific. -- Transportation: Hwy:1-5, LSO; Air. Sacramento
Wc-:,- - Fresno has an Enterprise Zone . Airport; Rail:Union Pack, Southern Pacific,
as well"as training programs that allow comps Santa Fe; Port:Sacramento Port. Special
4 jnieswto.•receive,taxaredits an'dcashfo hiring ; hromtivez An Enterprise Zone. a Foreign Trade
> eddiLOnal employees CoetactJohn Qwnng, � Zone, and a Recycling Market Development t
Pres dent Fres^c Economic Development 209 Zone.The city also offers financial aid options for 1
businesses relocating in Sacramento, and will
put large businesses on the'fast VaW permit
processing system. Contact Tim Johnson,
- T-x Economic Development Manager.9162647223.
24 .April 1993
percent of recent job losses," said That isn't the case, of course. The 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-
substantiate an exodus." the state, anymore than San Diego and tain a healthy tar base and strong com-
It's also hard to find California com- Mendocino have the same annual munity. With the competition keener
panies that have rushed to move here rainfall. Rather than a single business than ever before, it's hard to find a city
or expand here, either. But no matter climate, California can boast dozens of uiLhout a business-community develop-
whose side in the debate you take, one "micro" business climates, eager for a men program.
point should not be overlooked: piece of the relocation pie, hoping to Wlth this in mind, we set out to dis-
California's great economic diversity— tap the natural movement of compa- cover what California's cities are doing
a diversity evident in its more than 450 nies 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,you'd think California business. They know that, with tax dol- leading business environments.
was one vast, uniform marketplace, lars 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,t+ith the same yawn 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 from Los Angeles, with 3.5 million resi-
%ithin its borders. leaders know they must actively court dents, to Richmond, with 92,600. Our
SAN DIEGO GLENDALE ANAHEIM
Comdr:San Diego County.Los Angeles Comrq:Orange
Populatime 1,149,600 Populafar.184,400 Population:279,400
Largest Employers Sharp Healthcare; General Larged 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 Lieeese Tae None Office Lease Rates:. Business LLcense Tax: A: $4,774: 8: $974: C:
license Tai A $2,358; B: $533; C: $210-2.80 Median House Price: $283,000 $1,244 Office Lease Rates$L43(avg.) Median
$208 Office Lease Rates -1
$1.56 .94 Median Crime 2 Education: $3,879 Transportation: HW. House Price•. $199,000 Crime:'4 Education:
House Price: $179,000 Crime: 7 Education: 1`5, 1 210, S.H.2. 134; Air. Burbank/Glendale/ $3,890 Transportation:Hwy.A5;1 S.R.57,22:
$4,547 Transportstios Hwy: 1`5, t-8. 1-15: Air. - Pasadena Airport; Port: Los Angeles Port. Air.John Wayne Special Incendires In partnership
San Diego International; Rail: Atcheson, special Incentives: The Business Assistance with the city's utilities.departments•Community
Topeka. & Santa Fe; Port:Port of San Diego. Officer 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 ctty's employers to.stay in Anaheim in 1992 by offer-
Zone. Contact Lydia Moreno, Enterprise Zone permitting process. Corrlact Mike Wiederkehr, ing rent subsidies• utilities and property tax
Administrator.619-23646005. Business Associate Officer,818-5483155. rebates,low-interest loans,and job training pro-
grams. Contact: Elisa Stipkovich• Community
Development Executive Director, 714.533-
8750.
\ TE�1' BL -ESSES SHMV L P AT THE DOOR.
AND Y���111T N17iE
RIVERSIDE :_ LONG BEACH STOCKTON
Coaft Riverside Cowube Los Angeles Comdr.San Joaquin
Population:238.100 Population:442.100 Population:221.600
Lamest Employees Rohr Industries: Fleetwood Largest Employers: McDonnell Douglas: Long Largest Employers: St. Joseph's Healthcare;
r
Enterprises; The Press Enterpfis_e- Beach Unified School District; City of Long American Savings Bank Del Monte
$12—
Business L icense raic A:$3,238: B:$1.343;C:_. Beach Oi sins License Ta:c :$12500: B:$9,000; C:.
c $1184 Otfiee lease Rates $L45-L75 Medi Business License Tau: A: $2.632; B: $624; C: $2,000 Office lxase Rates$L55-L85 Median
House Price $137,000 Crime:' 8 Education: $377 Office Lease Rates $1.50-2.15 Medan House Price: $107,000 Crime:13 Education
i~$3,857 Trampmtafiac Hwy.U.S.91.60,1`215. House Price: $192,000 Crime- 9 Education: $4,630 TransporFatiom Hwy.1,5.S.R.99,IEO._4
1r. Ontario International; Rail:Union 84,082 Transportation:Hwy.S.R.710,405,9t. 580; Air. Stockton Metro Airport: Rail:union
-10; Ai
Port Long Pacific. Missouri Pacific. Southern Pacifies.
Pacific;Santa Fe. Southern Pacific. Special : 605: Air. Long Beach Airport, LAX;
6nien6rei:The Redevelopment Agency has pro- Beach Port. Spedalineentires Long Beach has Special incentives Stockton has an Enterprise
gams to give financial, planning.and construc- an Enterprise Zone. Contact: Jerry Miller, Zone. Coidact San Joaquin Partnership, 209-
tion assistance in seven redevelopment areas. Business Development Center Manager, 310- 9563380.
- Riverside also has an Enterprise Zone. 570.3822.
Contact: Robert C. Wales, Assistant City'
Manager-Development.909.7825553.- - -
CelifurniH tSu.inrse 25
idea was not so much to exclude the
smaller cities as to focus on those that SANTA ANA BAKERSFIELD
compete most vigorously for businesses.
