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Santa Monica to Look to Development to Pay for Transit Improvements

Santa Monica Real Estate Company, Roque and Mark
By Jason Islas
Staff Writer

February 22, 2013 -- The City Council will vote on an ordinance Tuesday that would make developers pay a transportation impact fee (TIF) that would generate up to $93 million to help offset the $134,315,829 Santa Monica expects to pay on transit improvements over the next 20 years.

The fee, which developers would have to pay to offset the impact of their developments on the City's roadways and transit networks, would be levied only against developments that would increase traffic in the City, such as new developments.

“The Fee is based on net changes so that properties receive full credit for those trips already being generated by uses on the site,” staff said.

For example, someone building a 20-unit residential complex in Downtown Santa Monica on an empty lot would have to pay for each unit. If that same 20-unit building were to replace a 10-unit building, the developer would have to pay for the 10 new units, at $2,600 per unit.

The ordinance would divide the City into areas. Area 1 consists of the Bergamot Area and Downtown Santa Monica. In those areas, developers have to pay $2,600 for each new residential unit they build, $21 for every square foot of retail space they add to the area and $3.60 per square foot of “lodging.”

The rates for Area 1 are a result of the area's “accessibility by transit and the presence of a diversity of complementary land uses and activities, both of which tend to reduce vehicle travel demand,” staff said.

These areas are within walking distance of the future sites of two of the three Expo Light Rail stops in Santa Monica.

The rates in Area 2, the rest of Santa Monica, are higher. If the ordinance passes, developers will have to pay $3,300 per residential unit in multi-family developments. They would also have to pay $30.10 for every square foot of retail, $10.80 for every square foot of office space and $3.60 for new “lodging” space.

Medical offices, which officials say are one of the highest traffic producers, will have to pay the most: $28.10 per square foot in Area 1 and $29.80 per square foot in Area 2.

Though the City anticipates collecting some $93 million from the transportation impact fee over the next 20 years, Strategic and Transportation Planning Manager Francie Stefan said that legally, the money could only be used for physical improvements to the City's transit ways.

Of the $134,315,829 the City expects to spend on transit over the next 20 years, $33,708,781 will be on “bicycle actions,” while $25,024,000 will be on “pedestrian actions.” The City also anticipates spending $11,594,000 on “auto network actions,” leaving aside $32,421,062 for contingency.

TIF money can't be used for programs like bike safety training or pedestrian safety classes, she said.

If passed, Santa Monica will have some of the highest TIFs in the region for residential development. Only West Los Angeles Warner Center charges a TIF for residential development: $2,673 per unit. In West LA, the Coastal Corridor and Central City West, residential developments are exempt from TIFs.

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