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Suspension of Development Fees Considered in Chula Vista

An ordinance to suspend development-impact fees in redevelopment-project areas for a period of five years was before the Chula Vista City Council on Tuesday, January 11. Impact fees, often paid by the new developer, assist with infrastructure needs created by the project. At issue was whether the suspension should apply to both residential and retail impact fees.

Many residents and entrepreneurs spoke in favor of the full suspension, emphasizing the need for retail revenues and the need for creating incentives for business.

Mayor Cheryl Cox and councilmember Pamela Bensoussan also favored suspending both fees. Bensoussan worried that Chula Vista had priced itself out of the market. She referred to a consultant study that showed “We’re more expensive in our residential component [fees] than Del Mar; we’re right up there with the most expensive city in the county.”

However, newly elected councilmember Patricia Aguilar said she could not support the suspension of retail impact fees. Aguilar asked, “Is it a good thing to use taxpayer money to subsidize private development?” If impact fees are suspended, redevelopment-tax-increment monies are used for infrastructure. She argued that tax-increment money comes from property tax.

Assistant city manager Gary Halpert responded, “It’s not a subsidy because the reality is you don’t have to build the infrastructure at all.”

Aguilar pointed out that tables in the same consultant study referred to by Bensoussan showed that Chula Vista’s retail impact fees are comparable to county averages. She also said Chula Vista’s west side, the redevelopment area in question, already had a glut of retail space.

After the proposed ordinance went down to a defeat, the council passed a substitute ordinance that suspends the collection of fees charged for market-rate residential, excluding the bayfront area — but not retail. However, the ordinance did suspend fees for retail, office, and industrial space in the Otay Valley Road redevelopment area and suspended the fees for industrial in the southwest redevelopment area.

Aguilar also raised the larger question that is haunting California at this time: does redevelopment revenue really come back to the City over time? Cox has asked the staff to study this question.

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An ordinance to suspend development-impact fees in redevelopment-project areas for a period of five years was before the Chula Vista City Council on Tuesday, January 11. Impact fees, often paid by the new developer, assist with infrastructure needs created by the project. At issue was whether the suspension should apply to both residential and retail impact fees.

Many residents and entrepreneurs spoke in favor of the full suspension, emphasizing the need for retail revenues and the need for creating incentives for business.

Mayor Cheryl Cox and councilmember Pamela Bensoussan also favored suspending both fees. Bensoussan worried that Chula Vista had priced itself out of the market. She referred to a consultant study that showed “We’re more expensive in our residential component [fees] than Del Mar; we’re right up there with the most expensive city in the county.”

However, newly elected councilmember Patricia Aguilar said she could not support the suspension of retail impact fees. Aguilar asked, “Is it a good thing to use taxpayer money to subsidize private development?” If impact fees are suspended, redevelopment-tax-increment monies are used for infrastructure. She argued that tax-increment money comes from property tax.

Assistant city manager Gary Halpert responded, “It’s not a subsidy because the reality is you don’t have to build the infrastructure at all.”

Aguilar pointed out that tables in the same consultant study referred to by Bensoussan showed that Chula Vista’s retail impact fees are comparable to county averages. She also said Chula Vista’s west side, the redevelopment area in question, already had a glut of retail space.

After the proposed ordinance went down to a defeat, the council passed a substitute ordinance that suspends the collection of fees charged for market-rate residential, excluding the bayfront area — but not retail. However, the ordinance did suspend fees for retail, office, and industrial space in the Otay Valley Road redevelopment area and suspended the fees for industrial in the southwest redevelopment area.

Aguilar also raised the larger question that is haunting California at this time: does redevelopment revenue really come back to the City over time? Cox has asked the staff to study this question.

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Comments
8

The developers will build where the demand is, irregardless of a few little dinky impact fees. All that is accomplished by forgiving impact fees is to rob your residents of a few amenities.

Frederic Bastiat

Jan. 16, 2011

Irregardless of how you feel about those "dinky little fees", irregardless is not a word. Fees are taxes. Taxes that cover costs for governmental services need to be audited and reviewed for their effectiveness. I rarely visit businesses in west CV because it is not a nice place. It is neither exceptionally clean or friendly. I can't imagine any business owner getting rich running a shop there, but if they do, then great for them! If a person wants to open a business and it succeeds, then the community supports it and it was needed. Extra taxes that do not improve the business climate or service the patrons in a measurable(or even visible) way are burdensome.

Jan. 16, 2011

FB,

Regarding your point that developers will build where there is a demand, as I recall the council discussion, council member Aquilar referred to a study done by city staff which said that the only way to change the kind of retail the west side of Chula Vista attracts is to change the demographics.

Jan. 16, 2011

Also I need to correct the story. The Assistant City Attorney is Halbert not Halpert.

Jan. 16, 2011

Assistant city manager Halbert...

Jan. 16, 2011

When I hear staff and some council members talk about redevelopment I know I'm in for more wishful thinking. They have held developer Expos, rezoned city owned parking lots to entice condo builders, put out RFPs on the old Woodlawn Corp Yard, took at least five years to get a million dollar sign up on I-805 for our "block" of cars down on Main Street. For all their straining, opining and tweaking the result is negligible. There is NO tooth fairy and it is refreshing that Councilwoman Aguilar seems to get that.

VigilantinCV

Jan. 16, 2011

And we ALL know, right, that the Assistant City Manager in Chula Vista, Gary Halbert, used to be the director of Development Services in San Diego, right? He brings extensive experience as to how to do business. Chula Vista may be the next San Diego Redevelopment District.

Jan. 16, 2011

That was an interesting comment notalgic. I found on line a SD city response to a grand jury report saying that S.D. planning groups had distrust for the Department of Developmental Services, of which Mr. Halbert was the director. It's a 2005 letter online that provides more extensive interesting background. Thanks

Jan. 17, 2011

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