We divided the list into E%%10vale- Comity.Orange County:Kent
Population:304,900 Population 188,300
goriest the 15 largest cities and 40 next largest Empkgers: Cherry-Textron; ITT Canon; Largest Employers: Mercy Hospital; Shell
largest cities. Clearly, big cities have Micosemi Corp. Exploration&Production; Chevron USA; !
big-city problems and big-city costs, BusinessLicense Tax:A: $6,732; B: $2,167; C: Business liarue Tac A: $3,650: B: $1.650; C:
which are typically more challenging 51,169 Office Lease Rates$1.65 Median House $650 Office Lease Rates: S1.30-1,60 Median
P. $226,000 Crime: 5 Education: $3,846 House Price: $90,000 Crime: 6 Education:
than mid-sized cities. To lump the two Tracspataliec Hwy, 1-5; Air.John Wayne; Port: $3,605 Transportation:Hwy.1-5,S.H.99,58 Air
r
together we fel[would have given the Long Beach. Specht lncerrtirex Santa Ana has an Meadows Field Airport Rail.,Saha Fe, Southern
Zone as well as SBA loans, low•inter- Pacific. Spedal Incentives Bakersfield has an i
latter group a decided edge. - t
To compile our final listing, we 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 within each group by five trade zone, a [oral Private Industry Council that group of economic development officials, was
crucial measures—business license tax, provides job raining 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 Cost of educes- Gottlieb,Economic Development Specialist,714- Wager, Economic Development Director, 805-
6476987. 326.3765.
tion—then averaged these together.
The result: Huntington Beach in
Orange County
emerged as best big city
for business, while _
Lancaster in Los '"' LOS ANGELES
Angeles Count• was
c County:Los Angeles
ranked best mid-sized "Y,. Populatim3,579,600`
vitt. Both have ]ovr busi- :a'; c< .,:;:,• Largest Employers: Occidental Petroleum;
ness taxes—although, r ,;_.a .`^:,: Atlantic Richfield; Unocal Corp.
a Business License Tac A$63,425: B:$7,955: C:
interestingly enough, t - a
r If? $6,353 *(see footnote p.52) Office Lease Rates
no[ the lowest. (Two - � � "
: ,i r... ..-w.h� � $2-$230 Medan Haile Price:$201.000 fkime:
c i[i e s-4th-ranked c - 11 Education: $4,789 Transportation:.Hwy: t-;
Glendale in the top 15 ' - 110,710i 405; Air.LAX Rath Southern Pacific, ;
! 1yX Union Pacific; Port: Los Angeles. Special t
and 2nd-ranked Sunny- `' incentives A Small Business Fund provides gap
vale in the middle a financing, Common Bond provides tax-exempt
cities—have no business financing for commercial and industrial projects;
taxes at all.) Moreover, - there are M Enterprise Zones, a Revitalization
Zone to rebuild areas destroyed
Huntington Beach has ■ nessA Assistance
the flet nten-
the lowest crime rate in Ing programs,and a Business Assistance Cerner.
Contact:Reynold Blight,Communtty Development
its group,and Lancaster Department.213485.2956.
is ranked 10th in crime '�'`�" �•in its category. Both The Pierside Pavilion at top-ranked Hunting on Reach: tow taxes and tow crime.
have low office lease
rates and spend healthy amounts on :
education. Only Huntington Beach
OAKLAND : SAN FRANCISCO
falls short in one measure—housing "' -. :
costs. Its median price tag of$271,000 Co®tr.Alameda - County.San Francisco
Popolatiorn 377,900 : Population:728,700
made it second-highest in itsgroup.
g Laiged Employers Safeway Stores Inc' Kaiser Largest Employers Chevron Corp.: BankAmerica
In general, this pattern—low busi- Permanente; American President Cos: ' Corp.; Pacific Telesis t
ness taxes, low crime rates, low real i3®e ",Pn-eTaA $60,000; 8:$12,000; C:. Ltusmess LLtmse Tac A. $150,000; 5:$30,000;
estate prices, and high expenditures s '� Office lease Raimo$1.60-2.35 Mian C: $3,000 Office Lease Rates: $1.65-2.00
House Price$191,000'Crime 15 Edoeatlorr._'r- Median House Price: $265,000 Crime: 30 ,
on education—dictated which cities ,'$4583•Tiareporfatlore Hwy,M. 1680,1-980;} ;' Education $4,362 Transportation: Hwy:U.S.
ranked at the top of their categories. 880,.S.R. 24; Air. Oakland Intemational;.-Raft: 101, 1-80. 1-280: Air.,SFO; Rail: Santa Fe,
Southern Pacific, Union Pacific,Santa Fe:Port:- Southern Pacific; Port:San Francisco. SpecialOakl '
Conversely, cines With the opposite -
pattern—high business taxes, high Small business incu IncetiresSan Francisco has anEnterprise Zone. I
bamr;HUD loan program;financial,technical,and The city also works with companies on a caseby
crime rates, high real estate rices,and I
g Pslcc-beatton assistance for Coliseum Commence -t case basis to help them locate development
less spending on education—scored ,CerLter,Cornrmercial Reh*Iltadon Loan Program; -sites and speed up the permit process.
near the bottom.Among big cities,San and Revolving Loan-Fund: Contact Leonard_ Contact: Ron Blatman, Director of Business
Francisco ranked last, while Berkeley Green;Pubiie Information Officer, Offce'of. Development 4155546478 {
was 40th in the middle cities. In both Economic Development and Employment, 510 1
23133526::• _
Continuer[on Page 50
26 April 1993 .
_
LANCASTER ;Y SANTA CLARIiA
County:Los Angeles r Caunb Los AngelesTHE
-
Population:104.700 Papulatiwc 121,600
largest Employers Edwards Air Force Base; Air Laigest Employers Siic Flags Magic Mountain:
Force Plant 42;U.S.Borax&Chemical Co. Henry.Mayo Newhall Memorial;,Hospital_H.R.
Business dame Tax:A: $113; B: $92; C: $51 Textron =
Office Lease Rates: $0.75-1.00 Median House Bowness License Tax: None: Office Lease Rates:
Prke $118,000 Crime 10 Education $4,077 I$L75-1.80 Median House Price-•$203,000
40 BEST Transportation: Hwy:S.R. 14, 138, 58; Ali. ` Ciimc 3 Edoeatiocni;$4,282_TraosporlaHaie Hwy.-
Palmdale Regional Airport; Rail.,Southern Pacific rr:F 5;S.H 14-Air. Burbank tAX-Rail:_Southem
Transportation; Port:Los Angeles Port.Special v..Pacafir,'PorL Port hlueneme. Spmial aowdiires, .
drcecmres For the fiscal year of Jury 1,1993 to -.Santa Clanta_is now assessing its competitive
June 30,1994,thele will be a perjob incentive for i':'iiess.With business'communities and is
MlDnSIZE new businesses bringing atleast 25employees to ? ,d�evelop'ing'indentives: Contact: Michael
Lancaster and Palmdale.Companies,corporate or x.Flavtl'- Marketing and Economic_Development
regional headquarters, and back offices will ' Manager,805259.2489. ,�,
receive$2,000 for each new job. Contact Vern
CITIES
Lawson, Executive Director of the Economic
Development Corporation.1-800.88&7483.
