Developer Fees Will Be 12 Times Expected Cost

Street improvements required by Costa Mesa to accommodate future office and commercial developments along the San Diego Freeway will cost $147.5 million--12 times more than previously thought, according to a study that will be presented to the City Council on Monday.

“I knew that the cost would be up there,” Costa Mesa Mayor Donn Hall said Saturday, “but I’m surprised at these kinds of numbers.”

The report, which the city paid the consulting firm of Fieldman, Rolapp & Associates to prepare, said developers would have to pay a fee of $1,165 per employee working in the new buildings to finance the road improvements. In the past, the traffic-mitigation fee paid by developers for existing buildings was $95 per employee.

The four commercial projects, all north of the San Diego Freeway, have been approved by the city on the condition that the developers pay for street improvements to help alleviate the congestion they would bring. One, however, the C. J. Segerstrom & Son’s Home Ranch/One South Coast Place, has been blocked by a court order until the city produces a new environmental impact report.

The other projects are Arnel Development Co.’s Metro Pointe; a Sakioka Farms development, and Curci-England/Transpacific Development Co.’s Metro Center.

None of the developers could be reached for comment Saturday.

Hall, who leads the four-member majority on the five-member City Council that is generally pro-development, said he does not believe the increase in fees will scuttle the four planned projects.

Hall said builders will either pay for the street improvements to keep their projects as planned or they will scale back their plans.

“In preparing this study, we had asked the developers to present the maximum density that they could envision for their projects,” Hall said. “The numbers have come back, and they may be more than the developers are willing to pay.

“They have the option of scaling down their developments. That would decrease the number of improvements they are required to make. . . . So, it’s up to them to decide whether the numbers are acceptable.”

But Kenneth Agid, an Irvine real estate consultant, said this jump in developer fees might cause builders to rethink their plans.

“It is difficult to imagine that with this significant an increase . . . developers won’t have to look at the economics of their projects,” Agid said.

“Without being privy to the economics of these specific developments, it is difficult to say whether these fees, or charges, will be so excessive as to make the projects, from a market standpoint, unfeasible.”

Jim Aynes, a spokesman for Mesa Action, a homeowners group favoring slow growth in Costa Mesa, said that even if the developers decide to pay the $147 million, the improvements--which include road widenings, traffic signals and freeway on- and off-ramps--won’t be enough.

“The city always underestimates the improvements that have to be made when it approves development projects,” Aynes said. “I doubt that things have changed this time around. . . . The fees they will be charging developers just will not be enough to take care of the traffic problems we have.”

The report will be presented to a study session of the City Council at 4 p.m. in the fifth-floor conference room of City Hall, 77 Fair Drive in Costa Mesa. Hall said the meeting is open to the public, but public comments will not be taken until a later council meeting.