Santa Monica City Hall may generate between $50 million and $60 million within the next 20 years to help the City achieve its ambitious transportation goals.
Council members unanimously approved on Tuesday evening a transportation impact fee (TIF) to be applied to developers who build with Santa Monica’s borders.
The potential infusion of cash from the TIF would help offset some of the $134 million City Hall expects to spend on building a better transportation infrastructure in Santa Monica.
“The purpose of the Multimodal Transportation Impact Fee is to ensure that new development, projected through the year 2030 in the Environmental Impact Report (EIR) for the Land Use and
Circulation Element (LUCE) of the Santa Monica General Plan, pays its fair share of the costs of providing the transportation infrastructure necessary to implement the policies and achieve the goals of the Plan,” Nelson/Nygaard Consulting Associates stated in its Nexus Study submitted to City Hall.
Developers would only be assessed the fee if its proposed land use would increase the amount of auto trips. Just the same, developers “would not be charged if land use changes result in fewer auto trips.”
“The proposed transportation impact fee is intended to capture projects that result in changes from one type of land use category to a land use category with a greater trip generation rate, such as from office to medical office or office to retail,” City staff stated. “Consistent with other impact fees in the Municipal Code, development agreements would not be subject to the ordinance.”
The fee amount collected will vary from project to project and based upon a square foot basis. For non-residential developments, a building permit would not be issued unless the TIF is paid.
According to City staff, Santa Monica plans to spend $33.7 million on bicycle actions, $25 million on pedestrian actions, $6.1 million on Transportation Demand Management actions, $10.2 million on public transit actions, and $11.6 million on “auto network” actions. More than $47 million will be allocated for contingency, design, fees, and project management.
Between 37 and 45 percent of those costs would potentially be covered by the TIF, with the remaining balance funded by regional, state and federal grants and the City General Fund, among other sources.
According to the Nelson/Nygaard Nexus Study, if all the proposed developments in Santa Monica were completed, “it is estimated that the number of PM peak hour vehicle trips generated within the City of Santa Monica would increase from approximately 60,100 existing P.M. peak hour vehicle trips to 64,700 P.M. peak hour vehicle trips.”
However, by collecting the TIF to help fund the transportation infrastructure plans, City Hall hopes Santa Monica would meet the goals of the LUCE and see an estimated net reduction to 59,500 P.M. peak hour trips.
While City Hall hopes the TIF may fund up to 45 percent of future transportation infrastructure plans, there were some who were cautious about the TIF.
In an open letter to Council members submitted to The Mirror in the lead-up to Tuesday’s meeting, the Santa Monica Chamber of Commerce, while in support of the TIF in principal, expressed concern of the fee rates.
“The unprecedented magnitude of the proposed fees, in combination with other City fees (both those in effect and those being studied), would have the unintended consequence of being a barrier to the quality development that the LUCE envisions for a small percentage of Santa Monica land, including projects that would be fiscally beneficial to the City as well as a source of the community benefits envisioned in the LUCE,” the letter stated.
The ordinance still has to pass a second reading before going into effect. If the second reading hurdle is cleared, the TIF ordinance will go into effect 60 days later.
The Nelson/Nygaard next study proposed possible fee rates for developments based upon land use. For residential developments, the TIF could range from $7,600 to $7,800 per dwelling unit for single-family projects and $2,600 to $3,300 per dwelling unit for multi-family units. Retail projects would be assessed either $21 or $31 per square foot, while office developments would be on the hook for $9.70 or $10.80 per square foot.
Medical office developments would be subject to the highest TIF of $28.10 per square foot or $29.80 per square foot. Conversely, hospitals would be assessed a TIF of $14.80 per square foot.
Lodging projects would pay $3.60 per square foot, while industrial developments are nicked for $1.20 or $1.30 per square foot.
The amount assessed depends upon which area a project is located. Developments in Area 1, which includes the downtown and Bergamot Station, would pay the lower rate. The rest of Santa Monica falls within Area 2; developments in Area 2 would pay the higher rate (except for hospitals or hotels/motels).
Nelson/Nygaard estimated these rates could yield a little more than $60 million in fees.
Key infrastructure project included in the $134 million figure include: San Vicente Bikeway ($6 million); Marvin Braude Bike Trail ($4.8 million); Sixth/Seventh Street Bikeway ($8 million); bike detectors ($5.2 million); enhanced pedestrian crossings ($4.3 million); pedestrian network improvements ($19.6 million); bicycle transit centers ($4 million); bike sharing program ($9.6 million); and, Fourth Street Bridge widening ($9.6 million).