The Costa Mesa City Council has slapped $97.5 million in new road-improvement fees on four major developers who want to turn farmland into a $1-billion corridor of office towers along the San Diego Freeway.
"This is the most costly construction project in the history of Costa Mesa," said Dan Lamm, the city's development director.
"And I know of no other project in Orange County that is requiring this kind of traffic improvement for a proposed project," Lamm said. "We've finally stopped talking about traffic and decided to do something about it."
The City Council, in a unanimous vote late Monday, imposed a sevenfold fee increase to $668 from $95.
Under the plan, developers would pay a one-time fee of $688 per daily "trip end." A trip end is based on projections of the number of times cars will enter and leave a project. For example, a project with 100 daily trip ends would pay $68,800 in fees.
The four developers' projects are expected to generate 145,980 vehicle trips a day by the time they are completed in the next 30 years.
Developers did not oppose the fee increase at the City Council meeting. But on Tuesday, Max Nardoni, spokesman for Curci-England/Transpacific Development Co.'s South Coast Metro Center project, said the sharp increase in fees is causing his company and the three other developers to reassess their plans.
"What we would like to see is for these fees not only to be imposed on future projects like ours, but also on existing commercial projects," Nardoni said. "We just feel that the burden should be spread more equally because many of these traffic problems were caused by existing commercial developments."
The City Council action would add $3.6 million to the cost of completing the 522,000-square-foot second phase of South Coast Metro, Nardoni said. But he would not say if this additional cost would cause his company to scale back its plans to add to the three skyscrapers it now has in place.
"I honestly just don't know," Nardoni said. " We've got to look at financial studies. But we've also got to look at how these circulation improvements would have a positive effect on the marketability of our properties."
He said when he had talked with the other developers, they, too, had said they were going through similar reassessments.
The three other developers affected by Monday's action are C. J. Segerstrom & Sons, Arnel Development Co. and Sakioka Farms.
Segerstrom had received City Council approval for its Home Ranch project, which includes the controversial One South Coast Place. But in November, a Superior Court judge blocked construction on One South Coast Place until a new environmental impact report could be prepared.
The report is scheduled to be presented tonight) at 6:30 in the Costa Mesa City Council chambers and is expected to attract an overflow crowd, city officials said.
Arnel Development Co.'s Metro Pointe was approved in concept by the City Council in 1984, and a final plan for the project is scheduled to come before the Planning Commission on Monday.
Sakioka Farms, according to Councilwoman Mary Hornbuckle, is "kind of in limbo because they've been holding off bringing their proposals before the City Council."
Spokesmen for these three developers could not be reached for comment Tuesday. City Council members said they were forced to extract these heavy developer fees to pay for such traffic improvements as wider streets, more turn lanes and more freeway ramps because the city could not pay for them.
At Monday night's meeting and in interviews, some City Council members said their position is that if the developers are unwilling to pay for these improvements, then they cannot go forward with their projects.
"The idea behind raising the fees so dramatically is to let those living in the north end of the city know that these transportation improvements will have to be in place before the developers can go forward with their plans," Hornbuckle said.
"The city does not have the money to pay for them, and if the developers are unwilling to pay for these transportation improvements, then they will have to scale back their plans," Hornbuckle said.
Both Hornbuckle and Nardoni agreed that negotiations between the city and developers will be tough during the next few months as they thrash out how much development will be allowed under fees that developers are willing to pay. But Hornbuckle also believes negotiations will be "cooperative."
Nardoni noted that this cooperation between the city and developers began two years ago when the developers formed themselves into the so-called I-405 Access Corridor to explore ways to solve existing and future traffic problems.