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HomeMy WebLinkAboutStaff Report 323-05The City has severa~ new development-related fees under consideration. Potential one-time development impact fees include: • Citywide transportation (TIF) • Charleston! Arastradero corridor fee • Water/wastewater capacity (adopted, effective 7/1/2005) In addition to impact fees, developers are required to pay other fees on their projects, which add to the cumulative economic effect of doing business in Palo Alto. Some of these are one-time application expenses such as permit fees, which are included in charts in this report comparing Palo Alto to other cities. Other fees are not development-related. These are ongoing, paid by residents and businesses annually or monthly, not just with new construction. Current ongoing fees include utilities fees, the Downtown Business Improvement District fees, and the University and California Avenue Parking Assessment Districts. A storm drain fee increase was approved by voters on April 26, 2005. Other potential ongoing fees include a business license tax and emergency response or 911 fee. Ongoing fees are not included in the data presented in this report. Current & Potential Fees Chart 1 depicts each of Palo Alto's current and potential impact fees for two types of residential projects: a new single-family home; and per multi-family dwelling. If enacted, potential impact fees will add 20% to 22% to the current impact fees charged to new residential development. CMR:323:05 Page 2 of12 Park, would also be subject to a citywide transportation fee if enacted. In portions of the half- mile CharlestoniArastradero corridor a few parcels (pending development) could be subject to the CharlestoniArastradero fee, potential citywide TIF, and San Antonio/West Bayshore fees. Fee overlap areas are indicated on Attachment C, though "citywide" is not included in the legend (since all parcels would be affected by a citywide fee). Impact Fee Exemptions It is important to note that development impact fees include a number of exemptions, which vary widely across fee ordinances adopted by each city. The City of Palo Alto's impact fee exemptions are not uniform, and are summarized in Attachment B. Each exemption reflects a policy decision addressed at the time the impact fee was enacted or amended by City Council. New development may be exempt from all or some impact fees, depending upon the intended use as summarized in Attachment B. For instance, 100% affordable housing projects (not a mix of market rate and below market rate) are exempt from current impact fees. Palo Alto Compared to Other Cities Council has expressed an interest in comparing Palo Alto's fee levels with those of surrounding communities. Palo Alto recently participated in two development fees surveys: one conducted by Redwood City (April 2005) and another conducted by the City of San Jose on behalf of the Home Builder's Association (May 2004 and June 2005). These multi-city surveys calculated development-related fees and taxes, including permit, construction, and development impact fees for various project types. They did not include ongoing, non-development-related fees. Comparison data presented in this report is derived from the data in the surveys plus online research on fees in each jurisdiction. Other jurisdictions have addressed fees in a variety of ways. The most common .development fees are implemented to support parks and water/sewer systems or mitigate traffic. Other jurisdictions have fees designed to support public facilities like libraries and public safety buildings. Less common fees include those that fund housing and street trees, or are applied as a general construction tax. Table 1 depicts the array of development impact fees and taxes in a few jurisdictions in the Bay Area. T bIll tF T I V • J . d· f a e . mpac ee .ypes n arlous