SUNNYVALE f
Here's �cw California's
County:Santa Clara .. ,-
leading m!d-size cornpa- Population:126,500
hies are competing to Largest Employers. Lockheed WesLnghouse
Electric;ESL Inc.
attract and re`ain a strong _ Birs6ie5s LkereseTax:A: $200; B' $30;.C: $20• L' :"��-
•Office Lease.Rater $1.10-1.85,Median Houle =+business base.
Prick$.278,0.00 Crime 4 Education: $4,789
Transportatione Hc4y U.S.101, 1.880, E280: Air.
San Jose International,'SFO; Port: Port of.
Redwood City. Special Incentives:The city actively
courts businesses with its plan called -The
Sunnyvale Advantage,'which includes extremely
low taxes, a job training program, and a speedy
permit process. Cordae- Geri Cross, Economic
Development Manager,408-7347607. $t
On the edge of Silicon Valley, 15th-ranked Fremont offers fast-track permit processing.
IRVINE SANTA CLARA G FULLERTON ._.
Counlr.Orange Courcy.Santa Clara County-Orange
Populab m:.li4,300 Population:94,900 Population:117,400
Largest Employenr Parker Hannifin;,Allergan; ;, Largest Employers IBM/Rolm Systems Division; Largest Employers Hughes Aircraft; Cal State
i Restaurant Errterprises,__ ^„ Intel Corp.;Hewlett-Packard 'Unh ersityFullerton;.Saint Jude Hospital
Business lrceiiseTax A 51358 B $263 C 568 _: Business License Tax:A$500; B: $380;C $90 � Business License Tess A.$3,035; B: $1,035;C:
Office tease Rates` W5-190 Median House Office Lease Rates $1.70-2.05 Median House ;.•$430 Office Lease Rates $1.30-1'45 Median
: $2
Primo$281,000 Cranc,7 Education: $4,066 ('rice 32,000 Crime 17 Education $4,305 HoukPrice: $209,000 Crime:25 Education:
l'„Tronsportatioa: Hivy.1:405 Air John Wayne`? Trmaportadoru Hwy.U.S. 101. 1.280, 1580 Air 54,703 Transportation Hwy.1-91; 1.5, S.H. 57,
Airo& Special Incentives None. Coideet Jacquie; San Jose International;.Rail:Southern Pacific ' 22 Air.John Wayne Airport,LAX;,Rail Santa Fe,
a Elhs E:4milve Vice President,Irvine Chamber or Special Incentives The city has fast-track permitUnion Pacific, Southern Pacific; Port: Los
Commerce,7146649112 - ting.'and assigns a coordinator to assist on car r;Angeles•Long Beach Harbois. Special Incectires
tain projects throughout the permit process. There are redevelopment incentives mostly for
Contac Ron Garratt, Assistant City Manager, _propertyowners,but larger businesses can usu
408-9843102. ::; ally:negotiate a deal. Contac:Gary Chalupsky,
=Director of Redevelopment, Economic Develop.
_ = meat,714-7388877.
VALLEJO NORWALK ESCONDIDO
County:Solano County.Los_Angeles Courtly.San Diego
Population:114,800 Population:95,700 i Poputatiom 112,900 ,
Largest Employers: Kaiser Permanente; Marine Largest Empfoyets: Bechtel Corp.; Montgomery Largest Employers: Nordstrom; Schuff Steel
World Africa USA;Crestwood Hospitals Ward;Sears Outlet Company;Escondido Times-Advocate c
Business License Tax:A: $3,162; B: $1.140; C: Business License Tax:Ar$6,808; B: $1,408; C: , Business License Talc k $5,055; B: $1,595; C:
$424 Office Lease Rates: $1.00-1.40 Median $197 Office Lease Rates: $0.90-2.50 Median $245 Office Lease Rates: $1.20-1.50 Median
House Price: $152,000 Crime: 34 Education: House Price,,$159,000 Crime: 12. Education:. House Price: $168,000 Crime: 33 Education: f
$3,975 Trrnsportatimc Hwy.:ISO,1-780,S.R.29, ;'$4,015 Traisportation:Hwy,405,91;'605';'5;Ail' % $3,964 Transportation: Hwy:S.H. 78, 1-15; Air. t
37;Air Oakland International,SFO;Port:Oakland, Long Beach,.John Wayne. LAX; Port San Piedro,.'j. Palomar Airport. Special Incentives: Escondido +
Richmond, Sacramento,San- Francisco. Special ` Long Bearh._Special Incentives:There are no stag-' has an Enterprise Zone, an Office of Permit
Incentives Recently enacted incentives include city dard incentives,,buf deals can be negotiated . Assistance that gives guidance and speeds up
contributions towards public infrastructure costs, 5 through City Hell.-Contact Dick Bass, Executive" permit processing, and a downtown Facade
city contributions to district benefits cost, public- Director,Chamber of Commerce,3105647785.- Improvement Program that offers rebates for
private joint venture partnerships,and sale of land architectural assistance, signs, and facade-
at below market value. Contact Craig Whittom, improvement construction. Contact: Roff
Director, Economic Development Division, 707- Gunnarson. Economic Development Director,
6484444. 619.7414844.
EL MONTE
County:Los Angeles
Populnu m 109,800
Largest Employers: Marshall Industries; Wells
Fargo;Crown City Plating
Business License Tax:A: $7,945; B: $1,945; C:
A New Parmership $2,125 Office Lease Rates: $0.85-1.45 Median
House Price:$159.000 Crime: 1S-Education:
$4,127 Transportation:Hwy.M.4210,S.H.10;
Leica Inc.and McBain -Air:l7 Monte Airport Pore Los Angeles. Special
Instruments Join forces Incentives None. Contact Ellen Dixon, Executive
McBain Instruments of Chatsworth. Director,0 Monte Chamber of Commerce, BiB-
Uifomia has been named exclusive 443-0180.
regional dealer in southern California
by Leica Inc.
