Developer’s impact fees may add up to $9M toward parks, libraries

The developer of a nearly 500-unit, mixed–use project on Lexington Drive in downtown Glendale will be asked to pay roughly $9 million toward local parks and libraries if the development company pulls building permits, making it one of the first projects that may be subject to increased development-impact fees adopted by the Glendale City Council earlier this year.

Under the new fee structure, developers of multiunit projects must pay $18,751 per unit compared to $7,000 before the hike. Single-family development fees jumped from $7,000 to $21,828 and office-space fees jumped from $3.26 per square foot to $7.92 per square foot.

The city collected about $1.7 million in impact fees during the 2012-13 fiscal year. That figure is projected to swell to about $8.1 million by the end of the current fiscal year and $12 million by the time the 2015-16 fiscal year ends, said City Manager Scott Ochoa.

Twenty-one upcoming projects are projected to pay the new impact fees, ranging from smaller residential projects such as a project of four townhouses to be built at 440 E. Palm Drive, which is expected to be asked to pay $21,000, to a potential $1.47-million check to be signed by the developer of a mixed-use project at 411 N. Brand Blvd., according to a breakdown provided by the city’s planning department.

Developments already generate revenue for the city’s general fund, but impact fees would have a restricted use for parks and libraries.

Mayor Zareh Sinanyan said he was pleasantly surprised when heard that a little more than $9 million would be paid by the developer of a mixed-use project at 201 W. Lexington Drive, a lot owned by Citibank.

“Right now, we have our library programs running at a fraction of our former capacity,” he said. “Parks, there can never be enough money to satisfy the needs of park space and green space, especially in south Glendale, so these are very welcome additions to the budget.”

The impact-fee revenue from developer Century West Partners for its project on the Citibank-owned lot is projected to be collected in the 2015-16 fiscal year, according to the planning department.

With about 3,800 apartment units either in the entitlement process or under construction within the city, some officials view the rate adjustment as way of gradually slowing the development boom that’s been occurring in Glendale, particularly downtown.

There were more than a dozen projects in the development pipeline at the time the impact fees were increased that weren’t subject to the assessment because they had already initiated the plan-check process.

Now, developers will have to pay the fee when they pull building permits, said Hassan Haghani, the city’s community development director.

Councilman Ara Najarian said he would have liked to have implemented the higher impact fees several years ago, but spoke positively of how much fee revenue the Citibank project will generate if building permits are pulled for it.

“This is really prime evidence a developer can still make a profit despite paying impact fees that we have raised to this current level,” he said.

City staff is also looking into the feasibility of establishing an impact fee to help pay for low-income housing at the request of Sinanyan during a council meeting last month.