Office Complex Approved; Improvements Up to Anaheim Council

The Anaheim Planning Commission on Monday approved building a 1.2-million-square-foot office complex in the Anaheim Stadium business district. But it left to the City Council the decision on how to pay for public improvements needed for the project.

Planning commission approval of the $170-million Hanover-Katella project came despite disagreement between city officials and developers over the exact amount of fees that developers would pay for the project.

Current development fees are set at $4.12 per square foot. But commissioners are recommending that the council require additional fees of $2.65 per square foot to help make up for a $36-million shortfall needed for area-wide public improvements.

City officials have said the Anaheim Stadium area needs an estimated $110 million in improvements such as new sewer and storm drain systems, plus major road projects to support planned developments.

Existing development fees will provide about $38 million of the total; another $36 million will come from a combination of sources, including federal funds. The remaining $36 million was to have been generated by the controversial Katella redevelopment project, which the council rejected after protests by angry residents fearful of losing their homes.

Since the defeat of the redevelopment project, city officials have been grappling with ways to make up the $36 million but have reached no long-term solution.

After an emergency session last week, the City Council directed planning commissioners to require that impending projects compensate for the shortfall through more fees and increased off-site improvements.

But the commission’s decision to refer fee increases to the council for action showed their uneasiness at approving huge projects without funding for needed public improvements. Commissioners noted that they will have to consider another 1.8-million-square-foot project within two months. They also expressed the fear that continued fee increases would drive away developers.

Dennis Abramson, a general partner in the Hanover project, agreed. If fee increases are imposed to solve the shortfall, Abramson predicted, “you’re looking at a general moratorium in building in this city.”

He said his group had not had a chance to assess the impact of the proposed $2.65 fee increase and could not say whether they would abandon the project if the City Council raised fees.

Meanwhile, planning commissioners called on the City Council to explore other solutions, including establishing another redevelopment project in the area or creating an assessment district, in which businesses within an area would be assessed a special tax to pay for public improvements.