Leica.a worldwide manufacturer
of instumenu for vision.measure-
ment and analysis of microstructures.
cites McBain-s 28-year record of
service excellence to the microscoPy.
microtomy and scientific instruments
industry.
The extensive Leica product range
and new products on the horizon COSTA MESA
significantly
md3Ain insmumEnrs expand McBain's County.Orange
capabilities. Population:98,500
9601 Variel Avenue McBain is now the leading provider largest Employers Coast Community College;
Chatsworth,CA 91311-4914 of products and services to the District Fairview Development Center; State
1818)998-2702 1
Fax 1618)718.0363 scientific,biomedical and industrial Farm Insurance
communities of southern California. Business License Tare A.$200;B:$200;C:$200 G
Office Lease Rates: $0.95-2.35 Median House
Pt $232.000 Crimes 37 Education: $4,549
Transportation:Hwy.4405,SR.55, 73;Air.John
Leica Inc. Wayne Airport;Pot Long Beach Harbor/Port of
!fencer Lte . Los Angeles. Special Incentives: None.
Deerfield.!/!trots is 6W 75
(8001748.0123a Contact Ed Fawcett, Executive Director of the
Fax 17081403.0030 Chamber,714574-8780.
28 April 1993
HAYWARD Richard Petrick&. sociates,
4s
• _ _ Kn , - $ - is an experienced employee bene-
Couni4cAlameda - fit planning firm, dedicated to
:_Populatimc 158,200"' providing education and training
Largest Employers:.Mervyn's.Co�p.:kiisei to its clients to keep them current
Permanente;Cal State University is ' and in compliance with the
i Bus:aess"cause Tin.A: $133; B: $2,698:Ci*
.. changing emplo)•ee benefit laws.
` $1,197 office tease Rats$1:.35-150•MrdanCall now to attend one of our
Nouse Puce:$179,000_Crime:28_E4o4tioiiivz.. Benefitfree educational seminars.
$3,915 Transportetime Hwy}580;N580;8.H
:. 92,S.A.238;Air.Oaldand Airport;7 miles;Ra7:,:.
Santa Fe/Southem Pacific;Union Pacific;Port ' withoutcreating " " ' Richard Petrick c^associates
Oakland Port,'15 miles; Special lEceafi�es:Z employee a
Hayward has a loan program for small business-. bcos �� consuming 241 California Street Swte 11I
es thaf'create new jobs in the city and.cffeis San Francisco,CA, 94111
incentives on a easebycase.basis to b�sinelses'- Te]415.249.4600 Far 415.249.4609
that are looking fo ielocate.to the city's
Redevelopmem Area Contact Sylvia Elin:rtrthal;
-Director of Community&Economic Development,
510-293-5345.. -
For more information on products or services
contained in this issue, see
CHULA VISTA gratITIcation
County:San Diego
Population instant141.800
Larged Employers: Rohr Inc.; American Fashion
Inc.;Price Club On page 54
Business"cense Tax:A: $2,912; B: $540; C:
$117 Office Lease Rates: $1.10-1.50 Median
House Price: $173.000 Crime: 32 Education
$3.661 Transportation: Hwy. 1-5, 805; Air. San
Diego County International Airport;Rail:Santa Fe
and Southern Pacific; Port: National City, San
Diego. Special incerdives None. Contact Cheryl ■ ■ ■ ■ ■ ■ ■ ■
Dye. Economic Development Manager,619-691-
5047.
196915047.
cn a e
Why Aren't You Here?
- he best com- successful business. town area. 700,000
I_ _ BURBANKTpanilocated
ies have Retailers have con- of the residents in
County:Los Angeles their tinually reported this area are between
g headquarters in N record sales at their the ages of 25-44.
Populatiorc96.800 Glendale for a ver• Glendale stores, due Providing a larger
Largest,Employers:,Warner Bros./Burbank. + largely to the ideal profit margin for the
Studios:Waft Disney Co:SL'Joseph's,Medicad-;', good reason. \lith g y P g
t "" :°:•'• := nearly 5 million location. Over 2 mil- retailer, Glendale
j il"essLieense.TacA: $1,711]8t'$342;_C:.- square feet of prime lion potential cus- has no business
1 ;_$135.Office I"Ratrs$L20-2:7SMeelanf' office development tomers, with com- license tax, city
Nouse Price $225,600'crime 8'Edoeattoo: . and 1 million skilled bined incomes income or gross
$3,854 Transporfatimr. Hwy:F5, S.R1134 A_1_ workers within a 15 exceeding $32 mil- receipts tax. With
Burbank-Glendale-Pasadena Airport:_Porr los': mile radius, Glendale lion annually, reside advantaees such as
Angeles: Special Incentives The`city has pro, within a 10 mile these, u•hy aren't
offers what you
posed an Economic Incentive Zone program;::
made up of.redevelo redevelopment need to operate a radius of the down- you here.
p agency incentives�.
and oily incentives.include tai rebates,low;iritei
est -loans,' and _ permiYr:.fasi-fracking:_ For additional information, contact the
Crab Robert Tague, C.ommmity Development= Glendale Redevelopment Agency
Director,81s953-9774_ : . (818) 548-2005
Tum to page 50 for more city l stings
Conlinurel from page 26
cities•companies have long complained FREMONT RANCHO CUCAMONGA
about high taxes and onerous bureau-
cratic rules that contribute to their County:Alameda County:San Bernardino
Population 177.500 Population:110,500 _
cities' generally inhospitable" business Largest Employers: NUMMI car plant: Fremont Largest Employers: General Dynamics:Ameron
climates.Indeed,both cities have cntsh- Unified Schools;Everex Steel&Wire/Pipe;Frito-Lay Inc.
ing business taxes.In San Francisco,our Business License Tax:A: $6,030; B: $2.530; C: Business License Tare A: $5,205; B: $1,613; C:
hypothetical manufacturer would pay $1.330 Office Lease Rates $1.20-1.30 Median $413.Office Lease Rates $1.45-1.95 Median
House Price: $238,000 Crime: 5 Education: House Price: $140,000 Crime: 1]. Education:
S150,000 a year. 518,000 more than in $4.060 Transportation:Hwy.,MO.680 Air.SFO: $3,759 Transpirtation: Hwy: 1-10, 145:Air. -
Fresno and more than double the rate Port:San Francisco. Special Incentives The city Ontario international; Rail:Santa Fe; Poe Los.
in Los Angeles. Berkeley's tax rates are has a development agreement that eliminates ''Angeles:,Long.Beach. Special InceMiresc
comparable to big city rates; indeed, many fees in the Ardenwood area, coordinates IncenUves are now being planned. 66d Rent
they topped all but those of four Cities. project teams for the larger developmenprojects. Crowley, Chamber Economic Redevelopment -
PP and has fast track permit processing. . Staff,909.987-1012.