uris IC IOns . Menlo Redwood Fee type Los Gatos Milpitas San Jose Fremont Park City Palo Alto fPark X X X X X !Housing X X Traffic X X X X X X IW ater/Sewer X X X X X X X Street Trees X X Other Facilities X X Construction Tax X X CMR:323:05 Page 5 of 12 Attachment A: Current Development Impact Fees HOUSING • $15.58 per square foot applies to nonresidential development • .For more information, see City Manager's Reports (CMR) 383:01, 150:02, 189:02, Ordinance No. 3560 and 4763, and Palo Alto Municipal Code (PAMC) section 16.47 TRAFFIC Stanford Research Park 1 El Camino Real CS Zone • $8.68 per net new square foot, effective July 1,2004 • For more information, see CMR 150:02, 189:02, Ordinance No. 3894 and 4763, and P AMC section 16.45 San Antonio 1 West Bayshore area • $ 1.79 per square foot Parking in lieu fee for the Downtown Assessment District • $53,731 Iparking space if approved after July 1,2004 COMMUNITY FACILITIES Single Family Multi-Family Fee Single Famil~ over 3000 s.f. Multi-Famil~ under 900 s.f. Parks $ 8,670 $ 12,946 $ 5,675 $ 2,869 Comm Ctr 2,248 3,364 1,479 746 Libraries 784 1,166 513 257 Total $ 11,702 $ 17,476 $ 7,667 $ 3,872 basis per home per unit per unit per unit Fee. Commercial Hotel/Motel Parks $ 3.682 $ 1.664 Comm Ctr $ 0.208 $ 0.094 Libraries m 0.198 m 0.083 Total $ 4.088 $ 1.841 basis per net new s.f. per net new S.f. For more information see CMR 381:01,146:02,188:02, Ordinance No. 3894 and 4763,2005/06 Adopted Municipal Fee Schedule. Attachment B -Palo Alto Development Impact Fee Exemptions Exemption Community Traffic -Traffic -San Housing Facilities SRP Antonio Or4inqnce section 16.47.030 16.48.030 16.45~050 16.46.030 Residential X X X Churches X Colleges and Universities X Commercial Recreation X Hospitals X Convalescent facilities X Private clubs, lodges X Fraternal organizations X Private education fadlities X Public facilities X X 1,500 s.f. retail/personal service/automotive serVIce X X X (one-time) 250 s.f. or less X X Hazardous Materials Storage X X On-site cafeteria! recreation! childcare (employee use X X only) Thermal storage for energy X conservation Temporary uses < 6 months X X Below Market housing Residential X beyond required units is exempt Residential Residential is 100% Affordable housing X is exempt exempt Daycare, nursery school, X preschool Attachment D Additional Information on Impact Fees in Palo Alto and other Jurisdictions 1. Housing 2. Traffic & Transportation 3. Facilities 4. Parking Assessment Districts· 1. Housing, $15.58 per square foot In 1984, the City of Palo Alto adopted Chapter 16.47 of the Municipal Code requiring developers of commercial and industrial projects to develop below market rate housing or pay a housing fee as mitigation for the impacts on housing attributable to jobs created by commercial development. Revenue collected under the ordinance is placed in the Commercial Housing In-Lieu Fund and has been used exclusively to subsidize the cost of housing affordable to very low-and low-income renter households. Over 400 rental units have been assisted with these funds. Palo Alto's current Housing In-Lieu fee is $15.58 per square foot. Sample housing impact fees in other jurisdictions are as listed in Table 1 below. Tabl 1 H e ousmg I mpac tF ees Jurisdiction Land Use I per square foot Palo Alto All Commercial $ 15.58 City and County of San Francisco Office $ 14.96 Hotel $ 11.21 Retail $ 13.95 Menlo Park2 Office/R&D $ 11.89 Commercial/Industrial $ 6.48 Mountain Vie~ Office/Tech/Industrial $ 3.00 -$6.00 Commercial/RetaillHotel $ 1.00 -$2.00 County of Marin 1 Office/R&D $7.19 Retail/Restaurant $5.40 Warehouse $1.95 Manufacturing "$3.74 Walnut Creekl All Commercial $5.00 1. Housing Impact Fee Nexus Analysis City of Walnut Creek, Keyser Marston Associates Inc, December 2004 2. Menlo Park Municipal Code, Section 16.96.030 3. Mountain View Adopted 200412005 