Apartment and condominium developers may have to pay more than twice as much as they currently do in development-impact fees next year as some City Council members said this week the current fees don’t fully cover how much new developments cost the city in library and park services.
Developers currently pay $7,000 per residential unit, but the city may hike that to $15,645, which is what a consultant recommended in 2007. Originally, the fees were set purposely low, at $3,500, to help developers who were having difficulties securing financing during the protracted recession and to stimulate development in downtown.
The fees climbed over the years on a fee schedule that had been delayed several times, but they were never planned to jump to the consultant’s recommendation until now.
The proposed fee increases come after Councilman Ara Najarian said he was concerned with the current development boom in Glendale, which may bring roughly 3,800 units in 21 developments to south Glendale.
So far, 434 units in three developments have been completed since last January and 1,340 units in seven developments are under construction.
“It is imperative that we set those rates immediately to where they belong and not subsidize these mega-developers anymore,” Najarian said during a City Council meeting Tuesday before council members directed staff to draw up a new ordinance increasing the fees.
City Attorney Mike Garcia said there was no timeline for when the ordinance will come before council for a vote, but if it passes, the new charges would take effect 30 days later.
The new fees would impact businesses that have yet to apply for the first stage of design review when the ordinance is approved. Developers would have to pay the full fee when they receive their building permits, Garcia said.
Community Development Director Hassan Haghani said he does not think the hiked fees will have an impact on the rate of development.
“We’re in a different time. It’s not 2007 and we do have a lot of development,” Haghani said during the City Council meeting.
Councilwoman Laura Friedman agreed.
“We have a good amount of development going on,” she said, adding that she’d like to explore charging a different amount per unit size.
In addition to increasing fees for multi-family development projects, single-family home development fees could jump to about $18,200, from $7,000.
Pasadena charges between $16,618 and $30,761 per unit depending on the size, ranging from studio to five bedrooms or more, according to a city report. Burbank charges about $1,770 per multi-family unit.
But Councilman Zareh Sinanyan said he would be opposed to breaking down the fee by bedroom since he wouldn’t want to increase the supply of small studio and one-bedroom units in south Glendale because that would negatively impact families.
The city spends the fees on park and library improvements, such as the Glendale Narrows Riverwalk and the Pacific Park Pool and Community Center.
For the fiscal year, which ended on June 30, Glendale collected a little more than $1.5 million in parks mitigation fees and $154,211 in library development fees, totaling about $1.7 million in collections, according to a city report.
The city also collects money from developers who do not install public art in their projects for Glendale’s art fund, which the Arts & Culture Commission is currently considering how to spend. Those are considered in-lieu fees, not development-impact fees.