To be sure, like any ranking, the cri- Contact Pact James,Administrative Analyst,510•
teria for our 55-cin• list are arguably 4944462•
arbitrar .There are man•intangibles of
a given communis-that cannot be mea-
sured,but that may be extremely impor-
tant to a particular
company residing
there. Ambience, _
quality of life, natural DOWNEY
a n d cultural County:Los Angeles
resources, and man• Population:92.600
other factors can - Largest Employers: Rock%vell International: L.A.
affect customers, �..�. _ _ County;Stonewood Shopping Center Mall -
Business License Tar A: 58.968; B: $2.558: C:
workers, vendors, � A. $161 Office Lease Rates: 50.80-1.50 Median
and management, r y_ House Price: $207.000 Crime: 9 Education: - \
and be critical to ver- 53.578 Transportation: Hwy: 1.5, 1-710, 1.605;
;t r 'v • Air: Long Beach Airport. LAX; Rail: Southern
tain rapes of business.
But we're going for '\ Pacific Transportation:Port: .A.Long Beach and L
.a Harbor.Special Incentives Deals can be negotiat-
batting average here. _ ed for larger businesses. Recently, the city
And in chat Context. agreed to give Penske Toyota 5400.000 toward
the parameters we —1 improvements and 5100,000 a year for five
years in return for a commitment from the deal-
ership to remain in the city for five years.
the health of local - -._ = Conlaet Art Rangel, Director of Community and
businesses. Another - Economic Development 310904-7285.
set of important fac-
tors not directhv 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.Manv are described briefly in POMONA FONTANA
the listings. County:Los Angeles County:San Bernardino
\Ve should mention that 13 cities on Population:135.500 Population:97,'500 _
our list have Enterprise Zones within Largest Employers: Hughes Aircraft: Pomona Largest Employ"'Kauser Hospital & Medical
their boundaries. These zones, desig- Valley Hospital: California State Polytechnic Group;California Steel Industries; Southern
Hated by the State of California, offer University Pacific Railroads
tax breaksto businesses operating Business License Tax: A: $515; B: $2,660; C: IiusinessLiceniiTa>c_A: $15,052;8: $2,572:C:,
$1.204 Office Lease Rates 51.10-1.65 Median , $1,635 Office Lease Refer$0.75.-2-20 Median;-
there, including hiring tax credits, House Price: $132.000 Crime: 29 Education: I- (louse Price: $124,000. Crime:.31 Education:
sales-tax and use-tax credits for $3.815 Transportation Hwy:60, 10; Air. Ontario $3,789 Transportation: Hwy:1-75,_1-10 AG
machinery and equipment purchased
International. John Wayne, LAX; Rail: Southern Ontario International; Rail:Sarrta Fe, Southem
Pacific. Union Pacific, Santa Fe: Port: Los ' Pacific..Union'Pacific. Special Inceill!vesThe city
for use in the zone, net operating loss Angeles. Special Incentives: None specified. offers fnanciaf incentives on a ease-by-case-.- ;
carryovers, and business expense Contact: H. S. 'Biff- Byrum, Chief Executive basis. Contact Byron Steinbaughfc, Econoin
_1
deductions. Most also offer local Officer. Pomona Economic Development Corp.. Deve_Iopment0'Nsion,909350.7605_�''
Enterprise Zone incentives which may 714622-1256.
include low-interest loans, permit fast-
tracking.job training, and site selec-
tion assistance.:3.
50 April 1993
j
i
MODESTO GARDEN GROVE -' ,_THOUSAND.OAKS
--
Co®ty^Stanislaus County.Orange Coun(ye Verrfura -
Populatioa:174,200
POPULISM:148,100 Populatiorc106.600-
r
i _Largest Employers.Tii Valley Growers E &J ' Largest Employers: Garden Grove Medical Largest lmployers GTE'Caldomia; Amgen Inc.,
Gallo Winery Gallo Glass Co _ Center;Pilkington Industries;ALPS Mfg. State Faun Insurance
'Boniness License Tax:A: $100; 8: $5,200; C: f Business License Tax;A: $2,991; B: $2,229; C: _ Biuiness License Toa Ac $4,670; B: $1,470; C:
F •v
$2,200 Offux Lease Hates:$1.25-L65-Median $1,152 Office Lease Rates: $1.00-1.30 Median $350 O- 'tease $0.90-2.00 Median.
:Haase Price:$115,000.Crime:21,Education:, House Price: $182,000 Crime: 24 Education House Pries $348,000,Crime:•1_ Education:.
$3937 Transportation:Hwy S.R.99 108 and $3,904 Transportation Hwr.1-5,1-405,1.605 Air '$3,913 Transportation Hwy: U.S 101 Air''
h 137 FS Aic Modesto CltyLounty-Airport Rail:. John Wayne Airport; Rail:Atcheson, Topeka & Oxnard Airport, PorE Port Hueneme Special
Santa
Fe',Southern Pacific Union Pacific-Port-` Santa Fe, Southern Parc, Union Pacific; Port LucnrBres late city offers commercial rehabil"Ra
i,5Stocldon:,Special[ The sty grants a nice Long Beach Harbor. Special Inwrtires Job tram Lon grants to help businesses comply with the
time tax ezempbon for lafior intensive businesses t ing programs and relocation assistance and can `'American Disabilities Act,and sponsors a mentor
Those that employ 15 or more persons per uric help large businesses relocate quickly by putting program where business people can get in_torr
get reimbursed 100 percent for water connection, them on the fast track permit system,and acting _tact with others in. their line of work.
