San Pedro Chamber Criticizes Proposal for Development Fee

A proposal that would require developers to finance traffic improvements in the Los Angeles harbor area has drawn pointed criticism from the San Pedro Peninsula Chamber of Commerce, whose board has voted to oppose the idea before it gets off the ground.

The idea, which a city consultant is expected to consider as part of a yearlong study concerning traffic problems in the harbor area, would raise money to widen streets, add traffic signals or make other improvements necessary because of increased traffic due to developments.

However, chamber officials argue that development fees will discourage businesses from locating in the harbor area and drive potential jobs to nearby cities, such as Torrance, Long Beach and Carson, which lack development fees.

Jobs Lost

“We’ve lost 5,000 jobs in the last four years,” said chamber Executive Director Leron Gubler. “We’re trying to turn these communities around. . . . We’re not in a situation where we can be imposing development fees. We’re in a situation where we would like to encourage developers to come in.”

The chamber’s complaints, however, have drawn criticism from aides of Councilwoman Joan Milke Flores, who backs the idea of development fees, and from Rick Gaydos, chairman of a citizens advisory committee that is overseeing the consultant’s study, which is expected to get under way next month.

Ann D’Amato, Flores’ harbor deputy, said chamber officials, who have two seats on the citizens committee, ought to be thankful that they would have some say in how the fees are applied in their area because the city may eventually impose a blanket fee on all communities.

She said that she is sympathetic to the chamber’s concerns, “but at the same time we all recognize the need for traffic mitigation.”

D’Amato, who has been invited to present the councilwoman’s position at the chamber’s next board meeting, also said Flores may introduce an ordinance that would require developers to set aside money for traffic improvements before the study is completed.

“We have to deal with the problem now,” she said.

Gaydos, who received word of the chamber’s objections in an April 21 letter, said the consultant intends to study the economic impact of the fees and devise a formula for applying them that will not be prohibitive.

He said his committee, which will review and recommend ways to implement the study, will also consider its effect on the local economy.

Letter ‘Premature’

“I thought their letter to us was premature. I thought it was uninformed,” Gaydos said. “We’re wondering why the letter was sent out a year before we’re even going to do anything. There will probably be public hearings and all kinds of opportunities for the public to give their input.”

Chamber President Burley Ray Johnson responded: “The rationale for making the statement now is to have an impact on that recommendation. I don’t take a fatalistic approach to life and I don’t like to constantly be on the defensive. . . . I like to be in a position to influence change.”

Johnson said the chamber’s board members will keep an open mind when D’Amato speaks to them.

Asked if the chamber might reverse its position, he said: “Anything’s possible, if we could be assured that what is being proposed would not negatively impact businesses here, but that is going to be difficult for our councilwoman to achieve.”

Development fees are already in use in the area surrounding the Los Angeles International Airport, where a Coastal Transportation Corridor Specific Plan calls for developers of industrial and commercial property to pay a one-time fee of $2,010 for each afternoon rush hour trip generated by a new development. Thus, a development that would bring 100 employees to work in an area each day would pay a fee of about $200,000.

The per-trip fee is based on the projected growth of the area and the cost of traffic improvements necessitated by that growth. The number of trips is determined by the size and type of business and takes into account whether firms can reduce trips through car-pooling.

Certain businesses are exempted, such as grocery stores, which generally do not bring outsiders to a community.

In the harbor area, a “Port Transportation Specific Plan” is to be developed by Envicom Corp., which also had a hand in developing the coastal corridor plan.

The Los Angeles City Council voted last month to approve the study, which is supposed to project future growth, assess future traffic problems and come up with recommendations for paying for both traffic improvements and the study’s $512,000 price tag.

Woody Tescher, vice president of Envicom, said his firm is charged with investigating the use of development fees and other methods for financing the improvements and cost of the study.

Although it is almost certain that development fees will be recommended, Tescher said it is unlikely that they will be imposed according to the same formula used in the coastal transportation corridor.

Tescher said Envicom has hired an economist to take “a real hard look at the impacts of the fee,” and study the business climate in competing cities that do not have development fees.

Chamber President Johnson said he would like the consultants also to take into account other costs of doing business in Los Angeles, such as the city’s gross receipts tax, which costs businesses between $1 and $5 for every $1,000 in taxable gross receipts. Chamber officials say this tax is another disincentive to developers.

Both Johnson and Gubler said Long Beach officials play up the cost of the gross receipts tax in an attempt to lure businesses away from the Los Angeles harbor area. They said development fees will only compound this problem.

“The difference here, compared to anywhere else in the city of Los Angeles, is that we are completely surrounded by other cities who do not have to play by the same rules,” Gubler said.

“Why should a business locate in Wilmington and pay these fees when it can locate in Carson and not have to?”