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Stuart Waldman: Developers Fee Will Only Halt Necessary Construction

Posted: April 2, 2014 4:00 p.m.
Updated: April 2, 2014 4:00 p.m.

Compared to the city’s creation 26 years ago, Santa Clarita is as different today as it could possibly be. The most obvious reason for this is the development that caused – and then later responded to – a drastic population growth.

Now, development has slowed, due to fewer opportunities for large projects in the sprawling Valley as well as due to the recession, which slashed construction.

Inventory for houses is extremely low, with just 496 active listings throughout the Santa Clarita Valley on the Santa Clarita Valley Division of the Southland Regional Association of Realtors Multiple Listing Service at the end of January. Commercial vacancy rates range from 5.3 percent for industrial space to 6.9 percent for retail space.

The economy will eventually recover and as a result developers will want to ramp up their residential and commercial projects in the SCV and beyond. It is projected that Los Angeles County will add two million more residents by 2030, 257,000 new homes, 382 million square feet of commercial and industrial development, and almost 9 million new auto trips on its highways.

However, Los Angeles County is currently discussing a fee system that would drastically hurt new development and is bound to dissuade some developers from breaking ground in the county.

This month Los Angeles Metropolitan Transportation Authority (Metro) representatives and other regional officials have called for the institution of a Congestion Mitigation Fee on all new development – devised to fund regional transportation projects and improvements to reduce the county’s congestion issues.

This was a reincarnation of a proposal that was part of MTA’s 2003 Short Range Transportation Plan, in order to adhere to Proposition 111, which requires that a congestion management program (CMP) be developed, adopted and updated biennially for every county that includes an urbanized area.

Businesses and developers came in droves to shoot down the extremely expensive fee — $1,876 per residential unit, $2.97 per sq. ft. of retail and $1.43 per sq. ft. of industrial space, according to early reports.

But now the proposal is back, unchanged. And the business community’s opposition remains unchanged as well.

The fee is based on a one-size-fits-all model dating back to 1987 that charges projects regardless of design. Furthermore, the plan pretends to exist in a bubble, ignoring the forward-thinking measures proposed in recent years at the state and local level such as Measure R, the Sustainable Communities Act related to transit-oriented communities, Global Warming Solution Act aimed at reducing construction impacts and the Active Transportation Plan calling for investing in pedestrian infrastructure.

The Valley Industry and Commerce Association (VICA) is fully committed to resolving our traffic woes and recognizes that cities such as Santa Clarita do not have the resources to do so. Developers overwhelmingly favor proposals to standardize fees related to traffic mitigation through CEQA and other discretionary planning approvals. This proposed fee would just tack on another huge cost to projects that already drag on, time-wise and financially.

The intent of the fee is to mitigate congestion that new development creates. But if the county continues to punish the businesses and developers that are trying to create jobs and spur economic development, then we will likely see the opposite effect: A stagnant regional economy that cannot meet the demands of its growing population.

VICA urges you to contact your county officials and tell them to drop this damaging fee.

The Valley Industry and Commerce Association (VICA) is a business advocacy organization based in Sherman Oaks that represents employers throughout the Los Angeles County region at the local, state and federal levels of government.


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