6u7dmg and plant fees;those that employ seven as a liaison for the business with other govern- Coniact_Stacy Pads,City_ Manager's Office,800
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,209.577.5473. 5120.
MORENO VALLEY VENTURA _ CONCORD
Comity:Riverside County.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: $24,440; B: $1,830;C: Medical Clinic- Business License Tax:A: $2,015; B: $5,226; C:
$214 Office Lease Rates: $1.15-1.55 Median Business License Taxi-A: $9,395; B: 5695;-C: $954 Office Lease Rates $1.37 Median House
House Price: $125,000 Crime: 30 Education: $385 Office Lease Rates $1.204.65 Median' Price: $178,000 Crime: 19 Education $3,793
$3,834 Transportation: Hwy. 1-215. S.R. 60;Air. House Price: $189,000 Crime: 14 Education:-. Trarspoitatiore Hwy. MO,S.R. 242,24,4 Air.
Ontario International; 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 cre- 118, 126; Air. Oxnard Airport; Rail:Southern Incentives: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 forth of land writedowns or public improve-
Economic/Redevelopment Director, 714243- velopment Administrator,8056547833. ments. Contact: Bill Reeds, Economic
3460' Development Director,510£71-3355.
SALINAS OXNARD / 'ONTARIO
Coin.Monterey County:Ventura County:San Bernardino "
Population 112,900 Population 146,400 POPULISM 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
Bimrnss ISrsnse Tax:'A:i35,010; B:$7,010;C Business License Tax:A $2,175; B: $6,123 C y Business Lieu Tai:A $10,050; B: $2,050; C:
$420,Office Lease Rates $125 Median Nasse $1.062 Office Lease Rales $y40-1.85 Median ! $600 Office Lease Rates$L35=L65 Median
Prise{$160,000 Crime: 23 Education: House Price: $176,000 Crime:22 Education: Hoose Price $135,000 Crime 35 Education. "
53,90.4 Tmrsporiatiorc Hwy:U.S. 101, S.R.68, $4,085 Transportation Hwy. 101, S.H. 1, 34, $3873 Traraportatiore Hwy 1-10,.1-15,S.R 60,
183; Air. Salinas Munfcipat Airport; Rail:. 232; Air. Oxnard Airport has service to SFO and 83"Air. Ontario International; Rail:Santa Fe,
Southern Pacific. Special'Incentives:The city LAX; Rail.,Southern Pacific; PortPort Hueneme, Southern Pacific,Union Pacific.Special iocerdires
afters an Industrial Development Bond and tax- Channel Islands Harbor. Special Incentives The :. There are foul 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,408758-720L _ force that reviews new projects and warns of also include a Small Business Assistance Center.
potential problems,and a revolving loan program There is tax increment financing, and the
that provides gap-financing for existing business Industrial Development A
uthoriry can issue up to
es. Contact Steve Kinney, Economic Deve- $SO million in bonds to support job-providing pro-
Iopment Director,805-385-7455. jects. Contact Norman Priest, Community
Economic Development Director,714.986.1151.
{
C:diroi ilia Bu,ilw 51
SANTA ROSA ' RICHMOND
Research for"55 Best Places"was compiled by -
County:Sonoma County:Contra Costa
>[Z Croup. a leading research and database ` Population 120,200 Population 92,600
company affiliated with Califamia Busititw map 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.
90,000 in population, based on official esti- Business License Tax A:$17,016; B: $3,416;C: . Business License Tax:A. $12,460; B: $2.240; C:
mates from the California Department of z$1.638 Office Lease Rales $1.00-1.40 Median $420 Office Lease Rates: $1.55-1.65 Median
L Hotise Pricc: $182,000 Crime: 16 Education "i House Price: $141,000 Crime: 39 Education:
Finance,Demographic Research Unit. $3,937_TiaraporlaNmm Hwy. 101: S.H. 12 Air.' .j $3,885 Transportation Hwy.M.1-580,101:Air.
Largest Employers are generally non oov_ -:Sonoma County Airport has commuter flights to;=; Oakland International Rail: Southern Pacific,
SFO-,RailNorthwestern Pacific Port:Petaluma Santa Fe; Port:Richmond. Special Incentives:
ernment employers, and exclude city and River_Special incentives:The city.offers no set _. Richmond has an Enterprise Zone, as well as
count•administration.and school systems. mcertbves:,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 was pro- Contact: Alan Helfen, Chamber Economic redevelopment process in nine areas.The local
sided by each cin, and calculated for three Development Director,707.545.1414. Private industry Council offers skills training pro-
hypothetical businesses: (A) a mature high- grams as well as an employable work force refer-
technology manufacturing company with S50 ral system. Contact: Barbara Obele. Office
Manager,Chamber of Commerce,510.2343512.
million in gross annual receipts and a payroll of .. I
S20 million;(B)a retail operation with S10 mil-
lion in gross receipts and a payroll of$3 mil-
lion:and (C) a small accounting office with Sl
million in gross receipts.5450.000 in payroll,
and 10 employees (eight professionals and two --_ DALY CITY _ SAN BERNARDINO-
.support st.•tff). Tax rates listed here are not County:San Mateo Count):San Bernardino
meant to be reprnenc:tive of all industry.but Population:96,700 Population 175,800
to apply only to these hypothetical company Largest Employers Seton Medical Center: Cow Largest Employers Norton Air Force Base;Stater
profiles, devistd solely for the purpose of pro- Palace;Macy's Bros.Markets;San Bernadine Medical Center
Business License Tax:A: $25,401: B: $5,401;C: Burnes License Tax:A $12,500 B: $7,548: C:
Aiding a means of comparison.Readers are cau- $750 Office Lease Rates: $1.45-1.60 Median $2,537 Office Lease Rates: $1.25-1.65 Medan
tioned that actual nixes may%-an-according to House Price: $241.000 Crime: 6 Education: House Price:$99,000 Crime: 38 ldueation -
company size.revenue structure,industry npe. $4,977 Transporlation:Hwy.1-280,S.R.35,Hwy $4,073_Transportation Hwy.1-10,415,1.21.5;Air. . _
etc. Readers are urged to call city tax depart- 82; Air San Francisco International; Rail: Ontario_Intemational;'Raih. Santa Fe, Union I
men s or economic development departments Southern Pacific; Port: San Francisco Port. Pacific.SpecialhicertliresThe eirywill develop eus-_
Special Incentives The city sponsors six free work- tom incentives for larger businesses. Recertify,
for complete tax information. shops a year on business strategies and finan- Inland Beverage Co.considered leaving the area
*Norr: Los Angeles business tax figures shown tial advice from consultants and representatives for a larger facility.San Bernardino purchased the
of government agencies. The Small Business existing building and provided a low-imeresi loan
here apply only to businesses that operate com- Center offers free counseling and technical so Inland could buy a new building in the city.