Municipal Fee Schedule San Leandro 6 General Residential $ 939 (Street Senior Residential $ 469 Retail $ 1.56 - $ 2.92 Improvement) Office/R&D $ 2.61-$ 3.65 Restaurants $ 2.09 -$8.45 1. Redwood City Development Fee Study, January 2005 2. City of San Mateo Development Fee Calculator 2004-2005 3. City of Livermore Development Fees 4. City of Walnut Creek Fees and Charges 2002-2004 5. City of Gilroy Fees to Build, January 2005 6. Community Development Department Development Fees July 2004, San Leandro 3. Community Facilities Council adopted impact fees for parks, libraries and community centers in March 2002 (PAMC 16.58). These fees apply to new residential and non-residential development citywide, as listed in Table 3. Table 3 Facility Impact Fees Jurisdiction Comm. Other Highest Land Use Park Library Center Facility Total City of Palo Alto Home> 3000 sf $ 12,448 $ 3,235 $ 1,121 $ 16,804 Home < 3000 sf 5,457 2,162 754 $ 11,253 MF> 900 sf 8,337 1,422 493 $ 7,372 MF < 900 sf 2,759 171 247 $ 3,723 Commercial 3.54 0.20 0.19 $ 3.93 Hotel/Motel 1.60 0.09 0.08 $ 1.77 Morgan Hilll Single Family $ 3,540 - $ 4,556 $ 228 $ 384 $ 426 $ 5,592 Multi-Family $ 2,922 - $ 3,753 $ 192 $ 313 $ 353 $ 4,611 Gilro/ Single Family $10,340 $ 1,810 $ 3,100 $ 4,392 $ 19,642 Multi-Family $ 7,380 $1,290 $ 600 $ 7,369 $ 16,639 Commercial $2.856s.f. $2.856s.f. Industrial $1.268s.f. $1.268s.f. Mountain Viewj Single Family $ 15,400 $ 15,400 Multi-Family $ 13,100 $ 13,100 Dublin Single Family $17,606-$18,005 $ 18,005 Multi-Family $11,004-$11,253 $ 11,253 Commercial $1.550-$1.562s.f. $ 1.562s.f. Office $3.010-$3.034s.f. $ 3.034s.f. San Jose4 Single Family $ 3950-$ 15,700 $ 15,700 Multi-Family $ 3150-$ 14,250 $ 14,250 SRO $ 1,450-$ 4,850 $ 4,850 Livermore;) Single Family $ 12,384 $ 12,384 Multi-Family $6,565-$10,775 $ 10,775 Commercial $1.570 s.f. $ 1.570 s.f. Office $2.245 s.f. $ 2.245 s.f. 1. City of Morgan Hill Public Works Fax 2-20-2004 2. City of Gilroy Fees to Build, January, 2005 3. ,City of Mountain View 2002 Housing Element 4. Public Works Department, City ofSc;m Jose. Does not include construction tax. 5. City of Livermore Development Fees 4. Parking Assessment Districts a) Downtown $53,731 per parking space. The In-Lieu Parking Fee Ordinance (PAMC 16.57) was enacted by Council in January 1995. The ordinance allows certain non-residential development within the boundaries of the downtown assessment district to pay a fee instead of providing required off-street public parking. The collected fees are used to help offset the costs of any new public parking facilities constructed in the assessment district. The fee is based on the cost of constructing parking facilities, and was updated to include two new parking structures on Lots S/L and Lot R in 2002. The current In-Lieu Parking Fee in the downtown district is $53,731 per parking space. b) California Avenue Parking Assessment District A Parking Assessment District was established in the California Avenue area in 1966 to facilitate issuing debt and establish repayment of bonds in order to construct parking projects in the area. The district has two active projects at this time, Keystone Lot Parking, and the Ted Thompson Parking Structure (CMR 326:04). Rather than a one- time fee paid at the time a building permit is issued, parking assessments are collected as part of the annual property tax due on parcels within the district. Annual fee for each parcel is based on building square footage, land square footage, and building use. Thus, if a property owner in the California Avenue Parking Assessment District were to expand the total square footage of an existing building or change the use of an existing building, then the annual parking assessment fee may change. Recent experience in the California Avenue parking assessment district has shown no increase in building size, due to parking restrictions.