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Discount pricing to build homes in Manteca? No way

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POSTED February 24, 2010 1:45 a.m.
Developers are playing with fire – literally.

They can make a case for suspending bonus bucks for now but they are pushing their luck when they keep characterizing Manteca’s growth fees as being “too high.”

The rhetorical question would be “too high” based on what? It isn’t the call of the builders or developers to decide the level of amenities that a community wants. That is what we elect city councils for in the first place. If they prefer to build in other cities that have less neighborhood or community parks they should feel free to do so.

Builders should not be allowed to frame the argument in terms of what growth fees are in other cities. Manteca had to build a $67 million wastewater treatment plant to meet state mandates when they did or else it would have shut down development. It is patently unfair to take a city that is now building the same type of plant when construction costs have plummeted and compare their fees with Manteca’s fee.

At the same time, they run the real risk of alienating the goodwill of a lot of people – read that those voters who support the current council’s policies  – if they continue in their drive to try to get Manteca leaders to run the city as if it were Wal-Mart.

That is both a compliment – and a major criticism.

Wal-Mart is famous for driving down costs. In doing so, they strong-arm many suppliers and create a repetitive store look. Wal-Mart’s real estate division is notorious for telling developers that they won’t pay more than a certain amount per square foot for land and a building regardless of actual costs or the market. They bluntly tell them they “need Wal-Mart” and that the developer can make it up elsewhere with all the other business that will want to cluster around their store as well as all the revenue they will bring in to a city.

Efficiency is one thing. Passing the buck is another.

The developers in this town have enjoyed artificially low growth fees – in several cases – yet they now want elected leaders to conduct the equivalent of a going out of business sale when it comes to growth fees.

Bonus bucks are discretionary fees agreed to by the developers for sewer allocation certainty that can be spent as the council wishes. Growth fees are a mandated mitigation that you can’t avoid when building one or 2,000 homes.

 Unlike bonus bucks, growth fees are collected based on the actual cost of amenities that growth will require.

The prime example is the Union Road fire station. The fee – set in 2000 without an automatic inflationary adjustment – calls for 30 cents per square foot which would bring in $600 per 2,000-square-foot home. That is supposed to pay for five fire stations – including the Union Road station – an aerial ladder truck, and three fire engines.

The city is still paying off $170,000 a year on money borrowed to build the Union Road fire station and/or buy the $1 million aerial ladder truck using growth fees collected for fire needs. For the record, the $1.2 million fire station required $400,000 in bonus bucks because the fire fee wasn’t generating enough money. Even so, the city had to borrow money.

The 304 homes built last year generated about $180,000 or just $10,000 more than what is needed to pay off the loan. There is already a need for two other fire stations near Del Webb on North Manteca and Woodward Park in southwest Manteca. Sorry, but $10,000 isn’t exactly bankrolling the costs of such stations let alone fire engines that can run in excess of $400,000 apiece.

So what should the council do?

For starters, if they do suspend the bonus bucks to get housing going and as an act of fairness since newer projects don’t have them, direction to staff should be clear. The growth fees need to be examined and adjusted upwards – with automatic inflation clauses – ASAP. To make sure that very many moons don’t pass, the council should instruct staff to make sure the growth fees get examined and adjusted as required and then put in place within sixth months. If not, no more residential building permits for new housing should be issued at that point until the growth fees are updated.

After all, it’s a question of fairness to Manteca’s current 67,000 residents as well as those buying the new homes.

Make no mistake about it. Growth is good but only if it doesn’t hurt the community.
Discounting growth fees because builders are simply having a hard time won’t be doing anyone – except the developers – any good in the long run.

If Manteca can’t continue being Manteca with its current neighborhood park strategy as well as placing things such as fire departments for five-minute response time, then growing Manteca would be the wrong thing to do.
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