pletely i6thin cin'boundaries. assistance to small businesses.Contact Daniel Contact Susan Morales,Assistant to the Agency !
Schorr, Economic Development Coordinator. Administrator for the City of San Bernardino
Office Space Lease Rates were provided by 415-991-8034. Economic Development Agency,909384.5302
city economic development departments,
chambers of commerce.and local real estate
brokers. Prices per square foot are for Class A
office space, calculated on a monthh basis '_
(cities with no Class A office space supplied J INGLEWOOD BERKELEY ,
figures for -B+- office space).Actual prices T- _ 1
CimW.Los Angeles.. ._' County:Alameda
in the marketplace mac van'. =
Population 104 200 I
Pop`nlation:112.500 ' ._.
Median House Prices were provided by
':Largest-Employers TRW Systems; Northrop` Largest Employers:Afta Bates, Herrick Hospital;
Dataquick Inc., a real estate research firm
Cor'p.;,Rockvrell International.•'•:,''- 7E � - Miles/Cutter Biological;Kaiser Permanente
Business lit uYrse Tax A:$55,000;B:$10,802;C: ? &tsmes Licersa Ta=A $60,000(value added);
based in La Jolla. Figures here are median = $1,630 Offer Lease Rates$1.00-1.25 Median r B: $12.000; C: $3.600 Office Lease Rates:
_ «
prices as of the fourth quarter of 1992. F Hoare Price: $169,000"Crime: 36 Educationg' $1.50-2.00 Median House Price: $209,000
F_$3.809 Tran`sportatimar.Hwy_1-405;-Air: Los-,j Crime:40 Education $5,859 Transportation:
Crime ranking is based on FBI figures for rjgre�pirrport:Ra):Santa Fe;Port:Port_of Los•'=3 Hwy:1-80,1-580,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
bus
ulation. -irtesses likely to generate high sales-tax rev--"a Incentives: Low-interest loans are available to
enues for the city(for example a ixr dealership) businesses that relocate in South Berkeley.The
Education information was provided by the tiy,uslrtgthe power of eminent domairi io acquire i city shares a Recycling Market Zone with
California Department of Education,School ' land parcels for 1 hbm,;Cmrtast Jess6.Lewis:_, Oakland,offering various incentives to business-
_ ._
Business Senices Division,for 1991-92 fiscal -RedevelopmerttDirector,_310125290.;_: es that use recycled materials. Contact:Will t .
Lambert. Business Development Coordinator,
year, based on cost per average daily atten- 510644 b309.
dance;in a few cases,the average for several _.
school sstems within one city was used.
32 April 1993 :•~
'y
-�•• Vis-- _--�---,.•�.n�� � --_.. ._ ,- - �—•- -
� r �b Ji <
EANSIDEr + �L WEST COVINA �.SIMI VALLEY
r San Counb=Los Angeles Coin Ventura
P*re 138,5009 °" r` a ! Population:97,300 -.. Population 101.800
tamest EmPbl ?> iry Medical CenternAstee Largest Employers Queen of the Valley Nosjpital CLaiEest Employers Farmers Insurance Group;,
America,Deutsch Co ; San Gabriel Daily Tribune: Broadway Depart L Simr Valley Hospital,and Health Care First
1, Biistailefs ii a Tk A $25 075-B.$5,075:C; ment Store Interstate Ban_card
j $Si> yOHioe�Le_ase 60;92;$00 75-1.35 Medan Easiness License Tac A $5.430:B: $1.133 C �
Buess Liven a Tac A$19152. B: $4152. C:
r:House AiUce':,5157 OOD Crone•18 Education I $279 0(fia a Lease Rates $L10-2.15 Medan' 3277. Office Lease Rates: SL35=L70 Mediau .
> 67 �as
0 parlatiox Hwy 1-5 S H �76 78- Nouse Price: $187,000 Crime 26 Education: �use Price:$i93,0100 Cnme.2•Education
Sojme.Nrp Rail:SaFe Port San T $3,749 Transportation:Hwy 110 S H 39 Air.,-4 $3899:Transportation:Hivy S.H.Li18 Atr LAX
Contact Elizabeth Graff Developmerrt Serncesr`, Ontario Airport LAX Port Long Beach Spemal `Rar/ Southein Paafir Pori Port Hueneme
Coordinator 619A66.4Z02 + i .Incentives The Redevelopment Agency offers low Spxial Irreantires The city provides arnegoba[ed
,.' »�'F', �, $ "r .r�;e�M interest loans to help with building improvements of taxes for assistance for certain
^vwj
Contact Kristin Howland, Director of.PublicPs assembles project-learns to'assm apps
u- J
. Relations&Membership,81&3388496 urns a progiam designed to reduce paperwork
k SEwer and water hookup deferred payRiCmL plans.
sr and a SmaII, Bus and Office.
'; f Commit 1
Nancy Bender, Executive Director of the_ .
Charnber.805626-390D. .
` TORRANCE - i :PASADENA. ORANGE
^Counq:Los Angeles Commie Los Angeles r ' Comdr.Orange
I
Population:133,900 Population:.133.500-_ . . .-'�,..... .._ .,:.: '".
Population:114.500
Largest Employers: AiResearch; Toyota Motor :: Largest Emptojirs:•Jet Propulsion Laborato ,: Largest Employers: St. Joseph Hospital; UCI
Y P_ ....,.. !Yrr
Sales;Hughes Aircraft " California Institute of Tech.; Huntington' Medical Center Van's Inc.
