Metro considers adding fees to every new home, store or office building to fight congestion
Costs could range up to $1,900 per home or $30,000 for a new retail store
By Steve Scauzillo, Staff Writer
@stevscaz on Twitter
Posted: 05/18/2013 05:31:08 PM PDT
Updated: 05/18/2013 05:33:07 PM PDT
File - Construction workers build new homes in the Rosedale housing project in Azusa on Dec. 10, 2012. A new fee being considered by Metro to fight congestion could add as much as $1,900 to the cost of a new home. (SGVN/Staff file photo by Leo Jarzomb)
Developers in Los Angeles County are bracing themselves for a new layer of congestion fees that would add about $1,900 per new home and about $30,000 on a new Trader Joe's store,
The added fees are being considered as part of a developing Congestion Mitigation Fee Program, 10 years in the making by the county's Metropolitan Transportation Authority or Metro.
After more than 50 businesses signed a letter opposing the measure, the program suddenly was withdrawn from Wednesday's Metro Planning and Programming Committee and placed on hold.
"The Board and their staff felt that it being a complex issue, more time is needed by all to fully understand it. It will probably go back to the Board at a later date," wrote Metro spokesman Rick Jager. Though the May 23 date originally set for board approval also was withdrawn, Jager said the board had not set a new date for consideration.
The program was created in 1990 and was paired with Proposition 111 that raised the state gas tax 9 cents a gallon. The program is required to fund transit projects that will help alleviate traffic congestion caused by new development. If no program is in place, the county and 88 cities are in jeopardy of losing Prop. 111 revenue, about $83 million a year, according to Metro.
Metro had recommended each city charge a minimum fee of $200 per car trip generated by each new development. Under the minimum, Metro estimates
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the fee would generate up to $767 million over 20 years.
Cities have submitted wish lists containing numerous projects, from lane widenings and new freeway on- and off-ramps to traffic signalization to a $60 million grade separation proposed at a train-street intersection in Baldwin Park. If all 1,700 projects submitted by 88 cities were completed, it would cost $5.1 billion, create 60,200 jobs, and reduce the number of hours drivers sit in traffic by between 6 percent and 38 percent over 20 years, according to Metro.
Development fees are nothing new to many cities. Pasadena and Santa Monica, for example, have a sophisticated system for charging developers for roads, traffic signals, bikeways, etc. Some 22 cities in the county already impose transportation mitigation fees, while 66 cities do not, according to Metro.
If the new program was adopted, Metro would work with each city in the county to adopt a separate congestion mitigation fee schedule. Though it's not totally clear, those cities with existing fees could receive credits if the fees are adequate, according to Metro.
Members of the Los Angeles County Business Federation are opposed to the fee plan and opposition is growing. "This is a hot issue," said Judi Erickson, spokeswoman for BizFed who attended Wednesday's hearing, only to hear the matter was tabled without any discussion,
Prior to the meeting, the business group had met with Metro staff and went over the numbers. The group sees it as potentially onerous.
"We are worried about adding a fee, which would drive up costs. And we're not going to see any real change," said Holly Schroeder, chief executive officer of the Building Industry Association Los Angeles-Ventura Chapter and a BizFed member.
Others have criticized the plan, saying it is based on a 1990 law and does not take into account newer laws that reduce congestion and air pollution, such as AB 32, a greenhouse gas reduction plan, and other "smart growth" laws that prioritize developments near rail stations and bus stations to reduce commute times and air emissions.
"A plan that assesses a development and impact fee to fix some streets and build some bike paths seems out of touch," said David Grannis, president and CEO of Point C LLC, a Pasadena company. Grannis is also BizFed's transportation committee chairman.
Metro's report dated May 15 said no matter how many new laws have been passed to deal with new roads, trains, and carpool lanes, Metro is responsible under the 1990 law for developing "a congestion mitigation fee methodology" and the cities can then decide to adopt their own ordinances.
Metro Board Member and Duarte City Councilman John Fasana said he's leaning toward supporting the plan. He said extensive study by Metro supplies the link between the congestion fee plan and a possible reduction in traffic when applied regionally in all cities.
"I think it has been well-researched and is well-founded," Fasana said.
Under the minimum fee amounts spelled out in the Metro report, congestion fees would amount to: $1,876 per home, $1,150 per multi-family unit (apartment or condominium), $2.92 per square foot for retail, $2.26 per square foot for office space, $1.43 per square foot of industrial space and $2,464 per room for hotels.
BizFed members said they've heard from Metro board members who said the fees could be much, much higher.
Bill Holman, vice president of Azusa Land Partners, the group building the 1,250 Rosedale project in north Azusa, said his project's mitigation fees are already locked in under a previous agreement. But he was concerned about future developments.
At the $200 minimum congestion fee, a typical new house would generate eight car trips a day, amounting to a $1,600 congestion fee. "It all adds up," he said.
Schroeder said when one adds up all the existing fees on a new home for roads, schools, parks, etc., and adds in this one, between $25,000 and $75,000 is added to the selling price of a new home or townhome. "This is a big chunk of the price," she said.
Freeway and train watcher Bart Reed, executive director of The Transit Coalition in the San Fernando Valley, said every new project brings more traffic that must be addressed. "Everyone thinks they can have a free ride. But if you impact the community, you have to provide mitigation," Reed said. "There are lots of impacts when you build things. The business world naturally doesn't want to pay its fair share."
