Developers Object to Move for Tighter Building Policies in Long Beach

For years, city officials made it easy for developers.

Hopeful of reviving a declining downtown and aging neighborhoods, officials practically begged them to build here. Eventually, the lobbying and liberal policies, aided by a stronger economy, began to pay off.

But now, with a new downtown skyline rising around City Hall, officials are searching for ways to cope with traffic and overcrowding problems that have accompanied the resurgence. So they are drafting new fees and stricter policies that will demand more from developers.

Builders, architects, real estate experts and a representative from the Chamber of Commerce, however, said recently that they do not like the changes they see coming.

Yes, Long Beach is a hotter real estate market today than it was five or 10 years ago, they concede. But the city “has by no means arrived,” said Greg Berkemer, public affairs director and past president of the Board of Realtors.

The mood in City Hall, Berkemer said, appears to be: “Now is the time to turn around and almost stick it to the people who want to be a part of this renewal process.”

But city officials say Long Beach property is very cheap compared to surrounding communities. Here, for example, there are no developer fees for parks or transportation.

Developer Fees Fairly New

In contrast, a 1984 study of 23 Southern California cities found that the average developer fee for parks was $1,128--up from $463 in 1975, according to the California Building Industry Assn. For roads, the average charge was $1,635. Eight years earlier, there were no such fees in the cities surveyed.

Long Beach officials said they are still determining how much to charge in new developer fees. A proposed fee that would go toward building new parks is expected to be considered by the City Council in two months. A proposal that would levy fees to pay for transportation improvements should be ready by next April.

Next month, the council will debate imposing new sewer fees that include a one-time $45 charge for each fixture such as toilets, showers and sinks in new developments. A new single-family home with 14 fixtures, for example, would be charged $630. For a major hotel, the one-time fee would likely be more than $250,000.

In addition, the council is continuing to lower residential densities in existing neighborhoods. Last week, the council downzoned the California Heights area to prohibit property owners from putting any additional units on their single-family lots. Both actions continue a trend that began about two years ago when the council approved a sweeping series of rules for apartment construction. Among other things, the regulations cut in half the number of units allowed on single lots.

But builders argue that limiting new construction while creating new fees for future development is incongruous.

“As you limit supply and limit development,” Berkemer said, “it’s contradictory to assume that you can curb development and yet look to development as the answer to fund citywide improvements.”

Still Seek Housing Downtown

Real estate broker Dick Gaylord, a former Planning Commission chairman and past president of the Board of Realtors, noted that city officials--who “begged developers to come here”--are still actively seeking new housing for downtown.

“We’ve made a lot of progress in Long Beach. But we’re not there yet,” Gaylord said. “We need more. So we (the city) shouldn’t get too cocky.”

But city officials believe it’s time for a change.

“The people who have lived here and maintained their home and invested in their community ought not to bear the burden of new development,” Councilman Warren Harwood said. “It’s long overdue that we insist that new development pay their way.”

Mayor Ernie Kell said the changes in Long Beach reflect what’s happening throughout Southern California. As area officials deal with traffic congestion, lack of parking and other problems associated with growth, “there’s a definite trend to say more is not necessarily better,” Kell said.

“They (developers) have an obligation when they come into a city to make it better,” Kell said in support of the proposed fees. “And in my opinion, they’re not paying their fair share.”

Developers say they are willing to pay their share. But they worry that unfair fees and policies might hinder--if not altogether stop--their projects in Long Beach.

“We are, as developers, very much in favor of anything that makes a city more desirable,” said Paul Stern, executive vice president of the Ratkovich Co., which is planning a $1-billion complex near the Long Beach waterfront. “We’d like the city to do anything it can to become more attractive. By the same token, we have to advise temperance. You can’t go crazy.”

Builders also warn that higher development fees drive up the cost of houses, office buildings and other construction. That cost will be passed on to buyers and renters.

“It isn’t some rich fat cat builder who hands out tens of thousands of dollars and pays for it,” Berkemer said.

Laurie Hunter, Chamber of Commerce vice president, said it is unfair to charge one developer for the cost of a new park or road when the same park and road will be used by the entire neighborhood. Chamber members, Hunter said, hope to work with city management and propose alternatives to developer fees.

Want Advance Word

Several builders emphasized that a developer needs to know about such fees in advance to plan accordingly.

Wesco Development Co., for example, is planning to build 160 apartments on 3rd Street in downtown. The proposed sewer fee would increase the cost of that project by more than $100,000.

“If a project of our size were impacted by these (sewer and other) fees, without being able to plan for it in advance, it could be devastating,” said Tony Arnest, Wesco’s acquisition director.

“We’re not objecting to reasonable fees,” Arnest said, echoing the sentiments of others in the trade. “(But) They cannot cure all of society’s ills on the back of the developers.”

Developers also are concerned about another proposal. Within the next few weeks, the council is expected to consider reversing a policy that exempts builders from zoning changes imposed after their projects are under way.

Traditionally, the council has been reluctant to force such a developer to conform to new zoning limits or other restrictions. But in many other cities, developers must have obtained a building permit and made a substantial investment in the project before they are exempted. That usually means “you’ve dug a hole and poured concrete,” said Robert J. Paternoster, the city’s planning and building director. In Long Beach, however, developers have sidestepped zoning changes and the like by simply filing a project application, officials said.

Councilwoman Jan Hall, who favors developer fees and sewer fees, said she has not yet decided how she will vote. Historically, Hall has stood against “changing rules midstream.”

Kell said in an interview last week that he used to feel that way but recently changed his position. “It’s one of the calculated risks of being in business,” said Kell, a retired millionaire developer.

Plan to Protest

Developers plan to protest the proposed shift in policy.

John Carlson, marketing vice president of the Kilroy Airport Center, said: “When we apply for a project, we have done a ton of work with the architect. You can’t come back in six months and say, ‘We changed the rules.’ ”

Architect Brent Sears said such a policy change puts him and other architects in a precarious position. “This makes it difficult for an architect to advise a client on a particular piece of property,” Sears said.

But some council members said the current policy has hurt the city. Residents in South Long Beach, for example, are still seeing the construction of box-like apartment buildings because developers rushed in with applications before a 1986 council vote prohibiting such projects on small lots.

“We have allowed development to come in at its own pace--maybe too far,” Councilman Evan Anderson Braude said. “Now, developers are going to have to understand. There are going to be some changes, and they will have to pay (to offset the impact of their projects.)”