Badness License Tac A $17,738; B:$3,138; C: Memorial Hospital r= Business Lrrnse Tax:k 529.940; B: 56,055:C:
$538 Office Lease.Rallm, $1.40.1.50 Median : Budness Ucerrse Tate A $8695 8 $1563,C.s- $540 Office Lease Rates $0.95-1.75 Median
House Price: $273.000 Crime: 13 Education: $1.211;,Office Lease Rates 51.00-250IffiWN
, " House Price: $238.000 Crime: 20 Education:
$4,020 Transportation:Hwy.S.R.55.57,22 Air.
$3,728 Transportartime Hwy. 4110 Air.Torrance .House Priced$320;000 Crime:. Edueatmn p
Municipal Airport, LAX; Rail:Santa Fe, Southern ;: S4,314 T'arosiliortaft Hwy..U_.S.;134 2100;SH
. .4- John Wayne; Port:Long Beach Harbor/Port of
Pacific. Special Inaxntives None. Contact Albert 110; Air: LAX;`Por 'Los Angeles Special`s Los Angeles. Special Incentives: Special deals
Ng,Assistant City Manager,310-618-5880.
-inceritires Pasadena has an Enterprise_Zone:.' can be worked out.depending on the size of the
Contact Ken Jackson, Enterprise Zone Manager,e business. Contact Victoria Cleary, Assistant
818-798-675L Project Manager for Economic Development
Department,714.771-2315.
f1
1 fyou have a business,
I Iwe have the place. . . ' " ' It ' all
ti For assistance with
f.
k s • Site selection • Financing
T r • Permits • Demographics
its Ciw
Eco of VallejoFmnomic Dc•�•elopmentDepartmentClara Sr.
Vallejo,u 93590 (707)648-4444
Calilmnia Buainv, 53
..,cETtNG AGENDA
DATE ITEM#._,®
�
San Luis Obispo Chamber of Commerce
1039 Chorro Street • San Luis Obispo, California 93401-3278 COPIESTO:
(805) 781-2777 • FAX (805) 543-1255 ❑'DQ Awn ❑ FYI
David E. Garth, Executive Director d comc;j ,,/ t
s0 CDD DIR
�Vy�CAO fi� FIN.DIR.
L* ACA0 ❑ FIRE aim-F
ATTO.T-JEY EJ FW DIR.
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April 22, 1993
RE Gh1VhL)
Honorable Mayor and City Council Members APR 2 3 1993CITY COUNCIL
City of San Luis Obispo SAN LUIS osisPO, CA
P.O. Box 8100
San Luis Obispo, CA 93401-8100
Dear Mayor and Council Members:
We respectfully request that you postpone the hearing on Transportation Impact Fees
scheduled for April 27.
Our task force is working diligently on this issue. Their findings will provide you with
valuable information related to these fees. Our hope is that you postpone the hearing for 30
days in order for the task force to complete their study.
Thank you for your consideration in this matter.
Sincerely,
cs `
Charlie Fruit
President
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April 6 1993 DID
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Hon. Mayor and Members of the San Luis Obispo City Council
City of San Luis Obispo
990 Palm Street
San Luis Obispo, California 93403 In,P R j J J�
CITY CC•J'JC:L
Re: Transportation Development Impact Fees Currently Under Review SAN urs OF;Ysrc,
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.
I 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 or in 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 CONSEQUENCES
EXECUTIVE SUMMARY PUBLISHED BY THE NATIONAL ASSOCIATION OF INDUSTRIAL
OFFICE PARKS COPYRIGHT 1991
A RATIONALES FOR IMPACT FEES
Local governments often justify impact fees on the grounds that they more
equitably divide responsibilities for infrastructure expansion between existing and
incoming residents. Impact fees are based on the principle that those who benefit
from the use of certain public facilities should pay for their construction.
w.
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 EQUfTY RATiONALES FOR IMPACT FEES
1. New development is not necessarily the Qrlmaty cause of demand for infrastructure
gxpan�Lon. 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 (ULl) concludes that "even with no new development, traffic
would increase due to the population's growing mobility."
2. Growth often payer 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 suW/us
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. Dela "in impact fee-financed construction can violate the financing prjnci21es
upon which-impac 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
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.
S. impact fees ma�rgduce 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 economice�rspective: 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
5% 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.'3 First, impact fee receipts depend on levels of
development.` Construction is highly sensitive to economic cycles, and thereby
likely to vary widely.'s 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 17 In the-long terms, the forecasted effects of San Diego's
proposed citywide fees and an equivalent properly 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. o 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 aroductivitX; 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 "empirical
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 imQact fees
distribute OyMent resizLnsibilities less equitably than ag=ray taxes In the c=
r.un then can conceivably have more 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 increaser`
3. Effects on�em&omen - 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 imQact fees so
localities mi he ht M?�&ct employment in the real estate industry and services to
decrease.
As oonstruction 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 thata 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 focality forsakes_ un_to_ 1.000
potential lobs.
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 8
April 6, 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 per
Oplta income by 2% in 1993.3° The Coopers and Lybrand report reaches similar
sonclusions.'1
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 not consider alternate financing mechanismsrip or to
implementing impact fees, courts are less likely to validate contested fee p Qgrams.
impact fees may not be the most appropriate financing mechanism for all public .
facilitles; 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 cefain_pubiic facilities. User charges are most appropriate
when a community chooses to allocate financial responsibility for infrastructure
coon those who most benefit from its provision!" or to encourage conservation.
Other financing options growing in popularity include "special assessments"and
"special districts" 'Tax 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. Finally. local
governments can opt to „privatize certain oublic servlcesN Almost 316A of all cities
contracted out a number of services to the private sector between 1990-91'3"
r
Page 7
April 6, 103
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 focal municipal services and
infrastructure costs..
Non-residential development including commercial/industrial and retail 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
Page 8
April 6, 1993
Executive Summary Notes
1. Snyder and Stegman, "Paying for Growth", Chapter 4
2. Alan Altshuler, Jose Gomez-lbanez, 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 Home 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, D.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
Aprii 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
1, 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 Wasylenko 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 a/., 'The Impacts 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. 77-18.
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 1991n, p. 24.